Buying And Living in a Multi-Unit Development Property in Ireland

12. Annual General Meetings

Continued

12.7 How are AGMs run?

To be valid, a meeting must be properly convened by notice as set out above and a quorum must be present.

A quorum is the minimum number of members that need to be present for a meeting to be formally held. No business should take place at an AGM unless a quorum of members is present at the time when the meeting starts.

A quorum is generally fixed at two members in the case of a private company and three in the case of a public company.

The AGM must be presided over by a chairperson, the chairperson is usually one of the directors and minutes must be taken.

Third parties such as the managing agent, company solicitor and auditor may also attend the meeting if invited by the directors.

12.8 How are decisions made at AGMs?

Decisions by the members at AGMs (e.g. approval of the company's financial statements) are made by what is called an ordinary resolution.

This involves a proposal being made (for example "I propose that the members approve the company's financial statements") and members voting on the proposed resolution.

To be passed, ordinary resolutions generally need the support of a simple majority i.e. a majority in excess of 50% of those members voting.

All resolutions must be passed in accordance with company law and the company's articles of association.

Special resolutions are used to conduct any special business at AGMs, such as the alteration of the articles of association.

For special resolutions, a 75% majority is required. The company must forward such special resolutions and certain other significant resolutions to the CRO.

12.8.1 Voting at AGMs

The standard Articles of Association provide that resolutions be decided by a show of hands and a declaration by the chairperson that a resolution has been carried or lost.

However you should be aware that the standard articles allow a poll (vote) to be demanded by:

The chairperson of the meeting;
At least 3 members in person or in proxy 13, or;
Any member or members present in person or by proxy and representing not less than one tenth of the total voting rights of all the members having a right to vote at the meeting.

12.8.2 What voting rights do members have at the AGM?

The voting rights that you will have as a member will be set out in the company's article of association and as outlined earlier, it is essential that you are aware of what your rights in this regard are.

Because of the flexibility management companies have with regard to drafting their operating rules it is important that your solicitor examines the wording in the Memorandum and Articles of Association to ensure that the terms are fair and acceptable to you as an owner/member.

For example, the articles of association might state that owners will have 1 vote each at meetings of the management company, while directors will each have 50 votes.

This may mean that the directors may be able to outvote any proposals made by owner members and can be very problematic as the owners requests may not always be accepted if they are outvoted at the AGM.

12.9 Proxies

If you are unable to attend the AGM, you should be aware that it might be possible to have somebody (e.g. a friend, family member, solicitor) attend the meeting on your behalf to represent your views.

In general, any member entitled to vote at a meeting can appoint a 'proxy'. A proxy is a person nominated by a member to attend the meeting and to speak and vote on their behalf. Typically, under the standard articles of association:

The proxy must be nominated in writing and the nomination must be signed by the member;
The appointment must be furnished to the company at least 48 hours prior to the meeting.
It is important to check the company's Articles of Association to see if there are any specific rules with regard to the use of proxies.

12.10 What are Extraordinary General Meetings (EGMs)?

EGMs are all general meetings of the company other than the AGM.

The Articles will generally outline the process by which an EGM may be held.

If the company is a guarantee company not having a share capital, the notice cannot be shorter than 14 days.

However, meetings may be convened at shorter notice, only if it so agreed by both the company's auditors and by all the members entitled to attend and vote at the meeting.

For example, the articles may state that directors may call an EGM at their own discretion, or that the directors cannot make certain decisions without the approval of members.

Under company law there are a number of circumstances where an EGM must be held regardless of what is outlined in the articles of association. In summary, EGMS must be held under the following circumstances:

Members representing not less than 10% of the voting rights of the company (known as requisitionists), can request that the directors call and hold an EGM by submitting a written request outlining the purpose of the EGM to the company's registered office. The directors are obliged to call an EGM within 21 days of request and the EGM must be held within two months. If the directors fail to call the EGM, the requisitionists, or any of them representing over half the voting rights of the requisitionists may convene a meeting which must be held within three months of the date of the original request;
Where it is not practical to call an EGM or hold it in accordance with the articles of association or the Companies Acts, any member entitled to vote at the meeting may apply to the High Court, and the Court may order that such a meeting be held;
Where the company's net assets (i.e. total assets less total liabilities) have fallen to 50% or less of its called-up share capital the directors must also convene an EGM.

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