In relation to point no 3, the normal procedures for decision making in a company is as below:

Level 1 – board resolution passed during the Board of directors meeting. In situations such as the appointment,
removal etc of a company secretary, board resolutions will be sufficient. This means that the Board will be the
final decision maker.
Level 2 – members in an annual general meeting (public company), EGM (applicable to public and private
companies), meeting of members (private company via circular resolution) will pass either ordinary resolutions or
special resolutions (depending on the agenda/business to be discussed and voted). Situations such as allotment
of shares, change of name, change of objects clause, substantial property transactions etc.
Level 3 - In situations where conflicts arise, the COURT will make the final decisions.
Main levels of decision making in any business entity especially companies.
A) 1st level of decision making is at the Board of directors’ level. Being the committee or top management of a
company, the Board is entrusted to manage and steer the company to the right direction. The Board
manages the day to day operations of the company, there the Board will make many decisions for the
company. The Board must be aware that in many situations they are not the final decision maker that is
they are many situations that are beyond their power.
B) However, the Members (Owners) of the company will in many situations be responsible for
the final/ultimate approval of decisions/proposals made or recommended by the Board.
C) There can possibly be certain specific situations that even the Board and the Members do not possess the
final approval. In specific conflicting situations, the COURT might make the final approval.
Requisites of a valid meeting
A) properly convened – notice, agenda, convening authority
B) properly constituted – quorum, proxies
C) properly conducted – Chairman of meeting, adjournment, voting
D) properly confirmed – minutes of meeting

Types of resolution
a. ordinary resolution
b special resolution.

Requisites of a valid meeting – Properly conducted

Methods of Voting:

a. By hand – Irrespective of the amount of shares held by members, a member/proxy will only raise one
hand. Voting by hand is a common practice in meetings conducted.
b. By poll – The voting power of a member is determined by the number of shares held. No of votes is in
accordance with the no of shares held by members. Voting by poll will only be carried out when there is
demand for a poll requested before a meeting or during a meeting.
c. Make sure you know the differences between the two types of voting above

Requisites of a valid meeting – Properly constituted

Quorum – minimum no of members who must be present at a meeting.
Proxy – please ensure you know the difference between proxy and corporate representative.
Qualification of a proxy, no max to number of proxies, method of appointment, powers of proxy.
Requisites of a valid meeting – Properly convened.
Notice – letter of invitation to the members of the company to attend AGM, EGMs
Take note of the following:
a) To whom should the notice be circulated? Para 14.58 until 14.74 (Dr Chan’s handout)
- members
- directors
- auditor
b) How must the notice be sent? Para 14.75 until 14.81
c) How many days are required for the notice to be sent out? Para 14.82 until 14.93
d) What are the contents in the notice of meeting? Para 14.94 until 14.96

Agenda/business to be transacted during the meeting? The proposed resolution must be clear and contain
sufficient information for the directors to decide whether to vote for or against the agenda. Students must know
what are the ordinary and special business to be transacted during a meeting. This will be discussed at length in
the discussion on AGM and EGM.

Convening authority- meaning who has the authority to call for a meeting:
a) Board of directors
b) any director
c) not less than 5% of members
d) 2 or more members
e) the COURT