Over the course of the last few weeks, one of the areas that has particularly struck me is the importance that is attached to complying with certain rules and regulations concerning notice periods. Indeed, there are detailed rules outlining the period of notice that is required for shareholder meetings in the Companies Act 2006, and the period of notice that is required under the Civil Procedure Rules when serving a defence to a claim form for civil litigation proceedings.
Board and General Meetings
Under section 307 of the Companies Act 2006, a general meeting (a meeting of the shareholders) of a private company must be called by notice of at least 14 days. In the event of a general meeting of a public company, it must be called by notice of at least 21 days in the case of an annual general meeting and in any other case, at least 14 days. A general meeting may, however, be called by shorter notice than that otherwise required if shorter notice is agreed by the members. In the case of a private company, the shorter notice must be agreed by a majority in number of the members having a right to attend and vote at the meeting, being a majority who together hold not less than 90% in nominal value of the shares giving a right to attend and vote at the meeting or, in the case of a company not having a share capital, together represent not less than 90% of the total voting rights at that meeting of all the members.
In calculating the period of notice, important reference must be made to section 360 of the Companies Act 2006 which holds that a period of specified length excludes the day of the meeting and the day on which the notice is given. This is known as the clear day rule and it extends the period of length required in calling a general meeting.
Notwithstanding the onerous burden concerning notice periods for the calling of shareholder meetings, the notice periods required for calling a board meeting (director meeting) is far more informal and less burdensome. Pursuant to the case of Browne v La Trinidad reasonable notice of the board meeting was necessary, and that this would be whatever notice is usual for the directors to give. Therefore, if all of the directors are in the same building, the meeting could be called almost immediately, if such notice is customary for the directors.
Serving the claim form and other documents
There are similarly detailed provisions outlining the notice period for filing a defence under the Civil Procedure Rules. Under Rule 15.4 of the Civil Procedure Rules the period for filing a defence is 14 days after service of the particulars of claim or if the defendant files an acknowledgment of service, 28 days after service of the particulars of claim. Interestingly enough, the deemed date of service varies if the document is or is not the claim form. Pursuant to Rule 6.14 a claim form served within the UK is deemed to be served on the second business day after completion of the relevant step under rule 7.5(1). Therefore, if for example the claim form is sent first class post, it will be deemed to be served two business days after posting the document. However, pursuant to Rule 6.26, a document, other than a claim form, served within the UK is deemed to be served on the same day if it is delivered before 4:30 on a business day and it is an instantaneous method such as email. If it is not an instantaneous method of service, such as first-class post, the deemed date of service will be the second day after it was posted provided that day is a business day, or if not, the next business day after that day.
In addition to the detailed provisions concerning deemed date of service, the CPR, similar to the provisions of the CA 2006, holds that a period of time expressed as a number of days shall be computed as clear days. In this rule clear days’ means that in computing the number of days the day on which the period begins and if the end of the period is defined by reference to an event, the day on which that event occurs are not included. Furthermore, where the specified period is 5 days or less and includes a Saturday or Sunday, or a Bank Holiday, Christmas Day or Good Friday that day does not count
Author Brandon Silver is a paralegal in the construction department at Silver Shemmings Ash LLP. He is currently undertaking LPC at BPP Holborn as well, having just completed undergraduate Law degree at Durham University. The modules Brandon is currently studying for the LPC include Business Law and Practice, Civil and Criminal Litigation and Property Law. His blog posts will discuss what he has covered during the seminars he has attended and any particular areas that have stood out in relation to the topic.