Since 2002 the Government has been considering removing the ‘100 member rule’, which requires companies to hold potentially expensive special general meetings at the request of only 100 shareholders. The change may occur this year.
In April 2006 the Exposure Draft Corporations Amendment Bill (No 2) 2006 (pdf) was released; the time for submissions has now closed. The Bill will implement reforms to improve rules for shareholder meetings announced by the Parliamentary Secretary to the Treasurer, the Hon Chris Pearce MP, in December 2005.
Currently Section 249D of the Corporations Act allows company members with 5 per cent of the votes that can be cast at the general meeting or 100 members who are entitled to vote at the general meeting to requisition a general meeting at the expense of the company. Section 249(1) will be repealed and replaced with a section only requiring a meeting to be held on the request of members with at least 5% of the votes that may be cast at the general meeting.
The Government will also proceed with reforms to require proxy holders to vote in accordance with shareholder instructions, and to facilitate electronic circulation of resolutions and members statements.
The Government will not proceed with proposals to reduce the threshold requirements for shareholders to propose members’ resolutions and members’ statements.
The requirements relating to the disclosure of proxy votes before a vote is taken at a meeting of shareholders(subsection 250J(1A)) will be repealed.