7 March 2017

The right of members of a company to call a general meeting under the Corporations Act

In March 2015, the Corporations Legislation Amendment (Deregulatory and Other Measures) Act 2015 (Cth) (Amending Act) abolished the statutory right of 100 (or more) members of a company to require the directors of the company to convene a general meeting of members.

Although the Amending Act has been in effect for some time, our experience suggests some companies remain unaware of this subtle, but important, change in the law.

What are members’ rights to call a general meeting of members?

Under the Corporations Act 2001 (Cth) (Corporations Act), members of either a proprietary or public company have the ability to call a general meeting of a company if members with at least 5% of the votes that may be cast at the general meeting request it.1

A company’s constitution may also contain provisions which prescribe an alternative means for members to call a general meeting. However, the constitution may only provide members with means of calling a general meeting that are less onerous than those set out in the Corporations Act, such as providing for a lower threshold of requisitioning members.

The previous position – the 100 members rule

Prior to the Amending Act, in addition to the right that members with 5% of the votes could require the directors of the company to convene a general meeting of members, 100 or more members of a company also had the right to require the directors of the company to convene a general meeting of members (100 members rule).2

Depending on the number of members of a company, the 100 members rule could potentially be used by a very small minority of members to require meetings be held to vote on resolutions that were often very unlikely to be passed. This resulted in a great amount of time and money being spent by companies arranging meetings to consider a single issue with little prospect of being passed. In litigation relating to a general meeting of National Roads and Motorists’ Association Ltd (NRMA), the New South Wales Supreme Court noted that the requisitioning of general meetings by just 100 of NRMA’s almost two million members equated to only 0.005% of its members.3

Additionally, shareholder and political activists have used the calling of general meetings as a platform to help promote political and social responsibility causes, notwithstanding the proposed resolutions might have a very low prospect of success or not seek to maximise shareholder returns. For example, an activist group gathered the requisite support of 100 members to call a general meeting to try and amend Woolworths Limited’s constitution to limit its ability to profit from gambling (Woolworths was a major owner of electronic gaming machines).4 Only 2.5% of the votes cast at the meeting were in favour of the resolution.5

The Australian Institute of Company Directors has estimated the cost of convening a general meeting of a company can reach as high as $500,000, or even more than $1,000,000.6 This estimate does not include intangible costs such as the distraction to the board and senior management, and the time is taken away from engaging with shareholders that have legitimate corporate concerns.

In 2006, the Commonwealth Government published for consultation an exposure draft of the Corporations Amendment Bill (No 2) 2006 (Cth). The Bill proposed repealing the 100 members rule in section 249D(1)(b) of the Corporations Act. The Explanatory Memorandum accompanying the Bill provided:

“A particular concern is that the rule allows for special interest groups to threaten the imposition of large and unnecessary costs on companies, for publicity purposes or to influence negotiations with the company, to the detriment of the vast majority of members. The 100 member rule has been criticised for giving disproportionate influence to minority shareholders, failing to recognise the substantial size differences between companies.”

Nine years later the Amending Act was finally passed. The Explanatory Memorandum explained that the repeal of section 249D(1)(b) of the Corporations Act was done to:

“better balance the rights of shareholders to raise issues with a company and the costs to companies of being required to call and hold a general meeting”.7

The current position

Section 249D of the Corporations Act now provides that the directors of a company must call and arrange to hold a general meeting on the request of members with at least 5% of the votes that may be cast at the general meeting.8 The percentage of votes that members have is to be worked out as at the midnight before the request is given to the company and this determination is ordinarily made by examining the company’s register of members.9

For a requisition of a general meeting to be valid it must:

  • be in writing;
  • state any resolution to be proposed at the meeting;
  • be signed by the members making the request; and
  • be given to the company.10

The directors must call the meeting within 21 days after the request is given to the company and the meeting is to be held not later than 2 months after the request is given to the company.11

Although 100 members of a company are no longer able to require a general meeting to be called and held, 100 members of a company are still able to:

  • propose resolutions for inclusion on the agenda of general meetings that have already been called through proper means;12 and
  • require the distribution of statements, at the company’s expense, in relation to a proposed resolution or a matter that may be properly considered at a general meeting.13


It is important for companies and their advisors to be aware that that the former 100 members rule no longer applies to allow members to call a general meeting under the Corporations Act. All requisitions for a general meeting must now have the support of at least 5% of the votes that may be cast at the general meeting unless the company’s constitution provides for a different (and less onerous) threshold.

We recommend that existing constitutions be reviewed to determine whether the former legal position for requisitioning meetings is reflected.  If it is, it may be an appropriate time to consider appropriate amendments to the constitution.  This may also be the catalyst for a broader review of the company constitution, which we recommend should be undertaken regularly – not only for law changes but also for changes in the company’s circumstances, scale or business activities.

Companies also need to ensure that any requisition for a general meeting is validly made. For example, companies should ensure that the underlying purpose of the requisition is a proper purpose14 and the notice which records each member’s signature is properly drafted.15 If the requisition is not validly made then the company may be entitled to reject the requisition, notwithstanding the requisition may, on its face, appeared to have satisfied the 5% statutory threshold.

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1Section 249D(1) of the Corporations Act 2001 (Cth).
2s 249D(1)(b) of the Corporations Act 2001 (Cth) as it existed before 19 March 2015.
3NRMA Ltd v Snodgrass; NRMA Ltd v Dupree (2002) 42 ACSR 371 at 376.
4Woolworths Ltd v Getup Ltd (2012) 90 ACSR 670.
5Australian Centre for Corporate Responsibility, ASX 200 companies – recent history of shareholder resolutions and/or statements dealing with environmental or social issues < https://www.accr.org.au/australia>.
6Australian Institute of Company Directors, Submission on the Corporations Legislation Amendment (Deregulatory and Other Measures) Bill 2014 (Cth), 20 January 2015, 2.
7Explanatory Memorandum to the Corporations Legislation Amendment (Deregulatory and Other Measures) Bill 2014 (Cth) at 1.1.
8Section 249D(1) of the Corporations Act.
9Section 249D(4) of the Corporations Act.
10Section 249D(2) of the Corporations Act.
11Section 249D(5) of the Corporations Act.
12Section 249N(1)(b) of the Corporations Act 2001 (Cth).
13Section 249P(2)(b) of the Corporations Act 2001 (Cth).
14Australian Innovation Ltd v Petrovsky (1996) 21 ACSR 218.
15Gratton v Carlton Football Club (2004) 51 ACSR 29.



Melinda Woledge

Marketing & Communications Manager

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