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Bill introduced to repeal the 100-member rule to call a general meeting

The Corporations Legislation Amendment (Deregulatory and Other Measures) Bill 2014 has been introduced to repeal the “100-member rule” need to call a general meeting. The bill does not include changes to the dividend provisions of the Corporations Act 2001. 

The government released an exposure draft earlier this year, which contained reforms to address the difficulties associated with s 254T and the current dividend test, but these reforms were not included in the final bill. This introduction comes after the Governance Institute of Australia’s decade-long campaign against the “100-member rule”.

Governance Institute of Australia rejected the rule as it left associations open to abuse from within by special interest groups. Under the “100-member rule”, special interest groups could call an extraordinary general meeting (EGM) between AGMs unless the company agreed to negotiate on marginal issues that did not have majority shareholder support.

EGMs come at a cost to shareholders, and for large listed companies the cost can run into the millions of dollars. Shareholder rights are not reduced by the removing of the “100-member rule”, nor are Shareholders disempowered because the bills still allows for special interest groups of five per cent of the votes to requisition

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