Company Law Solutions provides an expert service for all aspects of share capital for private companies, including issuing and transferring shares,share transfer provisions, setting up different classes of shares, converting shares from one class to another, consolidating and sub-dividing shares, companies buying their own shares and reductions of capital. More practical advice is available on the Company Law Solutions website.
Under the law of England and Wales, Scotland and Northern Ireland, the voting rights attached to any particular shares depend on the articles of the company and any terms of issue imposed when the shares were created. The vast majority of shares are ordinary shares which carry a right to one vote per share. There may, however, be different classes of shares which may have no voting rights or restricted rights (e.g. can only vote in certain circumstances) or may have additional voting rights (e.g. 10 votes per share) or enhanced voting rights in particular circumstances.
The voting rights attached to shares are voting rights at general meetings of the company, i.e. at meetings of the shareholders rather than the directors. Voting at general meetings can be done in two different ways. Many resolutions are decided by a show of hands. This will give each shareholder one vote, regardless of the number of shares held. It is a useful practice for the passing of routine resolutions where there is no (or very little) opposition, but does not reflect the actual voting strength of individual shareholders. For this to be done, there must be a poll, by which the actual votes owned by each shareholder voting are counted.
By CA 2006, sec321 any five or more members, or the holders of not less than 10% of the voting rights can demand a poll (except on resolutions to elect a chair or to adjourn). The Model Articles (see below) are slightly more liberal, allowing a poll to be demanded by any two or more members (as does Table A, for older companies). For these purposes, proxies have the same rights as members. Note that the demand for a poll must be made not later than the declaration of the result on a vote by a show of hands.
44. (1) A poll on a resolution may be demanded-
(a) in advance of the general meeting where it is to be put to the vote, or
(b) at a general meeting, either before a show of hands on that resolution or immediately after the result of a show of hands on that resolution is declared.
(2) A poll may be demanded by-
(a) the chairman of the meeting;
(b) the directors;
(c) two or more persons having the right to vote on the resolution; or
(d) a person or persons representing not less than one tenth of the total voting rights of all the shareholders having the right to vote on the resolution.
(3) A demand for a poll may be withdrawn if-
(a) the poll has not yet been taken, and
(b) the chairman of the meeting consents to the withdrawal.
(4) Polls must be taken immediately and in such manner as the chairman of the meeting directs.
46. A resolution put to the vote of meeting shall be decided on a show of hands unless before, or on the declaration of the result of, the show of hands a poll is duly demanded -
47. Unless a poll is duly demanded a declaration by the chairman that a resolution has been carried or carried unanimously, or by a particular majority, or lost, or not carried by a particular majority and an entry to that effect in the minutes of the meeting shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.
48. The demand for a poll may, before the poll is taken, be withdrawn but only with the consent of the chairman and a demand so withdrawn shall not be taken to have invalidated the result of a show of hands declared before the demand was made.
49. A poll shall be taken as the chairman directs and he may appoint scrutineers (who need not be members) and fix a time and place for declaring the result of the poll. The result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.
Company Law Solutions provides an expert service for all aspects of share capital for private companies, including issuing and transferring shares,share transfer provisions, setting up different classes of shares, converting shares from one class to another, consolidating and sub-dividing shares, companies buying their own shares and reductions of capital. More practical advice is available on the Company Law Solutions website.
