Failure of responsible entity to call meeting of the scheme’s members

– section 252C of the Corporations Act 2001

If Directors have failed to call a meeting of the scheme’s members, certain members are entitled to call this meeting. It is an offence for Directors not to provide a copy of the register of members to the members holding the meeting. It is also an offence for Directors not to pay the reasonable expenses of holding the meeting.
This charge will be heard in the Magistrates’ Court.
 
Examples of Failure of Responsible Entity to Call Meeting of the Scheme’s Members
  • You are the Director of a company and responsible for calling a meeting of the scheme’s members every 6 months and you do not call a meeting for a year. Members entitled under s 252B to call a meeting try to call a meeting but they are not provided with a register of all the members.
  • Members entitled to call a meeting of scheme’s members hold a meeting but they are not reimbursed for the cost of printing.
What is the legal definition of Failure of Responsible Entity to Call Meeting of the Scheme’s Members?
It is an offence for Directors of a company not to provide a copy of the register of members to the members holding the meeting of scheme’s members. It is also an offence for Directors not to pay the reasonable expenses of holding a meeting of scheme’s members.

The responsible entity must pay the reasonable expenses the members incurred because the responsible entity failed to call and arrange to hold the meeting and to make the distribution (if any). The responsible entity must not pay those expenses from the scheme’s assets.

Legislation
The section that covers this offence is section 252C of the Corporations Act 2001.

“Did you fail to call and arrange to hold a meeting within 21 days?”

Elements of the offence
  • Members with more than 50% of the votes carried by interests held by the members make a request under section 252B
  • The responsible entity does not call and arrange to hold a meeting within 21 days after the request is given to the responsible entity

  • You are not responsible for calling the meeting.
  • You did not fail to call a meeting within the time limit.
  • You are a director in a company and you took reasonable steps to provide the members with the register.
  • You are a director in a company and took reasonable steps to reimburse the members who organised the meeting.
There are other possible defences, depending on the circumstances surrounding the alleged offending. Each matter is unique and requires an individual approach and strategy.

Questions in cases like this
  • What is the time limit for calling the meeting?
  • Did you fail to call a meeting within this time limit?
  • Did you know that a register of members was not provided?
  • Did you know that members were not reimbursed for holding a general meeting?

The maximum penalty is 5 penalty units.
 
We currently do not have any sentencing info for the offence of Failure of Responsible Entity to Call Meeting of the Scheme’s Members.
 
We currently do not have case studies and links to other information about Failure of Responsible Entity to Call Meeting of the Scheme’s Members.