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Tutorial 9 1

This document summarizes key issues from a law tutorial regarding the law of meetings. 1. It discusses a case regarding Nice Bhd, which held its AGM in Johor Bahru rather than Kuala Lumpur as registered. It also appointed a director over age 70 without proper notice. The validity of the AGM and director appointment could be challenged on these grounds. 2. It also discusses three resolutions passed by ABC Bhd: adding a new business object, allowing director-initiated share purchases from competing members, and changing the company name. It advises whether members could challenge these resolutions based on legal precedent and statutes. 3. Key issues addressed include requirements for AGM location and

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Gurrajvin Singh
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240 views

Tutorial 9 1

This document summarizes key issues from a law tutorial regarding the law of meetings. 1. It discusses a case regarding Nice Bhd, which held its AGM in Johor Bahru rather than Kuala Lumpur as registered. It also appointed a director over age 70 without proper notice. The validity of the AGM and director appointment could be challenged on these grounds. 2. It also discusses three resolutions passed by ABC Bhd: adding a new business object, allowing director-initiated share purchases from competing members, and changing the company name. It advises whether members could challenge these resolutions based on legal precedent and statutes. 3. Key issues addressed include requirements for AGM location and

Uploaded by

Gurrajvin Singh
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Tutorial 9: Law of Meetings

Exam concerns on rules and resolutions.


Question 1 is concern on the venue and notice. Exam question will be more complicated. But
1. Nice Bhd, whose registered ofce is in Kuala Lumpur, held its latest annual general meeting
(AGM) on 15 October 2009. The meeting was held at the Discount Hotel in Johore Bahru.
The notice calling for the meeting was sent out by the company on 1 October 2009. At the
meeting a resolution was passed to appoint Abu, who is 73 years old, as a director of the
company. This resolution was passed by an 80% majority.
Advise Ahmad, a member of Nice Bhd, who seeks your advice on the following:
1. Whether the validity of the AGM can be challenged on the ground that it was not
held in Kuala Lumpur;
2. Whether the validity of the AGM can be challenged on the ground that the duration
of notice given to members was insuf cient; and
3. Whether the resolution to appoint Abu as a director could be challenged on any
ground, presuming that the AGM had been validly convened.
Must talk about both laws.
A) S. 145A CA 2007
Venue : state where office is registered (old provision for before 2007)
Venue: anywhere in Malaysia (new provision after 2007). Can use new technology (vid.
Conferencing)
THE VALIDITY OF THE AGM CAN NOT BE CHALLENGED.
B) 145 (2) 65 - 14 days notice
145 (2A) CA 2007 21 days notice
Ahmad can challenge because the notice given is 14 days only.
C) S. 129 Directors above 70 years of age cannot be appointed.
Section 129 (6) if BOD wants to appoint director above 70 must have a resolution, with
21 days notice. Must get abover 75% majority vote.
Not valid because the resolution was short of 21 days notice. It got more than 75 percent of the
vote, but still not valid cause procedure was not perfect.

2. A general meeting of ABC Bhd, whose sole object was the manufacture of plywood, was held
last week. Three special resolutions were passed at the meeting.
(a) The first resolution was to alter the objects clause in the memorandum of ABC Bhd to
add an additional object, namely, the manufacture of steel cabinets. David and his wife,
Sally, are members of ABC Bhd and together they hold 9% of the companys issued share
capital. They are extremely unhappy about the resolution and seek your advice as to
whether they may apply to the court to cancel the alteration.
Required:
Section 28 (1) CA 65 object clause of the MA can only be ammended only by a special
resolution. By virtue of 28(5), members who hold not less than 10% of issued share capital
may apply to court to cancel the alterations and it must be confirmed by the court. David
and Sally has only 9% so they cannot apply for it.
Advise David and Sally.
(b) The second resolution was to alter the companys articles to empower the directors to
compulsorily purchase the shares of any member who runs a business which is in
competition with the business of the company. Matthew, a member of ABC Bhd, runs a
business which competes with the business of the company. He seeks your advice on the
validity of the said resolution.
Required:
Advise Matthew.
For alteration of articles, it must be bona fide to the company and its members. In normal
circumstances an article to give directors power to compulsary acquire shares of a member
will not be permitted by the court. Found in the case of Brown v British Abvasive Co. (1919).
Such a resolution is considered unlawful. Sidebottom v Kershaw, Leese Co., (1920) says that
such alteration is done for the interest of the company, it was held to be valid. In this case,
using the latest authority, advise matthew that his challenge for the alteration may not be
valid if the alteration benefitted the company. However, if evidence show that the company
cannot benefit and its merely used to oppress shareholders then by virtue of the authority
of Brown, matthews challenge would be valid.
(c) The third resolution was to alter the name of the company from ABC Bhd to ZZZ Bhd.
Madeline, a member of ABC Bhd, has informed the company that she intends to take legal
action to challenge the validity of the resolution.
She has pointed out that the memorandum of the company contains a clause that the name
of the company is unalterable.
Required:
Advise Madeline whether she is likely to be successful if she challenges the validity of the
resolution.

Section 18 CA65 say the name of the company should be stated in MA. Section 23 CA65
says that you can alter the name of the company by way of a special resoulution. More than
75% majority.
Can a clause in MA overide Section 23. Since section 23 is a statute and cannot be overided,
clause in MA becomes invalid. The challenge may not be successful. Clause in MA cannot
challenge provision in the statute. It gives statutory power to the members to change the
name.
Areas that are important.
Date, venue, age of directors, and resolutins of directions. Change to the MA change to the
AA.

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