BERMUDA Law and Practice Contributed by: Ian Stone and Leo Shaw, Wakefield Quin Limited
the bye-laws expressly provide otherwise. There is a wide flexibility for the company bye-laws to give shareholders reserved matter controls over board actions on most business decisions. Shareholders exercise their influence through reserved matters (matters requiring shareholder approval under the Companies Act or the bye-laws), the election and removal of directors and the right to requisition special general meetings. Under Section 74 of the Companies Act, shareholders holding not less than 10% of the paid-up capital carrying the right to vote may requisi - tion the directors to convene a special general meet - ing. Holders of not less than 5% of the voting rights may require that a members’ resolution be circulated at the annual general meeting (AGM) (Section 79). 4.3 Shareholder Meetings Every company must hold an AGM in each calendar year, unless an election has been made under Sec - tion 71A of the Companies Act to dispense with the holding of AGMs. The election requires unanimous consent from all shareholders. Key procedural requirements include the following. • Notice: not less than five days’ written notice (Sec - tion 75), though the bye-laws commonly prescribe longer periods (eg, 14 or 21 days for companies). Notice must state the place, day, hour and, in the case of special general meetings, the general nature of the business to be considered (Section 71 (3)). • Quorum: commonly prescribed by the bye-laws, but may be one shareholder in person or by proxy. • Virtual meetings: permitted, provided that all per - sons participating in the meeting can communicate with each other simultaneously (Section 75A). • Voting: ordinarily by show of hands (one vote per member), unless a poll is demanded. On a poll, voting is in accordance with the rights attached to the shares. • Proxies: shareholders may appoint proxies to attend and vote (Section 77). • Written resolutions: in lieu of a meeting, sharehold - ers may pass resolutions by written consent signed by the requisite majority (Section 77A).
• Special general meetings: may be convened by the board or requisitioned by qualifying shareholders (Section 74). 4.4 Shareholder Claims Shareholders in Bermuda have the following limited principal bases of claim. Personal Claims Where a shareholder’s individual rights are infringed (eg, rights under the memorandum and bye-laws, the right to receive declared dividends, the right to vote), the shareholder may bring a direct action. Derivative Actions A shareholder may bring proceedings on behalf of the company where it can show that there is: • fraud on the minority; and • those taking advantage of the fraud control the company. Oppression/Unfair Prejudice Under Section 111 of the Companies Act, a share - holder may petition the court on the ground that the company’s affairs are being conducted in a manner that is oppressive or unfairly prejudicial to the interests of some part of the members, which in practice may be difficult to prove. Just and Equitable Winding Up Under Section 161 of the Companies Act, a share - holder may petition for the winding-up of the com - pany on just and equitable grounds. In practice, the circumstances in which the court would wind up a company are limited. Appraisal Rights Under Section 106 of the Companies Act, dissent - ing shareholders in an amalgamation or merger may apply to the court for a determination of the fair value of their shares. 4.5 Shareholders in Publicly Traded Companies Bermuda law does not impose statutory disclosure thresholds for significant shareholdings. However, the bye-laws of many listed Bermuda companies require
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