company law assignment
UNITED INTERNATIONAL COLLEGE
COMPANY LAW
2014 WEEKLY ASSIGNMENT 5
ANSWER
Introduction
The instant case concerns meetings and resolutions. The central issues are:
1. Was the board meeting of December 31, 2013 validly held?
2. Was the resolution passed at that meeting a valid one?
3. What should Bud do to convene an extraordinary general meeting?
Board Meeting of December 31, 2013
At the outset, it must be emphasized that the validity of a meeting hinges on a number of factors:
1. whether sufficient notice was given;
2. whether the relevant notice was properly served;
3. whether the contents of the notice satisfied the requirements of Cap.622 and the articles of the company.
Subject to the exceptions provided in Cap.622, non-compliance with the above rules may render the meeting, if held, invalid. Length of Notice
On the facts given, the notice of this meeting was purportedly served by Clarence on Bud on December 26, 2013 by cell phone text message. Two questions arose from this purported service. First, there are strict rules in Cap. 622 governing the convening of board meetings and the requisite notice thereof. S.571(2) stipulates that the requisite length of a meeting other than AGM is 14 days. Seen in this light, the notice of the Board meeting of December 31, 2013 prima facie failed to comply with the statutory requirement and was therefore invalid.
Having said that, two points need to be raised. S.579(1) of Cap.622 does provide that accidental omission of service of notice shall not render a meeting invalid. That issue does not arise here because Clarence did serve a notice on Bud.
Secondly, it must be emphasized that at common law it is well established that short notice does not itself necessarily render the relevant meeting invalid. It was held in Browne v. La Trinidad that a notice served just 4 minutes before a meeting was not invalid. The court explained that if the person aggrieved by the short notice neither complained
COMPANY LAW
2014 WEEKLY ASSIGNMENT 5
ANSWER
Introduction
The instant case concerns meetings and resolutions. The central issues are:
1. Was the board meeting of December 31, 2013 validly held?
2. Was the resolution passed at that meeting a valid one?
3. What should Bud do to convene an extraordinary general meeting?
Board Meeting of December 31, 2013
At the outset, it must be emphasized that the validity of a meeting hinges on a number of factors:
1. whether sufficient notice was given;
2. whether the relevant notice was properly served;
3. whether the contents of the notice satisfied the requirements of Cap.622 and the articles of the company.
Subject to the exceptions provided in Cap.622, non-compliance with the above rules may render the meeting, if held, invalid. Length of Notice
On the facts given, the notice of this meeting was purportedly served by Clarence on Bud on December 26, 2013 by cell phone text message. Two questions arose from this purported service. First, there are strict rules in Cap. 622 governing the convening of board meetings and the requisite notice thereof. S.571(2) stipulates that the requisite length of a meeting other than AGM is 14 days. Seen in this light, the notice of the Board meeting of December 31, 2013 prima facie failed to comply with the statutory requirement and was therefore invalid.
Having said that, two points need to be raised. S.579(1) of Cap.622 does provide that accidental omission of service of notice shall not render a meeting invalid. That issue does not arise here because Clarence did serve a notice on Bud.
Secondly, it must be emphasized that at common law it is well established that short notice does not itself necessarily render the relevant meeting invalid. It was held in Browne v. La Trinidad that a notice served just 4 minutes before a meeting was not invalid. The court explained that if the person aggrieved by the short notice neither complained