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.

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 are some of the possible defences to a charge of Failure of Responsible Entity to Call Meeting of the Scheme’s Members?
  • 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?

Court that deals with this charge

This charge would be heard in the Magistrates’ Court.

“Did you fail to call a meeting within the time limit?”
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.

Legislation

The section that covers this offence is section 252C of the Corporations Act 2001.1

 


[1] Corporations Act 2001 – Section 252C

(1) Members with more than 50% of the votes carried by interests held by the members who make a request under section 252B may call and arrange to hold a meeting of the scheme’s members and distribute the statement (if any) if the responsible entity does not do so within 21 days after the request is given to the responsible entity.
(2) The meeting must be called and the statement is to be distributed in the same way–so far as is possible–in which meetings of the scheme’s members may be called by the responsible entity and information is distributed to members by the responsible entity. The meeting must be held not later than 3 months after the request is given to the responsible entity.
(3) To call the meeting the members requesting the meeting may ask the responsible entity under section 173 for a copy of the register of members. Despite paragraph 173(3)(b), the responsible entity must give the members requesting the meeting the copy of the register without charge.
(4) 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.
(5) An offence based on subsection (3) or (4) is an offence of strict liability.