As we approach the season of end-of-year AGMs, it’s worth a reminder of the requirements for achieving a quorum at general meetings to avoid common pitfalls and to ensure proceedings run smoothly. With many shareholdings held in nominee accounts, we emphasise in this article the authorisations required to ensure that the underlying shareholders can contribute to the quorum and attend and vote at general meetings.
References to a statute in this article are a reference to the Companies Act 2006, unless indicated otherwise.
Also note that comments referencing a general meeting apply to an annual general meeting, too.
If you require any support or guidance on the subjects discussed below, then please contact MSP Company Secretarial here.
The requirements for a general meeting quorum
Section 318 specifies the requirements for a quorum at shareholder meetings, and a company’s articles can impose higher requirements. In most cases, “two qualifying persons present as a meeting are a quorum”, where a “qualifying person” is a registered shareholder, an authorised corporate representative of a registered shareholder, or a person nominated as proxy of a registered shareholder (section 318(3)).
It is important to realise that every entitlement to contribute to a quorum, attend, and vote at a general meeting tracks directly back to the “registered shareholder”, be that a person or a company that is named in the company’s share register. Often, the registered shareholder is a corporate body, usually a nominee. In this case, the underlying beneficial shareholder (UBS) is not the registered shareholder. Therefore, the UBS must take action before the general meeting if they want to attend, vote, and contribute to the quorum.
Shares held by nominees and how they contribute to a quorum
It is important for a UBS to recognise that they must get authorisation from their nominee (who is the registered shareholder) in order to vote their shares in advance of a general meeting. They must also obtain authority from their nominee so that the UBS can attend the general meeting, and so contribute to the quorum.
MSP Company Secretarial can provide support on all filings and document registration for general meetings and AGMs. To find out more, contact us here.
Voting in advance of a general meeting
Voting at a general meeting but not attending the general meeting
Where the UBS wishes to vote at the general meeting, but will not be attending the meeting, the UBS needs to instruct their nominee how they wish to vote. The nominee then submits votes usually via CREST or via a Form of Direction prepared by the company’s share registrar.
With this election, the nominee appoints the ‘chairperson of the meeting’ as the proxy of the UBS to vote the shares applied on behalf of the nominee (and so, on behalf of the UBS).
Votes need to be cast by the nominee before the deadline set out in the notice of the meeting – i.e. by 48 hours before the meeting (ignoring any days that are not working days).
Voting at a general meeting and attending the general meeting
In this case, the UBS:
- Instructs their nominee how they wish to vote, and
- Instructs the nominee to name the UBS as the nominee’s proxy.
The nominee will then apply this voting by CREST (or by Form of Direction), and the nominee will also show the UBS as the proxy for the nominee. That is, the nominee has not only voted the shares are directed by the UBS, but has at the same time identified the UBS as the person to attend, speak, and vote the shares at the general meeting.
With this authority from the nominees, the UBS can attend and vote at the general meeting, and the UBS will be included in the quorum of the meeting (if the UBS subsequently does not attend the general meeting, they do not contribute to the quorum nor will their shares be voted).
When a letter of corporate representation is required
The process of ”prior meeting voting via the Form of Proxy” closes 48 hours (where no account is taken of any part of a day that is not a working day) before the time of the scheduled general meeting. If the UBS misses the voting window between receiving the notice of general meeting and the 48-hour deadline for the submission of Forms and no proxy nomination is made, then the UBS can ask their nominee for a Letter of Representation. This Letter authorises the UBS to attend and vote at the general meeting. With a Letter of Representation, the UBS can be present at the general meeting (always making sure to take ID with them), where they will contribute to the quorum and be able to vote.
Companies as the registered shareholder (not a nominee)
If a company is the registered shareholder, anyone attending as the company’s representative needs a Letter of Representation. This letter must be signed by the authorised signatories of that company. It authorises the person to attend, vote, and speak at the meeting as the company’s representative.
It is important to have an understanding of the quorum requirements, and any authorisations required. Where you are unclear, MSP Company Secretarial can be consulted to help you.
Achieving a general meeting quorum: In summary
| Registered shareholder* | Form of Proxy | Attending the general meeting |
| Individual | Completes in his/her name, voting as appropriate only if (1) has no plans to attend the meeting, or (2) wants to ensure votes are cast, even if s/he intends to attend the meeting.
Form appoints ‘chairman of the meeting’ as proxy to vote shares. ‘Chairman of the meeting’ forms one member of the quorum.
|
Arrive at the general meeting with ID (to confirm individual’s identity) and attends and votes at the general meeting as normal.
Individual contributes one to the quorum of the general meeting. |
| A nominee | UBS instructs nominee how to vote on UBS’s behalf. If UBS also wants to attend the general meeting, then instructs nominee to appoint UBS as its proxy.
Form appoints UBS as proxy to vote shares.
If UBS attends the meeting, then UBS contributes one to the quorum.
|
UBS is appointed as proxy for the nominee by a Form of Proxy (completed and signed by the nominee). If not, then UBS obtains a Letter of Representation from the nominee – this Letter authorises the UBS to attend and vote.
UBS attends meeting with ID.
UBS with Letter contributes one to the quorum.
|
| A company | Form is completed by the authorised signatories of the company.
