Validity of AGM postal voting under UK Companies Law?

August 23, 2023 4:33 AM

You are Not My Solicitor, but perhaps you are knowledgeable about the current state of Companies Law in the UK and can tell me whether it is considered legally valid for a UK company to support postal voting for its Annual General Meeting?

My UK sheep breed society recently transformed itself into a private company and has just sent out notice of the first AGM to be held since becoming a company. Despite assurances that becoming a company would not change policies and procedures, members have now been told there will no longer be postal voting due to Companies Law and that if they cannot travel to the AGM their only option is to appoint a proxy. Drama is ensuing. Can you tell me more about the legal context for postal voting and for the responsibility of Directors to support AGM voting from a geographically distributed membership?

posted by Rhedyn to Law & Government (3 answers total)

Best answer: The Companies Act 2006 requires directors to attend an AGM in person or send a proxy. This restriction was lifted temporarily during the pandemic, but that has now been withdrawn and yes, your directors are now required to attend in person again (or to send a proxy to vote on their behalf).

Check with a relevant legal professional that this is still correct, obviously. But also check if a private company is the best formation for you, a sheep breed society wouldn't normally be considered a business as presumably you're not buying and selling good or services, collecting VAT, etc. You may want to consider registering as a charity instead, or potentially a CIC (Community Interest Company) depending on what your society does.
posted by underclocked at 5:55 AM on August 23, 2023 [1 favorite]

Response by poster: Thanks underclocked. A follow up question: my reading suggests that the sorts of governance decisions that the membership is used to voting on by post do not have to be voted on at AGM but instead can be handled as written resolutions, for which signed votes can be sent in by post. Is that correct?

I have no confidence that a private company was the best formation, and portions of the membership are now suspicious of the move and the motives of the Directors. As in academia, the politics are vicious because the stakes are so small :P
posted by Rhedyn at 6:06 AM on August 23, 2023

Best answer: That is generally correct.

There are specific rules about the obligations of being a director, but generally they can make whatever (legal) decisions they want outside of certain specified situations (like attending the AGM or providing yearly company accounts to Companies House). That's because normally you have a small amount of directors who literally direct the company, and it's not for the government to proscribe how they run their business - choice, capitalism, succeed or fail on your own merits, and all that.

So "written resolutions" aren't really a thing when you're a director, on a day to day basis you're busy running the company and trying to make a profit. Decisions are just made, usually within each director's scope, e.g. the Finance director will make decisions related to the company's finances, the HR director will deal with personnel issues, etc. If all of your society members are registered directors, that's......weird, from the perspective of a limited company.

You may want to read Your duties, responsibilities and obligations as a director and then definitely go speak to a legal professional who specialises in corporate law.
posted by underclocked at 11:17 PM on August 23, 2023 [1 favorite]