(Last of three parts)

In my previous two columns, I discussed the importance of ensuring that a general meeting is properly convened and constituted. Today, I will focus on the conduct of the meeting.

A general meeting is under the control of the chairman who must concentrate his attention on the punctilious conduct of the meeting. A company's bye-laws usually make provision for the appointment of a chairman of the meeting. Generally, the chairman of the board of directors will act as chairman of the general meeting. If that person is absent, another director nominated by the directors will normally assume the position. Failing that, the shareholders present and entitled to vote, may appoint one of their number to be chairman.

The chairman has a duty to keep order and to ensure, subject to compliance with the Companies Act 1981 ("the Act") and the bye-laws, that the meeting is impartially conducted and that the results reflect the wishes of an appropriate majority of shareholders who are entitled to attend and vote.

More specifically, the chairman's duties include:

¦ verifying that the meeting is duly convened and quorate;

¦ verifying that all shareholders present in person or by proxy are so entitled;

¦ exercising his discretion in respect of the admission of persons not entitled to attend (e.g. press, investment analysts);

¦ affording reasonable opportunity for discussion on the resolutions proposed (so long as the shareholders' discussions are not clearly frivolous, vexatious or abusive);

¦ ruling on the admissibility of any proposed amendments to the resolutions;

¦ putting resolutions and amendments (if any) to vote;

¦ lruling on the validity of a demand for a poll;

¦ exercising discretion in respect of adjournments;

¦ exercising discretion in regard to a casting vote (if any);

¦ declaring the results of a vote; and

¦ ensuring the proceedings are fairly recorded in the minute book. Whilst the chairman should follow the agenda scrupulously, the chairman may also have an expanded script. This script will afford the chairman more detailed information on the items of business and could suggest responses to any concerns (especially difficult or controversial ones) that are anticipated.

In respect of the agenda items put to vote, the normal practice is for a vote to be taken first on a show of hands and then, if a valid demand is made, for a poll to be held.

On a show of hands a shareholder present will have one vote irrespective of the number of shares held; on a poll, shareholders can cast all the votes attached to all the shares they own. Generally, the number of votes carried by a share on a poll depends on the bye-laws or the terms on which the shares were issued but, if no other provision is made, a share is presumed to carry one vote.

The bye-laws will usually empower the chairman to direct how and when a poll is to be conducted. The Act provides that on any question proposed for the consideration of the shareholders a poll must be held if demanded by any of the following:

¦ the chairman;

¦ at least three shareholders present in person or represented by proxy;

¦ shareholders present in person or represented by proxy and holding between them not less than one-tenth of the total voting rights of all the shareholders having the right to vote at such meeting; or

¦ shareholders present in person or represented by proxy holding shares conferring the right to vote at such meeting, being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all such shares conferring such right.

If the circumstances require (e.g. the venue is too small, there is riotous behaviour among shareholders, or a quorum is not present), the chairman may adjourn the meeting. In exercising this common law power a chairman must act in good faith and with a view to facilitating the opportunity for shareholders to attend, debate and vote. The chairman should consider, among other things:

¦ the impact of the adjournment on the shareholders;

¦ the expense occasioned by the adjournment; and

¦ the likelihood that a vote at an adjourned meeting would produce a different result.

An adjourned meeting is a continuation of the original meeting. Accordingly, no business outside the scope of the original meeting may be considered and (except as required by the bye-laws of a company) no notice of an adjourned meeting need be given.

Minutes of all proceedings at general meetings must be entered in books kept for the purpose and shareholders have statutory rights to inspect and to request copies of them. Other statutory books must also be updated if appropriate (e.g. register of shareholders, register of directors). Moreover, it may be necessary at the conclusion of the meeting to make certain filings with the Bermuda regulators.

It is vital that general meetings are properly convened, constituted and conducted. The administrative arrangements for a meeting should be carefully planned. Normally, the company secretary expedites them, but the company's legal advisers and auditors should be consulted as necessary.

Partner Tammy Richardson is a member of the Banking and Asset Finance Team within the Corporate and Commercial Practice Group of Appleby. A copy of this column is available at www.applebyglobal.com. This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.