- 20 Marks
BCL – L1 – Q89 – Company meetings and resolutions
Question
Kofi Amoah, the CEO of your company, is preparing for a top management meeting scheduled for 1st December 2021. One of the issues to be discussed is the effect of COVID-19 on holding shareholders’ meetings. There are views that the Annual General Meeting (AGM) must be in-person so that members can vote on resolutions to be passed. Others believe that the AGM should be virtual or hybrid.
Some shareholders believe that the items on the agenda are too many and that they would need two days to have a meaningful discussion. Kwame Boateng, a shareholder has decided not to attend the AGM if it is organized virtually.
Required:
As a business law student, your boss has requested you to present to him the following:
(a) The requirement of the Companies Act, 2019 (Act 992) on the interval between which AGM are to be held.
(b) THREE (3) things that should be covered in the notice for an AGM.
(c) TWO (2) consequences of not holding an annual general meeting in accordance with the Companies Act.
(d) Discuss whether decisions taken at the AGM will be binding on Kwame Boateng.
(e) What is meant by the doctrine of “Privity of contract” and identify TWO (2) exceptions allowed under the Contract Act, 1960 (Act 25) in Ghana?
Answer
(a) The First Annual General Meeting should be within 18 months of incorporation. Not more than 15 months shall elapse between the date of one annual general meeting and the next.
(b) A valid notice of meeting for an annual general meeting requires that the notice:
It must be in writing.
Must be given to every person entitled to receive it.
Must be adequate and properly given in accordance with the Company Constitution or the Act.
Must be clear and explicit, and where a member is entitled to appoint a proxy to attend and vote in his/her stead, the notice must contain with reasonable prominence a statement to this effect and that the proxy need not be a member of the company.
Must specify the place, date, hour of the meeting, and the general nature of the business to be transacted at the meeting.
Where the meeting is to consider a special resolution, the notice must set out the terms of the resolution.
(c) The Registrar, per Section 157, when the AGM has not been held in the normal course and the Registrar, on his/her own motion, or application of any member or officer of the company, may call or direct the calling of an AGM and give ancillary or consequential directions as he deems fit. The court, under Section 162, may order that a general meeting be called, held, or conducted and may give such ancillary or consequential directions as it thinks fit.
(d) Decisions taken at the meeting will be binding on Kwame Boateng as there is a quorum of members.
(e) A person who is not a party to a contract is not entitled to enforce or rely on a provision in the contract. If a third party gets a benefit under a contract, it does not have the right to go against the parties to the contract beyond its entitlement to a benefit. Section 5 of Contract Act 25 allows that a person who is not a party to the contract, whether as a designated person or as a member of a class of persons, may, (subject to rules in Section 5, 6 & 7 of the Act), be enforced or relied on by that person as though that person was a party to the contract.
- Uploader: Samuel Duah