UNIT 10

MEETINGS AND PROCEEDINGS OF COMPANIES

In corporate law, company meetings are essential forums where members (shareholders) and directors discuss and make decisions on key issues affecting the company. The law governing meetings and proceedings of companies in Nigeria is primarily found in the companies and allied matters act, 2020. The types of meetings includes the following:

1. Statutory meeting: A statutory meeting is only held by public companies. See section 235 of CAMA 2020 which provides that a statutory meeting must be held within six months from the date of incorporation and the purpose is to discuss matters related to the formation of the company, such as shares allotted and the status of the company’s assets and liabilities. The company must also issue a "statutory report" to every member at least 21 days before the meeting. See also the case of Re Companhia de Mozambique (1894) AC 437 where the court held that the failure to hold a statutory meeting and present a statutory report led to a lawsuit where the court emphasized the mandatory nature of statutory meetings in public companies.
2. Annual general meeting (AGM): An AGM is a meeting required to be held by all companies, that is, public and private to present the financial statements, declare dividends, elect directors, and appoint auditors. See section 237 of CAMA 2020 which provides that every company must hold an AGM within 18 months of incorporation and subsequently, once every calendar year, with no more than 15 months between AGMs and the case of Adenuga V. Odumeru (2003) 8 NWLR (PT 821) 163 where the court upheld that failing to hold an AGM within the prescribed time violated the rights of shareholders to be informed and involved in the company's affairs.
3. Extraordinary general meeting (EGM): An EGM is called to discuss urgent matters that cannot wait until the next AGM. See section 239 of CAMA 2020 which states that an EGM can be convened at any time by the directors, or upon a requisition by members holding at least 10% of the paid-up share capital. If the directors fail to call the meeting after receiving such a requisition, the members can call the meeting themselves. See also the case of Union bank of Nigeria Plc V. Edet (1993) 4 NWLR (PT 287) 288 where the court ruled that shareholders could validly convene an EGM when the directors refused to do so, and any resolutions passed during that meeting were held to be binding.

NOTICE OF MEETINGS

Proper notice must be given to every member entitled to attend a company meeting. See section 242 of CAMA 2020 which mandates at least 21 days' notice for an AGM, unless a shorter notice is agreed upon by all members entitled to attend and vote. For EGMs, the same notice period applies unless the meeting is called on short notice, which requires the consent of 95% of the members entitled to attend. Failure to give proper notice can render the meeting invalid. The notice must specify the date, time, and venue of the meeting, as well as the nature of the business to be transacted. See also the case of Iweka V. S.C.O.A (NIG) LTD (2000) 7 NWLR (PT 664) 326 where the court held that failure to provide adequate notice as stipulated under the law could invalidate the resolutions passed at the meeting.

QUORUM FOR MEETINGS

A quorum refers to the minimum number of members or directors required to be present to conduct a valid meeting. See section 240 of CAMA 2020 which provides that, unless the articles of association state otherwise, the quorum for a general meeting is two members for a private company and three members for a public company. See the case of Ufomba V. Ufomba (2011) 15 NWLR (PT 1271) 409 where the court held that a meeting held without the required quorum was invalid and any decisions made in such a meeting had no legal effect.

VOTING AT MEETINGS

Decisions at company meetings are typically made by voting. See section 245 of CAMA 2020 which provides that each member is entitled to one vote per share unless the articles provide otherwise. Voting can be done through a show of hands or by poll. On a show of hands, each member has one vote, while in a poll, each member has votes in proportion to the shares held. See the case of Re Durosoye V. Akinlade (1967) NMLR 34 where the court highlighted that a show of hands can be overruled by a demand for a poll if it is stipulated in the articles or requested by members holding a sufficient percentage of shares.

MINUTES OF MEETINGS

Every company is required to keep accurate minutes of all meetings. See section 246 of CAMA 2020 which mandates that minutes of general and board meetings be recorded in the company’s minute book. These minutes serve as legal proof of what transpired during the meeting. If the minutes are signed by the chairman, they are presumed to be accurate and the case of Yalaju-Amaye V. Associated Registered Engineering Contractors Ltd (1990) 4 NWLR (PT 145) 422 where the court emphasized the legal presumption of accuracy in properly signed minutes, stating that they cannot be challenged unless there is proof of fraud or inaccuracy.

RESOLUTIONS

Resolutions are decisions made at company meetings. There are two types of resolutions which are the ordinary and special resolutions.

1. Ordinary resolution: An ordinary resolution requires a simple majority, that is, more than 50% of votes cast by members. Ordinary resolutions are used for most decisions, such as approving dividends and appointing directors.
2. Special resolution: A special resolution requires at least 75% of votes cast by members. Special resolutions are necessary for significant decisions like amending the company’s articles or winding up the company. See section 238 of CAMA 2020 which provides that special resolutions must be filed with the corporate affairs commission (CAC) within 15 days and the case of Chinwo V. Owuhonda (2008) 3 NWLR (PT 1074) 341 where the court reiterated that decisions requiring a special resolution must strictly comply with the 75% voting requirement, or the resolution would be invalid.

PROXY VOTING

Members who are unable to attend meetings in person are allowed to appoint a proxy to attend and vote on their behalf. See section 245(6) of CAMA 2020 which provides that the proxy has the same rights as the member in terms of voting, speaking, and being counted in the quorum and the case of Okike V. LPDC (2005) 15 NWLR (PT 949) 471 where the court upheld the right of shareholders to vote by proxy, emphasizing that companies cannot unlawfully restrict the use of proxies in meetings.

CONCLUSION

These are the fundamental aspects of meetings and proceedings under Nigerian corporate law. Observing the statutory requirements for notice, quorum, voting, and resolutions is critical to ensuring the validity of the decisions made in a company’s meetings.