Alternate Directors
An alternate director (commonly simply referred to as an ‘alternate’) is a person appointed by an existing director under a company’s articles of association to take their place at a board meeting when the appointing director cannot attend.
There is no power to appoint an alternate in the Companies Act 2006 (‘CA 2006’) and the common law dictates that it is only possible to appoint an alternate if the company’s articles of association provide for it.
Alternate directors could be another director of the company or a third party and might be an individual, company or other entity with separate legal personality, if the articles of association so prescribe.
The restrictions on who can be director will apply to an alternate.[1]
In accordance with ss167 and 250 CA 2006, the appointment of an alternate director should be notified to Companies House by filing Form AP01, or electronically via the Companies House website.
Proxies
A proxy is a person who is appointed by a shareholder to attend and vote on their behalf at a shareholders’ meeting. The power to appoint a proxy is granted by s324 CA 2006 and this power might be supplemented by the company’s articles of association and/or shareholders’ agreement.
Proxies could be another shareholder of the company or a third party and might be an individual, company or other entity with separate legal personality, if the articles of association so prescribe.
The common law dictates that the power to appoint a proxy cannot be fettered by the company’s articles or shareholders’ agreement.
In the case of joint shareholdings, the first named holder has the right to appoint a proxy whereas the others do not. This is intended to ease the administrative burden on companies.
Every shareholders meeting notice needs to state that there is a right to appoint a proxy and state any more extensive rights granted by the articles of association (s325 CA 2006).
The articles of association will usually prescribe how a proxy should be appointed and a proxy form is usually required in this regard. The proxy form might allow the shareholder to specify how the proxy is to vote and allow abstention on matters which arise at the meeting without prior notice.
If a company makes an invitation to shareholders to appoint a particular person to act as a proxy, this invitation must be provided to all shareholders (s326 CA 2006). This is to stop the directors only providing this option to those shareholders that they think will agree with the matters to be resolved.
In the case of a company having share capital, a shareholder may appoint more than one proxy (s324(2) CA 2006). A proxy must however be appointed in relation to a different share or shares held by the shareholder, or different £10 (or multiple of £10) of stock.
If a shareholder wants to terminate the appointment of their proxy, this will only take effect if the notice of termination is received by the company (or such other person specified in the Articles) before the start of the meeting or adjourned meeting. Accordingly, at the start of every meeting, a check should be made in this regard.
Corporate Representatives
If a corporation is a shareholder of a company, it may by resolution of its directors authorise a person / persons to act as its ‘corporate representative’ / ‘corporate representatives’ at any meeting of the company (s323(1) CA 2006).
That corporate representative is entitled to exercise (on behalf of the corporation) the same powers as the corporation could exercise if it were an individual shareholder of the company (s323(2) CA 2006).
Using a corporate representative instead of a proxy is normally preferred by corporate shareholders as the representative simply needs to turn up at the meeting with proof of their appointment, rather than having to lodge the proxy form at the company’s registered office (usually 48 hours in advance of the meeting).
[1] See ‘Officers of a UK Company’ article.
