UK Offence Report

Traded companies: duty to circulate members’ matters for AGM

regulation 340A(3) of The Companies (Shareholders’ Rights) Regulations 2009

This offence was read from the text as made, and no revised version was available, so a later revocation could not be ruled out. Check the current text at legislation.gov.uk.

What the provision says

3 In the event of default in complying with this section, an offence is committed by every officer of the company who is in default.

Text as made, from legislation.gov.uk. © Crown copyright, reused under the Open Government Licence v3.0. This is the text as originally made; later amendments are not shown here.

Who it binds, and what has to be proved

Binds
a company
Conduct
breaching the provision
Fault element
Strict liability
Burden of proof
No statutory defence — prosecution proves everything

The prosecution must prove that the conduct happened. This is a strict liability offence as drafted: the provision uses no word of intention, knowledge, recklessness or negligence, so there is no need to show that a company meant to do it, knew about it, or was careless.

Intention, knowledge and carelessness are irrelevant to guilt. They may still matter a great deal to sentence.

The provision states no defence, so the prosecution bears the burden on every element of the offence.

Classifier’s reasoning: no word of intention, knowledge, recklessness or negligence in the offence or its provision.

What would breach regulation 340A(3)?

These are illustrations, not law. They are generated from the provision’s own words to show the shape of the offence. Whether any particular conduct is caught depends on the full text, on any amendment since, and on the facts.

  1. Doing what the provision prohibits, or failing to do what it requires under the Companies (Shareholders’ Rights) Regulations 2009.

Penalty

Mode of trial
Either way — magistrates’ court or Crown Court
Maximum fine
£5,000
Maximum prison (summary)
Not determined

expressed as the statutory maximum (the prescribed sum): the same words mean £5,000 in England and Wales and £10,000 in Scotland.

Sentencing

Offences of this kind are usually sentenced under the guidelines below. This is a mapping by subject, not a finding about this provision, and the links go to a search of the Sentencing Council’s own site.

Prosecution figures

No published per-offence figure was found for this provision, and it could not be matched to a Ministry of Justice offence code. Offences created by statutory instrument very largely do not have one. Absence of a figure is not evidence that the offence is unused.

Status and lifecycle

Current status
Status not determined
Made
2 July 2009
In force from
3 August 2009
Extent
Not stated

How this was established: read from the text as made; no revised version available, so later revocation could not be ruled out.

What the instrument is for

(This note is not part of the Regulations) — the explanatory note published with the instrument, © Crown copyright.

These Regulations implement Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of certain rights of shareholders in listed companies (OJ L 184, 14.7.2007, p. 17) so far as it is not already given effect in United Kingdom law. Except in one respect (regulation 22), they do so by amendment of Part 13 (Resolutions and Meetings) of the Companies Act 2006. This Note does not indicate where in United Kingdom law the Directive is already given effect. Regulation 2 enables Articles 10 (proxy voting) and 13.4 (split votes by nominee shareholders) to be implemented by clarifying the relationship between the general voting rules in sections 282 to 284 and the rules about nominee shareholders, proxies, split votes and corporate representatives in sections 152, 285, 322, 322A and 323. Regulation 3 implements Article 10.1 (shareholders’ rights are the same whether exercised in person or by proxy) and 10.5 (proxies for more than one shareholder may split their votes) by replacing existing section 285 with two new sections, 285 and 285A (section 285A restates existing section 285(3) without any change). Regulation 4 implements Article 6.2 (minimum stake to require a meeting to be called must not exceed 5%) by providing a single percentage, 5%, of the members of any type of company who may require the directors to call a general meeting. Regulation 5 implements Article 12 (voting by correspondence) by providing for votes to be cast in advance. Regulation 6 implements Article 13.4 (split votes by nominee shareholders) by enabling corporate representatives to vote in different ways from one another in respect of different blocks of shares. Regulation 7 implements Article 10.4 (proxies to vote in accordance with instructions). Regulation 8 implements Article 8 (participation in general meetings by electronic means) by preventing anything in Part 13 of the Companies Act 2006 from being an obstacle to meetings being held electronically. Regulation 9 implements Article 5.1 (period of notice for general meetings) by amending sections 307 and 360 and inserting a new section 307A. The changes from existing section 307 are that annual general meetings of private companies with traded shares require 21 days’ notice, and that other general meetings of companies (public and private) with traded shares also require 21 days’ notice unless electronic voting is available and a resolution reducing the period to not less than 14 days was passed at the previous AGM or at a general meeting held since then. Regulations 10 and 11 implement Article 5.3 and 5.4 (contents of notices of, and website publication of advance information about, general meetings of companies with traded shares): and see also regulation 15 below. Regulation 12 implements Article 9 (right to ask questions at general meetings). Regulation 13 implements Article 11 (formalities for proxy holder appointment and notification). Regulation 14 makes consequential provision in respect of class meetings. Regulation 15 requires private companies with traded shares to hold AGMs. This implements the obligation to apply the provisions of the Directive about annual general meetings to such companies which arises from the scope of the Directive provided for in Article 1.1. Regulation 16 implements Article 5.3(b)(i) (notice of rights under Article 6) in respect of annual general meetings by providing for notice to be given of the right to require a company with traded shares to circulate a resolution to be moved at its AGM or to include something on the AGM agenda. Regulation 17 implements Article 6.1(a), 6.2 and 6.3 (right to put items other than resolutions on the agenda of a general meeting) in respect of annual general meetings. Regulation 18 implements Article 6.4 (revised agenda to be circulated when right to put items other than resolutions on the agenda of a general meeting exercised) in respect of annual general meetings and ensures that there is no obstacle to enjoyment of Article 6 rights by placing on the company the cost of circulating resolutions for the annual general meeting of a company with traded shares. Regulation 19 implements Article 14 (determination of voting results and publication on website). Regulation 20 implements Article 7 (requirements for participation and voting at general meetings). Regulation 21 defines a company with traded voting shares as a “traded company”, if the shares are admitted to trading by or with consent of the company. Regulation 22 implements Article 4 (equal treatment of shareholders) by excluding traded companies from the operation of the provision in the amended Companies Act 2006 (Commencement No. 3, Consequential Amendments, Transitional Provisions and Savings) Order 2007 preserving articles in force before 1st October 2007 which provide for the chairman of a company general meeting to have a casting vote. Regulation 23 makes transitional provisions. A Transposition Note has been prepared which set outs how Directive 2006/36/EC is transposed into UK law by these Regulations. An Impact Assessment of the effect that the implementation of the Directive by these Regulations will have on the costs of business, charities and other voluntary bodies has also been prepared and is annexed to the Explanatory Memorandum for this instrument. These are available from the Company Law Directorate, Department for Business, Innovation and Skills, 1 Victoria Street, London SW1, and electronically at www.bis.gov.uk. Copies have been placed in the libraries of both Houses of Parliament.

Read the full note and every offence in this instrument

Other offences in the same instrument

How this was identified as an offence

Everything above rests on the judgement that this provision creates a criminal offence, rather than mentioning one. That judgement is made by rule, from the words of the provision, and this is the rule that made it — with a confidence of 0.55.

Basis
c06_offence_committed
Confidence
0.55 of 1.00

A provision that states a penalty for an offence created elsewhere can read very like one that creates an offence, and the rules can mistake the one for the other. If the text quoted above sets a penalty for something made an offence by another provision, treat the classification on this page with that in mind, and read the instrument.

Check the source