BASIC PRINCIPLES OF DRAFTING MINUTES & RESOLUTIONS(COMPANIES ACT, SINGAP0RE)

BENJAMIN ANG

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OBJECTIVES

Identify the documents to be prepared for convening members and directors meeting

Distinguish between matters at directors and members meeting

Draft documents required for convening members and directors meeting

Draft resolutions and minutes of meeting

WHY HAVE MEETINGS? A company is owned by its members/

shareholders Ultimate control of a company lies with its

members Members control the company

By voting at meetings and By appointing the company’s Board of DirectorsThe Board of Directors has its own meetings

At meetings, decisions are made by passing resolutions

WE NEED TO HAVE A MEETING

You are the Company Secretary of Spendz Big Buckz Pte Ltd

The Company wants to pass resolutions toSign a Tenancy Agreement with CashLand

MallsChange its name to Earnz Big Bucks Pte LtdIssue 100 shares to Mr. Kash Money for

$10,000 What do you need to do?

DIRECTORS’ MEETINGS / BOARD MEETINGS

WHAT TYPE OF MEETING IS NEEDED?

Directors / Board Meeting Members / General Meeting

Purchase or disposal of substantial property or assets of company

Company is required to incur substantial liability

Tenancy agreement Bank account Loan facility

Issuing of shares Amending the

Memorandum and Articles of Association

Reducing the share capital of the company

Changing the name of the company

Liquidating the company

OTHER TYPES OF MEETINGS

Annual General Meeting Statutory Meeting

Compulsory: Every calendar year and not more than 15 months after the last AGM – Section 175(1)

A private company may, by unanimous resolution passed at a general meeting, dispense with the holding of AGM – s175A

Compulsory for every public company limited by shares

Not less than one month and not more than three months after commencing business – Section 174 (1)

One time only

Discussion

What kind of meeting(s) does the Company need to have in order to:Sign a Tenancy Agreement with CashLand

MallsChange its name to Earnz Big Bucks Pte LtdSell 80% of its assets to another company,

Little Buckz Pte Ltd

WHAT DOCUMENTS ARE NEEDED?

DOCUMENTS FOR BOARD MEETINGS The articles do not

usually provide any form or period of notice for directors’ meetings.

It depends on the usual practice of a company

You should ensure that all those attending are aware that the occasion is a directors’ meeting

Otherwise the decisions may not be valid

DOCUMENTS FOR MEMBERS’ MEETINGS

AGM EGM

Notice of AGM with proposed resolutions

Proxy forms Internal documents

Previous minutes Profit & loss Balance sheet Consolidated accounts

Notice of EGM with proposed resolutions

Proxy Forms Any relevant attachments

NOTICE: What it must contain All members must be given written notice

of meetings The notice must contain sufficient

information to enable a member to decide whether or not to attend.

A member who is absent from the meeting is bound by the resolutions passed at the meeting except where a material fact was not

disclosed in the notice.

NOTICE: When it must be given

Private Company

Public Company

Notice of meetings to pass

ordinary resolutions

Not less than 14 days

Not less than 14 days

Notice of meetings to pass

special resolutions

Not less than 14 days

Not less than 21 days

A Special Resolution can be passed with short notice if it is agreed by not less than 95% majority of the members who have the right to vote – Section 184(2) Companies Act

NOTICE – What happens if it’s done wrong Any irregularity, including a defect in the

notice,does not automatically invalidate a proceeding unless the High Court is of the view that

substantial injustice has been caused – Section 392(2)

Any member can apply to court to declare the meeting null and void – Section 392 (3)

Where a member is not served with a notice, the Court would be more inclined to declare the proceedings void

QUORUM – Why Proxy is needed

In order for a general meeting to be valid, there must at least be 2 members present – Section 179(1)(a) Companies Act

For companies with only one member, that member constitutes a quorum and can pass a resolution - Section 184G Companies Act

Members unable to attend meetings personally can appoint a proxy (agent) to attend and vote on their behalf - Section 181(1) Companies Act

PROXIES – How they work Proxies need not be members; one person may be

proxy of more than one member If no proxy forms are lodged, then the proxy cannot

attend and vote A member may wish to state on the proxy form the

manner in which he would like his vote to be exercised.

If a member wishes to retain the option of changing his instructions to his proxy, he should not specify in the proxy form which way the proxy was to vote. However, by doing so, he takes the risk - Tong Keng Meng v Inno-Pacific Holdings Ltd

TIME TO DRAFT THE NOTICE

REFER TO THE PRECEDENTS

DRAFT minutes of meeting

WHY DO WE NEED MINUTES? Minutes are the records of the proceedings

of a meeting Every company must cause minutes of all

proceedings of general meetings and of meetings of its directors and of its managers (if any) to be entered in books kept for that purpose (s 188(1)(a))

They must be signed by the chairman of the meeting at which the proceedings were held or by the chairman of the next meeting

HOW TO TAKE EFFECTIVE MINUTES Agenda Templates Tools Focus

AGENDA

How to do itContact chairman or participants before the

meetingAsk them what they want to discuss

BenefitsEnsures that all business is coveredPrevents members, board members, and

participants from wasting timeKeeps meeting length to a reasonable timeHelps you prepare the Template

TEMPLATE

Attendance sheet Seating Plan Standard Template

Time and dateReports of Officers

DirectorsOngoing projects Agenda Items

New proposals / Announcements

Old BusinessNew BusinessFollow up required

(and by who)Date of next meeting

TOOLS

Laptop / Tablet Voice recorder – but don’t rely on it Power supply / batteries Pen and paper – important backup

FOCUS

Summarize the main point of each topic discussion

BUT copy motions, amendments and other items to be voted on word for word

Use short forms (that you can remember) Write the name of any person making a

motion Ask for clarification, don’t get it wrong Sit as close as possible to the chair of the

meeting (in case you need to ask)

FOCUS Write things as they happen, do not try to group

topics together Record the actions that are performed during the

meeting After discussion, write down any agreed-upon next

steps or decisions recommended actionsdate dueresponsible persons or department

Record the number of votes for a resolutionOrdinary: More than 50%Special: More than 75%

AFTER THE MEETING

Transcribe immediately, while the experience is fresh

Compare your first draft of the minutes with your audio recording

Circulate the draft to all board members to ensure there are no miscommunications

TIME TO TAKE MINUTES

We will now have a Board Meeting to decide on whether or not to Sign the Tenancy Agreement with CashLand

MallsIssue the shares to Mr. Kash Money

Use the sample templates given

Draft resolutions

Drafting Effective Resolutions Check if they require shareholder approval Principle: anybody referring it later date will

know clearly what the decision was at the meeting without referring to any other document.

Be thorough and detailedIssuing shares? State how many, when, to

whomAuthorizing contracts? List them all

State type of meeting (Board or General) State type of resolution (Ordinary, Special,

Simple Majority).

Drafting Effective Resolutions Refer to Articles, Rules, Act if needed Refer to documents where needed e.g.

letter of appointment State if resolutions are subject to

approval of authorities State when resolutions take effect Keep to one subject matter per

resolution.

TIME TO DRAFT RESOLUTIONS

Draft a resolution to sign a 2 year tenancy agreement with CashLand Malls for a commercial unit of 1,000 square feet, at the rate of $10 per square foot

Draft a resolution to issue 100 shares to Mr. Kash Money for $10,000

Refer to the samples

What did you learn today?