(Second of three parts)

Shareholders in a company are entitled to receive proper notice of any general meetings held by that company.

That notice is important because, as I discussed in the first article of this series, company law reserves certain decisions on the running of a company to be taken by its shareholders. Additionally, shareholders in general meetings play an important part in securing accountability of management.

A circular, containing additional information as may be necessary to understand the implications of any proposed transaction that has been placed on the meeting's agenda, may accompany the notice.

The receipt of such information is important if a shareholder is to exercise his/her right to vote on matters affecting the company.

Moreover, the information shareholders receive before the meeting may be crucial in persuading a shareholder to vote in a particular way.

Should a shareholder be unable to attend a general meeting, then he/she may appoint a proxy to vote on his or her behalf. The term "proxy" refers both to the instrument of appointment and to the person appointed by a shareholder to vote for him/her at a meeting.

Company bye-laws frequently stipulate, amongst other things, the form of the proxy document and whether a proxy has to be a member.

Once a company receives proxies their authenticity should be verified.

Specifically, the signatures on the proxies and any supporting authorities should be thoroughly checked to ensure so far as possible that they appear to be the signature of the shareholder named therein.

The proxies should be categorised according to whether they were received before or after the deadline, are in the proper form and are not duplications. Consideration should also be given as to whether a scrutineer will be needed to check proxy votes sent to the company or to its register and transfer agent.

A shareholder may revoke the appointment of a proxy at any time.

The appointment is automatically revoked by the shareholders' death, bankruptcy, insanity, registration of a transfer of the shares, or by the express or implied behaviour of the shareholder (e.g. voting himself before the proxy has done so, or appointing another proxy).

Whether shareholders attend the meeting, or send proxies on their behalf, a quorum must be established, maintained and voting throughout the meeting. The term 'quorum' refers to the minimum number of persons necessary to constitute a valid meeting.

The quorum is usually prescribed by the bye-laws of the particular company by reference to a particular number of persons and/or their shareholding percentage. Generally, members who cannot vote at the meeting do not count towards the quorum.

An attendance sheet is essential in determining whether a quorum is present at the meeting and can proceed to business. The persons who attend the meeting should identify themselves.

Their names, or the names of the persons they represent, must be checked against the register of shareholders.

Moreover, the attendance officer should be given specific instructions regarding whether persons other than those entitled to attend should be admitted (e.g. press, investment analysts etc.)

In addition to the register of shareholders, copies of the following documents and equipment should be available at the general meeting:

¦ attendance sheet

¦ proxies

¦ calculator

¦ chairman's script

¦ poll cards

¦ The Companies Act 1981

¦ bye-laws

¦ memorandum of association

¦ shareholders agreement (if any)

¦ register of directors

¦ copies of notice of meeting and any accompanying circular (together with all documents referred to therein)

¦ copy of accounts (if same are to be laid before the meeting) and any auditor's report

¦ video equipment and sound system (as necessary).

The next article in this series will address the conduct of general meetings.

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.