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Alex J.
Alex J., Litigator
Category: UK Law
Satisfied Customers: 3495
Experience:  LLB, LPC, DELF
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As members/shareholders of an organisation we are looking to

Customer Question

Hi,
As members/shareholders of an organisation we are looking to call for an EGM to force a member vote on a number of points of policy. The organisation is classified at a "Company Limited by Guarantee and Not Having a Share Capital".
The Articles of Association state the following:
"Subject to the provisions of the Act and the Articles, the administration, direction and management of the affairs of BWLA shall be vested in the Board who may exercise all the powers of BWLA."
"Without prejudice to the general powers and duties conferred on the Board, the Board may:
34.1 affiliate to, or resign, from such international or national associations as the Board considers desirable;
34.2 make, repeal and amend such bye-laws or rules for the conduct of the affairs of BWLA as seem to the Board necessary or desirable, and in particular shall make, repeal and amend such bye-laws and rules as shall be necessary from time to time for the protection of children and
vulnerable adults and to ensure the implementation of an equality policy and also such other policies as shall from time to time be deemed
necessary by the Board, or required by any public authority;"
With this taken into account, if the board make a rule or policy change, and we as a membership/shareholder base ask for a vote against that change, would:
A) They have to hear that vote?
B) If we voted to force the abandonment of that rule/policy change would they have to abide by the outcome of that vote?
If the answer to B) is that they wouldn't have to abide by the vote and could proceed with their rule/policy change, is our only means of blocking it to remove the board?
Thank you
Phil Nourse
Submitted: 10 months ago.
Category: UK Law
Expert:  Alex J. replied 10 months ago.

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you - I am a company law expert. The simple answer to your question is yes they would have to abide by the members' will assuming that at least 75% of the members, entitled to vote at a valid meeting, voted in favour of repealing this rule. Ultimately this rule is part of the company constitution and articles of association and to amend the articles of association you need a special resolution (75% of the voting members voting in favour). If the directors refuse to call a meeting, then you would have to force an EGM under the Companies Act 2006 S 303. I would also bare in mind the directors must act within the powers contained in the company constitution - in doing this they cannot use this as a justification to unfairly prejudice members of the company as per S994 of the Companies Act 2006. Does the company have a separate members agreement?