GIBRALTAR Law and Practice Contributed by: Adrian Pilcher, Stuart Dalmedo and Louise Anne Turnock, ISOLAS LLP
4.2 Role of Shareholders Ordinarily, it is the board of directors that makes the day-to-day decisions affecting the company, and the articles of association normally govern how the direc - tors exercise the powers of the company. The board of directors will involve the shareholders and call them to a meeting only when the need arises under the Com - panies Act – for example, because it is required to change the articles of association or to change the company’s name. Shareholders cannot simply overturn board decisions if they do not like the way in which the board is running the company. Instead, the shareholders have the right to appoint and remove directors from office in the arti - cles of association. Therefore, the shareholders could remove the directors from office and replace them. In doing so, the shareholders should consider any potential employment or company law repercussions. 4.3 Shareholder Meetings There are two types of meetings of shareholders of a company, namely:
tor, but rather allows it to make a single appointment, without the requirement to review the appointment on a yearly basis. Subject to the provisions of a company’s articles of association, the Companies Act establishes the provi - sions that have effect as to meetings and votes. These include that: • a meeting of a company, other than a meeting for the passing of a special resolution, may be called by seven days’ notice in writing; • notice of the meeting of a company should be served on every member of the company in the manner in which notices are required to be served by the articles; • two or more members holding not less than one tenth of the issued share capital or, if the company does not have a share capital, not less than 5% in numbers of the members of the company, may call a meeting; • in the case of a private company, one member, and in the case of any other company, three members, personally present, shall be a quorum; • any member elected by the members present at a meeting may be chairman; and • in the case of a company originally having a share capital, every member shall have one vote in respect of each share or each GBP10 held by them, and in any other case every member shall have one vote. Notice of a general meeting of a company must be given either in hardcopy form, in electronic form or by means of a website, or partly by one such means and partly by another. 4.4 Shareholder Claims Directors’ duties are owed to the company and not to the shareholders or any other stakeholder. There - fore, the general rule is that the company itself (act - ing through the board of directors) must take action against a director for breach of these duties, as any wrong is committed against the company itself. However, in limited circumstances, the Companies Act allows shareholders to bring a derivative action on behalf of the company to enforce the company’s
• annual general meetings; and • extraordinary general meetings.
On an annual basis, every company should hold a general meeting known as the company’s annual gen - eral meeting, in addition to any other meetings in that year, and should specify the meeting as that in the notices calling it. Not more than 15 months should elapse between the date of one annual general meet - ing of a company and that of the next. However, as long as a company holds its first annual general meet - ing within 18 months of its incorporation, it need not hold it in the year of its incorporation or in the follow - ing year. A company may, by special resolution, dispense with the requirement to hold annual general meetings. Therefore, the provisions of the Companies Act requir - ing that a company appoint an auditor or auditors at each annual general meeting shall be deemed to have no effect in respect of that company for such time and in respect of such years as the resolution shall have effect. This does not, however, circumvent the requirement placed on a company to appoint an audi -
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