James Burden is considering buying shares in a company, Saturday Night Live Ltd (SNL).
After purchasing 1,000 shares of SNL, James received a letter (via email) from the company
secretary advising him of a forthcoming annual general meeting (AGM). As a new
shareholder of SNL, James has plenty of questions to SNL’s company secretary.
James rings and asks SNL’s company secretary to explain to him what is meant by the terms
‘member’ and ‘shareholder’, and the different ways in which a person may become a member.
He also asks to explain who may be eligible to become a member, and how many members
a company is permitted to have. Finally, James asks: how does a person cease to be a
member of a company?
1. Pretend that you are the company secretary and provide advice to James
regarding his questions above. Use relevant sections of the Corporations Act
2001 and/or case laws to support your answer (5 marks)
At the company’s annual general meeting, James bumps into the company secretary. James
had observed that the notice he had received advising him of his company’s annual general
meeting had stated that it would commence ‘at 1 pm’. Yet, on the day, the annual general
meeting had not commenced until 1.10 pm because the chair had been delayed in traffic
while trying to reach the meeting’s venue. James surmised that this delay in starting the
meeting could constitute a procedural irregularity that could only be rectified by his company
conducting the whole annual general meeting again.
2. Pretend that you are the company secretary and provide advice to James
regarding his question on procedural irregularity. Use relevant sections of the
Corporations Act 2001 and/or case laws to support your answer (3 marks)