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For many companies, having enough people present at meetings to pass resolutions can become an administrative nightmare.
For a resolution to be valid, a sufficient number of shareholders must be present. For single member companies, there need be only the one director. In every other case, almost, the minimum quorum is two unless the Articles of Association provide for a greater number.
There are many companies with only two shareholders, and then life can become difficult were one shareholder ceases to co-operate. If one shareholder refuses to attend meetings, it would appear that the other is unable to hold a valid meeting, and is therefore unable to pass resolutions necessary to conduct business. The cases of Re Whitchurch Insurance Consultants Ltd 1993, and Re Opera Photographic Ltd 1989, both indicate how the difficulty can be dealt with. The shareholder who wishes to move matters on, may apply to court under section 371 of the Companies Act 1985, and the court has the power to authorise a meeting to proceed. That authorised meeting will proceed without the prevaricating shareholder. This power is specifically mentioned in section 371 (2).
Section 371 contains a general power of the Court, either of its own motion, or upon request, to order a meeting to take place in the circumstances it prescribes, where otherwise a meeting would prove impossible to arrange satisfactorily.
Often, the threat of making such an application, with an appropriate mention of the costs likely to be involved, and who might be expected to bear them, will usually be enough to ensure co-operation.
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