A recent decision in the case of Glencoe Developments Ltd -v- Sneddon is a warning for all companies.
Glencoe had two shareholders one of which purported to transfer one of her shares to her husband (creating 3 shareholders in total).
Glencoe Developments then held a general meeting of its members at which they agreed to sell a substantial property asset. However, only the transferee and her husband were in attendance at the meeting.
The resolution purporting to sell the asset was invalid, as the husband had not been recorded as being a shareholder in the company books at the date of the meeting. It was held that the meeting was inquorate and therefore could not conduct any business.
This case highlights the importance of properly maintaining your statutory registers. A failure to do so is contrary to the Companies Act 2006 and may lead to a fine. Further, if a member is not recorded properly then they are not entitled to vote on decisions which affect the company.
Lindsays offers a full range of company secretarial services including the rectification of company books. Please feel free to contact a member of our team if you would like any more information.