What is Consent to Shorter Notice?

Amongst the template documents we have made available, you will notice that there is a document titled “Consent to Shorter Notice”. Any idea what that is for and when you should use it?

Background

When your Company wishes to hold a general meeting, it is required to issue a notice to all shareholder(s). The length of the notice period depends on the nature of the corporate matters tabled for shareholder(s)’ approval. The table below sets out some examples along with the notice period required for your information:

Business to be passed by way of Ordinary Resolution

• Adoption of financial statements
• Declaration of final dividend
• Appointment / Re-appointment of Directors
• Appointment / Re-appointment of Auditors
• Grant of loans or quasi-loans to, or entering into credit transactions for the benefit of, a director of the company or certain persons connected with the said director
• Payment for loss of office to a director
• Disposal of the whole or substantially the whole of the Company’s undertaking or property
• Issuance of shares
• Re-denomination of shares

Business to be passed by way of Special Resolution

• Amendment of the Company’s Constitution
• Change of the Company’s name
• Change from a private to a public company or vice-versa
• Reduction of the Company’s share capital
• Amalgamation with another company
• Voluntary winding-up of the Company

Business requiring Special notice requirement

• Removal of Director
• Removal of Auditors before expiry of term
• Removal of Liquidators

Sometimes, certain corporate matters may need to be attended to urgently and a quick decision from shareholder(s) is required. Under such circumstances, your Company may call for a general meeting at shorter notice.

To do that, your Company will need to obtain approval from shareholder(s) to shorten the notice period i.e. to call a general meeting at an earlier date than what is required to be called under the Companies Act, Chapter 50 ("Companies Act") or your Company’s Constitution.

How to obtain consent to shorter notice

Pursuant to Section 177(3) of the Companies Act, a general meeting may be called at a shorter notice if it is agreed: -

• In the case of an annual general meeting, by all the shareholders entitled to attend and vote at the AGM.
• In the case of any other meeting, by a majority of the shareholders holding at least 95% of the total voting rights of all shareholders entitled to attend and vote at that meeting.

If your Company’s Constitution is silent on the notice period for calling general meetings and the number of shareholders’ consent required for holding general meetings at shorter notice, then your Company can rely on the provision specified under Section 177(3) of the Companies Act.