The shareholders of a company are its financial supporters they provide finance to a company by purchasing shares in it, and through this become shareholders. As a shareholders of a company, they are protected from liabilities as the company is limited. Shareholders have a few specific roles and duties to ensure.

DECISION MAKING

Major decisions which would have an effect on the shareholders rights are usually required, through the companies Act 2006. Only certain acts can be done by the shareholder such as removing a director from office, changing the name of the company or authorizing a service contract for a director which gives him job security for more than two years. The main role is to attend meeting and discuss whatever is on the agenda to ensure the directors do not go beyond their powers.

MEETINGS

Shareholder may require a general meeting to be called rather than simply have all decisions made through written resolutions. The director may call a general meeting at any time for any reason and are entitled to attend and speak as are the shareholder. There is not a statutory requirement to hold an annual meeting if the company is a private company, however the shareholders may request that one is held or the directors may call an annual budget general meeting if desired. In small companies, it is often appropriate to have an annual general meeting where the shareholders are not all directors. The Chairman will supervise the meeting and keep the general structure of it in order. He will declare the decision of the meeting after voting has taken place.

DUTIES OF SHAREHOLDERS

The main duty of shareholder is to pass resolution at general meeting by voting through their shareholder capacity. Shareholders can vote in one of two ways, on a show of hands or through a poll vote where each vote will be proportionate to the amount of shares held by each shareholder. There are two resolutions that can be voted on at a meeting, an ordinary resolution or a special resolution.

RESOLUTIONS

An ordinary resolution is passed by the shareholders if a simple majority of the shareholders present at the meeting vote in favour of the proposal. There should be more than 50% votes. For special resolution to be passed, a 75% majority must vote in favour. If there is no specific mention of what type of resolution should be used, the presumption is that an ordinary resolution would be required. The chairman does not have a casting vote in addition to any other vote he may have. Where no chairman has been appointed by the company, the idea is that if there is deadlock at the voting stage, the negative will prevail and the proposed resolution will fail.