AGM season is on us and, yet again, the AGM notice period is the subject of many debates. The issue is that the ambiguous language of the Companies Act 2006 makes computing notice periods for annual general meetings problematic. The objective here is to clarify and provide a standard for the date of the notice.
The Act states that the notice period for an AGM is 21 days’ notice, although 21 clear days’ notice is implied and it’s this interpretation which we use. According to the Act the period of notice is defined as the day on which the notice is given, not deemed received. As most people are aware, an annual general meeting of a public company must be called by a notice of at least 21 days.
SO HOW LONG IS 21 DAYS?
When the document is sent by post to an address in the UK it is deemed to have been received by the intended recipient 48 hours after it was posted. In calculating a period of hours for these purposes no account shall be taken of any part of a day that is not a working day.
The relevant company’s articles can override the 48-hour provision and many companies do shorten this period to 24 hours in their articles. If the statutory provisions apply, no account is taken of any part of a day that is not a working day but often the relevant company’s articles do not contain this restriction.
None of these regulations make what should be simple calculation straightforward, so we have set out a standard form to compute the date of a meeting from the date of the day of notice:
Day of notice = N
(assuming date of notice is also the date sent)
N+2 = day of deemed receipt (if N+1 or N+2 is not a weekend or bank holiday)
N+3= day 1 of notice period
N+23= day 21 of notice period
N+24 = first possible date of meeting
From this you can see that 21 days is at least 25 days and could be as much as 27 days.
Whilst thinking about your AGM you may also wish to consider the whole of the AGM package which includes the minutes, the resolutions for Companies House and the Chairman’s script. We can draft or review your notice and provide the complete AGM package for you, including someone to attend the meeting to assist with such matters as signing in of shareholders and conducting a poll if required.
If you feel your company can benefit from our expertise and would like further details please contact MSP.