GIBRALTAR Law and Practice Contributed by: Adrian Pilcher, Stuart Dalmedo and Louise Anne Turnock, ISOLAS LLP
hold it in the year of its incorporation or in the following year. A company may, by special resolution, dispense with the requirement to hold annual general meetings. Therefore, the provisions of the Com - panies Act requiring 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 auditor, 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 provisions 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 mem - ber, 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 of stock 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. 5.4 Shareholder Claims As discussed in 4.8 Consequences and Enforcement of Breach of Directors’ Duties , directors’ duties are owed to the company and not to the shareholders or any other stakeholder. Therefore, the general rule is that the company itself (acting 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 Compa - nies Act allows shareholders to bring a derivative action on behalf of the company to enforce the company’s rights and to seek relief on behalf of the company. This is an exception to the Foss v Harbottle rule. Permission of a court is not needed to bring a derivative action, but it is needed to continue an action. A derivative action can be brought by a shareholder to bring a claim against another shareholder or director, for example for trans - actions at an undervalue and any action about which they feel aggrieved. Derivative actions can only be brought in respect of a cause of action arising from an actual or proposed act or omission involving negligence, default or breach of duty/trust by a director. A shareholder can also apply to a court on the grounds that the company’s affairs are being
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