Form appoints ‘chairman of the meeting’ as proxy, and chairman counts one to the quorum.
|
A Letter of Representation signed by the authorised signatories of the company naming the person attending the general meeting (and the number of shares being represented). The person attending takes ID.
Person attending with Letter contributes one to the quorum.
|
[* The name that appears on the company’s share register.]
The consequences of not being nominated as proxy or representative and its impact on a general meeting quorum
A UBS is not the registered shareholder. Consequently, a UBS cannot count towards the quorum, or attend or vote at a general meeting unless s/he has authorisation to attend, speak and vote from the registered shareholder. As mentioned, this authorisation is given in the following forms:
- Nomination as the nominee’s proxy submitted by a Form of Proxy received before the 48-hours cut-off before the meeting (i.e. 48 hours before the general meeting ignoring the days that are not a work day); or
- Appointment as the representative of the nominee or of company (that is the registered shareholder) – letter of corporate representation.
The need for this authorisation is being emphasised because with many company articles still requiring two people (member or nominated proxy/representative) to attend the meeting in person to form the quorum, the quorum may not be achieved where one of the two people hold their shares via a nominee and does not have the necessary authority to contribute to the quorum. In which case, the general meeting cannot proceed – it will have to be adjourned.
The ‘chairman of the meeting’ contributes one to the quorum by proxy
Forms of Proxy by default appoint the ‘chairman of the meeting’ as the proxy for the registered shareholder who wishes to vote but not necessarily attend the general meeting. For a general meeting, there may be many Forms submitted appointing the ‘chairman of the meeting’. The effect of this voting is:
- The ‘chairman of the meeting’ counts one to the quorum, no matter how many Forms are received, or the number of shares that are voted by proxy; and
- The ‘chairman of the meeting’ counts as one to the quorum even if s/he is both appointed as proxy and is also a registered shareholder.
If the shareholding and proxy-nominated ‘chairman of the meeting’ counts as one to the meeting quorum, it is essential there is a second shareholder, or proxy/representative having the correct authorisations available to complete the quorum.
How can MSP Company Secretarial help with quorums and General Meetings?
MSP Organisation is a professional services group that includes MSP Company Secretarial and Share Registrars. With decades of experience, we can help companies plan, organise and run their general meetings effectively, and compliantly.
In addition to supporting general meetings, MSP Company Secretarial offers:
- full board support
- undertake and advise on statutory filings
- ID verification checks for directors and PSCs as an Authorised Corporate Services Provider
- Advise on corporate governance matters
- Conduct board effectiveness surveys
- Assist companies draft their annual reports
- Registered office services
MSP Organisation supports companies with:
- share registry services (including CREST holdings) via Share Registrars
- accounting services via MSP Chalkdell
- business payroll services via MSP Payroll
- leadership development via MSP Verosa
- marketing and branding via MSP Reach
Contact us if you would like to discuss your requirements with us.
Achieving a general meeting quorum: Frequently Asked Questions
Do proxies count towards the quorum for a general meeting?
Yes. A duly appointed proxy is a qualifying person and can count towards the quorum. If multiple proxies are appointed by the same shareholder, then all the proxies for that shareholder count as one qualifying person for quorum.
I hold shares through a nominee. Can I attend and vote at a general meeting?
Yes—if the registered shareholder (your nominee) authorises you. You must be either appointed as the nominee’s proxy or given a Letter of Representation (corporate representation) to attend, speak and vote. Without that authorisation, you cannot contribute to the quorum or vote at the meeting.
REMEMBER: Tell your nominee (i) how to vote and (ii) to appoint you as the nominee’s proxy. Alternatively, obtain a Letter of Representation from the nominee. Bring photo ID to the meeting.
I missed the proxy submission deadline. Can I still attend and vote at the general meeting?
Ask your nominee for a Letter of Representation. With that, you can attend in person, be counted towards the quorum and vote your shares at the meeting. Bring photo ID.
Any quick advice to avoid quorum pitfalls on the day of the general meeting?
- Identify at least two qualifying persons in advance (e.g., a director who is a registered holder and one properly authorised proxy/representative).
- Double-check that nominee-held shareholdings have either appointed the underlying beneficial shareholder as proxy or issued Letters of Representation.
- Confirm proxy cut-off times and encourage early submissions.
Remember that if a person is appointed as proxy to attend the meeting, but does in fact does not attend the meeting, then the nominated proxy’s votes are not counted in a vote, and the proxy is not included in the quorum.
Can a general meeting quorum be achieved by attendees using video conferencing?
Yes, provided the articles of association allow for general meetings to be held as a hybrid or a virtual meeting.
A virtual shareholder meeting is one that is held exclusively using online technology without a corresponding physical, in-person meeting. A hybrid meeting is a meeting that is held both at a physical location and electronically, providing shareholders with the option to attend and fully participate in the meeting (including voting in real time and asking questions) either in person or virtually. The quorum must remain in attendance throughout the meeting.
Do all meetings require a quorum?
The Companies Act states that there must normally be a quorum for the meeting to be valid and decisions made in the meeting to be upheld. The requirement for a quorum is usually set in the company’s articles of association, however where there are no specific provisions in the articles of association, two qualifying persons present at a meeting are a quorum, unless they are both a qualifying person as the representative of the same corporation or as proxy of the same member. Where a company has only one member, the quorum is reduced to one.
If you require support and advice on any aspect of achieving a quorum for a general meeting then don’t hesitate to contact us.