Statutory powers The Companies Act 2006 (the “2006 Act”) sets out the legal framework within which shareholders can exercise their legal rights in pursuit of an activist agenda. Shareholders in public companies have various rights which they can exercise to achieve their objectives. As set out below – some are applicable to all public companies, others just to listed companies. In addition, some of these powers can be exercised by the beneficial owners of the shares in certain circumstances. References to sections are to sections of the 2006 Act. Requisitioning a general meeting This provides members with the means to generate the platform needed to propose their desired resolution. Following the implementation of the Shareholder Rights Directive in August 2009, members with fully paid up shareholdings representing at least 5% of a public company’s total voting rights are entitled to require the directors to call a general meeting of the company. The request must detail the nature of the business to be dealt with at the meeting and may specify wording for a proposed resolution to be tabled at the meeting. Under the 2006 Act, all UK public companies can convene general meetings (other than AGMs) on 14 clear days’ notice (subject to longer provisions in their articles). The Shareholder Rights Directive, however, increased this to 21 clear days for companies listed on the Official List, but the UK adopted an option for these companies to continue to take advantage of the original 14 clear days requirement, provided that: (a) shareholders pass a special resolution every year at the AGM, approving the shortening of the general meeting notice period to 14 clear days, and (b) the company offers “the facility for shareholders to vote by electronic means accessible to all shareholders”. A proposed resolution (whether at a requisitioned meeting or proposed for an AGM) will not be permitted if it: - would be ineffective as a result of it being inconsistent with the company’s articles of association, - is defamatory, or - is vexatious or frivolous. An example timeline for requisitioning a general meeting is set out on page 12 of the guide. Requisitioning the circulation of a statement Members with shareholdings representing at least 5% of the total voting rights, or shareholders who are at least 100 in number and whose shares are paid up by an amount averaging at least £100 per member, are entitled to require the company to circulate to shareholders a statement (of up to 1,000 words) regarding a proposed resolution, or other business, to be dealt with at that meeting. The company must receive the statement at least one week before the meeting. If the relevant meeting is an AGM and the request is received prior to the end of the financial year preceding the AGM,the company is required to bear the costs of circulating the statement - if not, the members requiring the statement to be circulate
Datafeed and UK data supplied by NBTrader and Digital Look.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.