Answer to Question #262750 in Macroeconomics for Robert

Question

Outline the qualified minority rights of a member which can only be enforced by the joint efforts of a membership group as defined under the Companies Act.                                                                                            (10 marks)

Answer 1

1. Under section 8(1) of the Companies Act, a company may under special resolution alter the objects clause of the memorandum. However, the proposed alteration may be objected to either: Holders of not less than 15% in nominal value of the company's issued share capital, Holders of not less than 15% of any class of shares of the company, Holders of not less than 15% of the company's debenture entitling them to object, Not less than 15% of the company's members.
2. Under section 74(1) of the company's act, proposed variation of class rights may be objected to holders of not less than 15% of that class of shares who did not consent or vote in favour, an application to court within 30 days of the resolution or consent.
3. Under section 140(1) of the Companies Act, holders of not less than $\frac{1}{20}$ of the total voting rights of all members or not less than 100 members of the company may requisition notices of any resolution which may properly be moved at the next general meeting. They are also entitled to requisition the company to circulate to members any statement of not more than 100 words with respect to the matter referred to any proposed solution or business to be dealt with in a meeting.
4. Under section 132(1) of the Companies Act, holders of not less than $\frac{1}{10}$ of the paid up capital of the company or the total voting rights of all members may requisition an extra ordinary general meeting depositing a requisition with the company at its registered office and if the directors do not within 21 days thereof convene a meeting, the requisitionists or not less than 1/2 of them may convene a meeting.
5. Under section 137(1) of the Companies Act, a poll can only be effectively demanded by: Not less than 5 members present in person or proxy, A member or members representing not less than 1/10 of the total voting rights of all members having the right to vote, A member or members representing not less than 1/10 of the paid up capital.