Great care needs to be taken in calculating the date on which deemed service has occurred when serving notice to the shareholders for a General Meeting (GM) or an Annual General Meeting (AGM). In serving notices, a UK company needs to ensure that it complies with both the Companies Act 2006 (the Act) and any provisions in the company’s articles of association (the Articles). 

In this article, we consider the provisions under the Act only.

What does clear days’ notice mean?

Under section 360 of the Act, any references to days within the sections which set the minimum notice periods for general meetings are to “clear” days.  What this means is that when calculating the specified notice period, the day of the GM (or AGM) and the day that the notice is given are excluded. Furthermore, when determining the date on which notice is given, we need to bear in mind the statutory deemed delivery provision (see below). For private companies (this does not include traded companies), unless the Articles require a longer period, the minimum notice period for a GM (including an AGM), other than an adjourned meeting, is 14 clear days (section 307(1) and (3) of the Act).

For public companies, unless the Articles require a longer period, the minimum notice periods are:

• for an AGM, other than an adjourned meeting, 21 clear days (section 307(2) of the Act); and
• for a GM, other than an AGM or an adjourned meeting, 14 clear days (section 307(2)(b) of the Act).

Deemed Delivery

Under section 1147 of the Act, the rules on the deemed delivery of documents and information sent by a company to its shareholders are as follows:

• by post: on the basis that it has been properly addressed, prepaid and posted to an address in the United Kingdom, deemed delivery is 48 hours after it was posted (s1147(2) of the Act);
• by electronic means: on the basis that it has been properly addressed, deemed delivery is 48 hours after it was sent (s1147(3) of the Act); and
• website: deemed delivery is when the material was first made available on the website or, if later, actual or deemed receipt of notice (sent by post or electronic means) of the fact that the material is on the website (s1147(4) of the Act).

Section 1147(5) of the Act clarifies that we should not take in account any part of a day that is not a working day. Accordingly, if, for example, a notice was posted on a Friday, deemed delivery would be the following Tuesday.

Of course, all of the above is on the basis that the Articles do not have any contrary provisions (section 1147 (6) of the Act).

An example

Private company or GM of a public company

AGM of a Public company

 What happens if notice is not validly given?

If a company does not send a notice to every person entitled to receive notice, the proceedings at the meeting may be invalid.

Notwithstanding the above, under section 313(1) of the Act, the accidental failure to give notice of either a general meeting or a resolution to be moved at a general meeting to one or more persons does not automatically render the meeting or the resolution invalid.

Section 313(1) of the Act, may, however, be overridden by the Articles except in relation to:

• notice of meeting required by shareholders under section 304 of the Act (i.e. when the directors are under a duty to call a meeting, which has been requested by the shareholders);
• notice of meeting called by shareholders under section 305 of the Act (i.e. when the shareholders can call a meeting because the directors have failed to do so under section 304); and
• notice of resolutions at AGMs proposed by shareholders under section 339 of the Act

Conclusion

Although these rules seem straight-forward, on many occasions companies have fallen foul of them, which, therefore, rendered the proceedings during a GM or AGM invalid.

For more information, please contact Dafni Loizou.