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VIC Company Directors and Shareholder Voting Rights?

Discussion in 'Commercial Law Forum' started by Roger Trewenack, 25 March 2015.

  1. Roger Trewenack

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    We are a small Victorian based business with 4 employees. Myself and 1 of the employees are also company directors. A 3rd party, based in the USA, is also a director. He does not earn any wages from the business.

    The business shares were purchased 20 months ago from the previous owner. The previous owner was paid $250,000 in total, $50,000 from each of the employees, $150,000 from the USA director.
    The 2 employees own 20% each of the shares, sold for $1.00 each, so the employees hold 40% of the shares in the business. The 3rd party owns 60% of the shares, sold for $1.00 each

    I am the "Managing Director", and the Secretary of the business. Under commercial law, what are the voting rights of the Directors? Are they equally split (3 directors = 3 votes) or does the volume of shares owned determine the voting rights? (e.g. USA director has 60% of the vote, each of the other directors have 20% of the vote.)
     
  2. Rod

    Rod Well-Known Member

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    Check your company constitution.

    Directors must represent all shareholders and generally have 1 vote each. Sometimes the chairman has an additional casting vote.

    Shareholders, assuming there are no special classes of shares, can either have 1 vote/block of shares in a show of hands, or 1 vote per share in a poll. Check your constitution.
     
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  3. DennisD

    DennisD Well-Known Member

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    In principle, company directors are accountable to its owners, its shareholders. Voting rights, including for example how many votes are required to carry different decisions/resolutions, should be set out in your company constitution, and perhaps complementary docs such as a shareholders agreement. I agree with Rod, please check your constitution and connected documents.
     
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