Shareholder Proposal
This section provides a brief explanation of the right of shareholders to propose a resolution for a shareholders’ meeting.
Related: Shareholder Rights
Shareholder proposal rights
Any shareholder of a public company who meets the shareholding requirements (described below) has the right, under the Companies Act, to request that the company include a proposed resolution in the notice of the shareholders’ meeting, thereby subjecting it to a vote.
Shareholding requirements
The proposing shareholder must have continuously held at least 1% of the total voting rights or 300 voting rights of the company for a period of six months or longer. Two or more shareholders may combine their holdings to satisfy this requirement.
Eligible matters
Any matter that the Companies Act or the company’s Articles of Incorporation permit the shareholders’ meeting to approve is eligible for a shareholder proposal. Matters requiring shareholder approval)
If the number of proposed resolutions exceeds ten, the board may disregard any excess proposals. Additionally, the board has the discretion to reject any proposal that is substantially similar to matter that was rejected by a shareholders’ meeting within the past three years.
Deadline
A shareholder proposal must be submitted at least eight weeks before the relevant shareholders’ meeting.
If you are considering submitting a shareholder proposal, you should seek legal advice well in advance of the eight-week deadline to ensure that all documentation and procedures are properly followed.
Related: Shareholder Rights