I’ve been writing a lot about shareholder rights lately, with good reason - shareholder rights aren't that obvious.
Now, if a shareholder only has visibility of their rights in a shareholder agreement, it's easy for that shareholder to believe they only have those rights only.
Shareholders have rights under the Corporations Act 2001. And, one of those rights is to put resolutions at meetings of shareholders: section 252L Corporations Act 2001.
For simplicity and because it’s what most people are familiar with - I am going to use the term ‘shareholder’, instead of ‘member’ which is in the legislation.
So which shareholders have rights?
Shareholders with 5% or more of the votes that may be used to cast the resolution may put a resolution at a meeting.
And what should the notice look like? we'll look at that next.
The resolution notice must be in writing and set out the wording of the proposed resolution.
The company won’t need to give notice of the resolution if:
The company pays for the notice to be sent out.
However, the shareholders requesting the meeting are jointly and individually liable for the expenses of the entity in giving the shareholders notice if it's not sent to the company on time to be sent out with the notice of meeting.
Now, the cost of mail outs is likely to matter more with a larger organisation with more members, but it’s good to know.
The same rules above apply for the distribution of a shareholder statement.
Finally, it's important to learn about your rights and reach out for advice if you are unsure.