Companies Act 2006 s.318 – Quorum at meetings

(1)In the case of a company limited by shares or guarantee and having only one member, one qualifying person present at a meeting is a quorum.

(2)In any other case, subject to the provisions of the company's articles, two qualifying persons present at a meeting are a quorum, unless—

(a)each is a qualifying person only because he is authorised under section 323 to act as the representative of a corporation in relation to the meeting, and they are representatives of the same corporation; or

(b)each is a qualifying person only because he is appointed as proxy of a member in relation to the meeting, and they are proxies of the same member.

(3) For the purposes of this section a “qualifying person” means—

(a)an individual who is a member of the company,

(b)a person authorised under section 323 (representation of corporations at meetings) to act as the representative of a corporation in relation to the meeting, or

(c)a person appointed as proxy of a member in relation to the meeting.

Read section 318 in the full Act → Definitions (5) Cases (5)

Definitions used in section 318

company: “company” means a company formed and registered under this Act, that is—

(a)
a company so formed and registered after the commencement of this Part, or

(b)
a company that immediately before the commencement of this Part—
(i)
was formed and registered under the Companies Act 1985 (c. 6) or the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), or

(ii)
was an existing company for the purposes of that Act or that Order,

(which is to be treated on commencement as if formed and registered under this Act).

Defined in s.1(1) · see it in the full Act; (4) In this section and that Schedule “company” includes any body corporate.
Defined in s.1159(4) · see it in the full Act
share: (1) In the Companies Acts “share”, in relation to a company, means share in the company's share capital.
Defined in s.540(1) · see it in the full Act
member: (2) In sub-paragraph (1) “member” has the same meaning as it has by virtue of section 7(1) of that Act .
Defined in Sch.2 Pt.1 · see it in the full Act
articles: (4) References in the Companies Acts to a company's “articles” are to its articles of association.
Defined in s.18(4) · see it in the full Act
corporation: “body corporate” and “corporation” include a body incorporated outside the United Kingdom, but do not include—

(a)
a corporation sole, or

(b)
a partnership that, whether or not a legal person, is not regarded as a body corporate under the law by which it is governed;

Defined in s.1173(1) · see it in the full Act

Cases considering section 318 (5)

Randhawa & Anor v Turpin & Anor

[2017] EWCA Civ 1201 · 1 August 2017

A quorum of one applies only to a company having one member. Since the dissolved corporation remained a registered member, the company never became a single-member company and the provision did not validate a one-person members’ meeting. (see paras [63]; [71]-[72])

Chong & Ors v Alexander

[2016] EWHC 735 (Ch) · 8 April 2016Interprets

The court considered the statutory quorum provisions but decided the issue by construing Regulation 40 of Table A. A member attending personally could not be counted with that member’s proxies to create the required quorum. (see paras [171]-[181])

Schofield v Jones

[2019] EWHC 803 (Ch) · 1 April 2019

Section 318(2) requires two qualifying persons to be present at a company meeting where the company is not a single-member company. That requirement made the proposed meeting inquorate without the respondent’s attendance and engaged the section 306 jurisdiction. (see paras [5]-[6])

Toone & Anor v Robbins & Anor[2018] EWHC 569 (Ch) · 20 March 2018
Harding & Anor v Edwards & Ors[2014] EWHC 247 (Ch) · 14 February 2014

What each judgment says about section 318 is in the case-law panel in the full Act.

Explanatory note

564.This section replaces sections 370(4) and 370A of the 1985 Act. It sets a quorum for a meeting of one “qualifying person” in the case of a single member company and – as a default – two “qualifying persons” in any other case. Subsections (2) and ( 3) ensure that a member, corporate representative or proxy present at the meeting may all be “qualifying persons”, but excludes the possibility of two or more corporate representatives or proxies of the same member comprising a quorum. Under these provisions, proxies and corporate representatives do not count towards a quorum in companies with more than one member.

All the explanatory notes for the Act

Amendments and notes

1 notes from legislation.gov.uk

Commencement

I133S. 318 wholly in force at 1.10.2007; s. 318 not in force at Royal Assent see s. 1300; s. 318 in force at 1.10.2007 by S.I. 2007/2194, art. 2(1)(f) (with saving in art. 12 and subject to transitional adaptations specified in Sch. 1) this amendment is subject to savings and/or transitional provisions, see the commentary.