Company law revision question and answer

Advise the directors of Tangaza Company on the following issues:

(a) The provisions of the Companies Act that relate to the calling of the annual general meeting and duties of the chairman during such a meeting.

(b) When a company is compelled to call an extra ordinary general meeting.

(c) The procedure to be followed to remove a director from office.
ANSWER
• Under section 131 (1) of the Companies Act every company much in each year hold a general meeting as its annual general meeting.
• The notice convening the meeting must so specify.
• The first annual general meeting must be held within 18 months of incorporation and thereafter 15 months must not elapse from the date of one annual general meeting to that of the next.
• If the first annual general meeting is held, no other meeting need be held the company within two years of incorporation.
• If a company fails to hold an annual general meeting as required, any member may petition the registrar to call or direct the convention of an annual general meeting. A meeting so convened is duly constituted one member present in person or proxy.
• Such a meeting is deemed to be the annual general meeting of the previous year unless the meeting otherwise resolves. Such a resolution is registrable within 14 days.
• It is ordinarily summoned a 21 day notice.
• The annual general meeting considers ordinary business e.g. declaration of dividend, election of directors appointment of auditors etc.
• Failure to hold the annual general meeting renders the company and every officer in default liable to a fine not exceeding Kshs. 2,000.
• Call the meeting to order.
• Satisfy himself that the meeting is duly constituted.
• Satisfy himself that a quorum of members is present.
• Inform himself the business of the meeting.
• Conduct voting.
• Frame motions for discussion.
• Make decisions on points of order.
• Determine who to speak and for how long.
• Maintain order in the conduct of those present.
• Close discussion on any issue after reasonable debate.
• Ensure that the sense of the meeting is maintained.

(b)
• Under the provisions of section 132 (1) of the Companies Act, a company may be compelled to call an extra-ordinary general meeting at the instigation of its members.

• Holders of not less than 1 th of the paid up capital of the company or total voting
10
rights of all members may request for a meeting depositing a requisition with the company at its registered office.
• The requisition must state the purpose of the meeting and must be signed all the requisitionists.
• If it consists of a number of documents, each must be signed at least one of the requisitionist.
• Directors must convene an extra ordinary general meeting of the company within 21 days of deposit of the requisition failing which the requisitionists or not less than one half of them may convene the meeting.
• A meeting convened requisitionist under this section must:

Be held within three months of deposit of the requisition.

Be summoned in a manner similar to a meeting convened the board.

(c)

• Under section 185 (1) of the Companies Act a company may ordinary resolution remove a director from office.
• A special notice of the intended resolution must be given to the company.
• Upon receipt of the company must send a copy thereof to the director concerned.
• The director is entitled to make representations not exceeding reasonable length as his defence any may request the company to notify its members that he has made them.
• The company must convene an extra ordinary general meeting and copies of the notice of the intended resolution must be sent to all members.
• Members must be notified that the director has made representations, if any, and copies must be enclosed unless received too late the company.
• If the directors representations are received too late the company or are not enclosed due to default the company the director is entitled to have them read out at the meeting.
• However copies of the directors representations need not be sent to members or be read out at the meeting if on application the company or other aggrieved party, the court is satisfied that the director is abusing his right to be heard to secure needless publicity for defamatory matter.
• The removal of a director from office take effect when the meeting ordinary resolution so resolves.
• This section does not apply to directors of private companies appointed before 1/1/1962.

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