The members of a company have passed a resolution, so it is final.. or is it?
A meeting of members of a corporation is governed by the constitution of the specific corporation, or the provisions of the Corporations Act 2001 (Cth) (the “Corporations Act”). Even where there is a constitution, in many instances, the terms of the constitution reflect the provisions of the Corporations Act, and its replaceable rules.
If you are concerned about a decision that has been made at a meeting of members of a corporation, or there is a meeting that has been called, you may wish to consider the procedural requirements provided by the Corporations Act. In some cases, a lack of compliance with the procedural requirements can invalidate any resolutions made at that meeting.
Alternatively, if someone is alleging that a meeting of members of a corporation that you have organised which has been held, or is to be held, is invalid, it may be prudent to satisfy yourself that the procedural requirements have been followed.
Calling and convening a meeting of members
If a meeting is not called in accordance with specific procedural requirements, it could be an invalid meeting.
A meeting of members of corporation can be convened:
- by the board of the corporation;
- by a director of the corporation pursuant to section 249C of the Corporations Act;
- by the directors upon the written request of members with at least 5% of votes as provided for by section 249D of the Corporations Act;
- by members with at least 5% of votes pursuant to section 249F(1) of the Corporations Act. Expenses incurred by the corporation for meetings convened by this power are to be paid for by the members who called the meeting, as provided for in section 249F(2) of the Corporations Act; or
- by the Court pursuant to section 249G of the Corporations Act.
A meeting of the members of a corporation cannot be for any reason. To comply with section 249Q of the Corporations Act, a meeting of members of the corporation must be held for a proper purpose. Generally, as long as there is a proper purpose, it does not matter that there may also be an improper purpose.
Section 249R of the Corporations Act permits a meeting of the members of the corporation to be held at various physical venues, using virtual meeting technology, or a combination.
Section 249S(1) of the Corporations Act provides that the corporation, when holding a meeting of the members of the corporation, must give the members entitled to attend, as a whole, a reasonable opportunity to participate in the meeting. The meeting must be held at a time that is reasonable. If the meeting is to be held at a physical venue, it must be reasonable to hold that meeting at that physical venue. If virtual meeting technology is to be used to hold the meeting, the virtual meeting technology is to be reasonable and allow the members to, as a whole, exercise, orally and in writing, any right of those members to ask questions and make comments.
Section 249J (1) of the Corporations Act provides that notice of a meeting of members of the corporation must be given to the members. Section 249J (3) of the Corporations Act provides how a notice must be given, which includes personally, by sending it by post to the address of the member on the register of members, or by technology in compliance with section 110D of the Corporations Act (if it was reasonable to suspect that the notice would be readily accessible so as to be useable for subsequent reference to the members).
Unless members with at least 95% of the votes that may be cast at the meeting agree beforehand, then section 249H(1) of the Corporations Act mandates a twenty – one (21) day notice period for a meeting of members of a corporation.
The above provides a summary of how to call a meeting and how a corporation is meant to give notice of the meeting. The next matter to be addressed is the contents of the notice that is actually given.
The contents of a notice of a meeting is mandated by section 249L(1) of the Corporations Act, which provides that the notice must (as opposed to may):
- set out the date, time and place for the meeting;
- if virtual meeting technology is to be used in holding the meeting – sufficient information to allow the members to participate in the meeting by means of the technology;
- state the general nature of the meeting’s business;
- if a special resolution is to be proposed at the meeting – set out an intention to propose the special resolution and state the resolution;
- if a member is entitled to appoint a proxy, contain a statement setting out information relevant to appointing that proxy; and
- ensure that the information included in the notice of meeting is worded and presented in a clear, concise and effective manner.
A regular defect in a notice that we encounter when advising clients is a failure to sufficiently state the general nature of the meeting’s business. For example, a notice that a matter is to be discussed without indicating that a resolution will be proposed may be inadequate to enable the meeting to pass a resolution. Careful consideration of the drafting of the notice and the business to be conducted at the meeting is critical.
Once the notice of the meeting has been given, during the meeting there are further procedural requirements that must be adhered to.
Conducting a meeting of members
Section 249T(1) of the Corporations Act provides that a quorum of two members of the corporation must be present for the meeting. If a meeting occurs and a quorum is not reached, but all other requirements under the Corporations Act are met, by operation of the sections 249T(2)&(3) of the Corporations Act, the meeting is adjourned to a later time to be determined by the directors.
Section 250E of the Corporations Act provides for counting of votes at a meeting of members of a corporation. During a meeting of members of a corporation with share capital, subject to any rights or restrictions attached to any class of shares, on a show of hands each member has one vote, and on a poll, each member has one vote for each share they hold.
Pursuant to section 250J of the Corporations Act, a resolution put to vote may be decided by a show of hands unless a poll was demanded. In circumstances where a member holds more shares, they should call for a poll, so they have more votes counted, provided they are entitled to call for a poll by complying with section 250L of the Corporations Act, allowing a poll to be demanded by:
- at least 5 members entitled to vote on the resolution;
- members with at least 5% of the votes that may be cast on the resolution on a poll; or
- the chair.
If there is an objection to a right of a person to vote at a meeting of members of a corporation, section 250G the Corporations Act provides that the objection can only be made at the meeting, and must be determined by the chair, whose decision is final.
What if a procedural requirement is not complied with?
The Corporations Act provides by sections 1322(3) & (3AA) a statutory power to cure irregularities and non-compliance with the above requirements, including those relating to giving notice of a meeting.
An application can be made by any interested person pursuant to section 1322(4)(a) of the Corporations Act to validate the conduct relating to the meeting and to cure the irregularities. The interested person needs to show that the matter is essentially of a procedural nature, or the person concerned acted honestly, or it is otherwise just and equitable that the order be made
The powers above are qualified by section 1322 (3A) of the Corporations Act, which can still cause for a meeting to be declared invalid if a Court determines a substantial injustice has been caused or may be caused, and the injustice cannot be remedied by any order of the Court.
Accepted categories of a substantial injustice which cannot be cured by an order of the court have included:
- where there would have been a different result at a members meeting had the procedural irregularity not occurred;
- a failure to give sufficient notice of the meeting, particularly if it is extremely short notice (such as days or hours of notice);
- a member not being provided a reasonable opportunity to participate during the meeting;
- a failure to notify preference shareholders of their right to vote against a resolution; and
- if a director is deprived of an adequate opportunity to address risks associated with proposed resolutions and the meeting proceeds in their absence.
If a person wishes to invalidate a meeting on the basis that a substantial injustice has been caused, they should act promptly, as any delay may be fatal to their claim, such as by other interested persons alleging that the delay in seeking the invalidation will cause them prejudice.
Further information
It is crucial that meetings of members of a corporation are conducted in accordance with the provisions of the Corporations Act. It should also always be remembered that the provisions of the Corporations Act can be displaced by the specific provisions of a corporation’s constitution
Marino Law has extensive experience acting for directors, members and other interested persons, of a corporation, in relation to disputes surrounding meetings of a members, and corporate disputes generally.
The author of this article, Nicholas Rossi, is a solicitor in Marino Law’s commercial litigation and dispute resolution team. Nicholas adopts a solution-focused strategic approach across commercial litigation, insolvency, and deceased estate disputes, grounded in deep technical expertise and commercial acumen. Nicholas has extensive experience in corporations and litigation matters and was a finalist in the 2025 Australian Law Awards (Senior Associate) and two categories of the 2025 Lawyers Weekly 30 Under 30 Law Awards (Insolvency) and (Wills and Estates).
