Question Tag: Ordinary Business

i) Ordinary Business of an Annual General Meeting (AGM):

• According to Section 153 of the Companies Act, 1963 (Act 179), the notice of a general meeting must contain sufficient details to enable persons entitled to attend to decide whether to attend and to prepare their minds on how to vote.
• The phrase ‘to transact the ordinary business’ of an AGM typically refers to the following items:
  • Declaration of dividends.
  • Election of directors in place of those retiring.
  • Consideration of the accounts and reports of auditors and directors.
  • Fixing the remuneration of auditors.
  • Removal and election of auditors and directors in accordance with sections 135 and 185 respectively.
• Additional information that must be included in the notice for an AGM:
  • Date, time, and place of the meeting.
  • Statement that a member has the right to appoint a proxy to attend on their behalf.

(5 marks)

ii) Procedure for Private Liquidation:

• Affidavit of Solvency: Directors must make an affidavit of solvency, confirming that they have thoroughly inquired into the company’s affairs and believe it can pay its debts within 12 months from the start of the liquidation.
• Resolution for Winding Up: A special resolution must be passed by at least 75% of the company’s shareholders to approve the liquidation. The resolution should also include the appointment of a liquidator.
• Liquidator’s Consent: The person named as the liquidator must have previously consented in writing to the appointment.
• Registrar Notification: Within fourteen days of passing the resolution, the company must send a copy of the resolution to the Registrar, who will publish it in the Companies Bulletin.
• Transfer of Powers: Upon appointment, the powers of the board of directors vest in the liquidator, and the authority of directors ceases except for any necessary actions permitted by the liquidator.

(5 marks)