Members of a company limited by guarantee hold two genuinely distinct rights that get conflated constantly, and the confusion causes more disputes than almost any other single point in this series: the right to call a general meeting, and the right to move a resolution at one. Both come with real thresholds. Neither is unlimited, and understanding exactly where the boundaries sit protects members and boards alike from a dispute that usually turns out to be about process rather than substance.
The right to call a meeting
Section 249D of the Corporations Act 2001 (Cth) allows members holding at least 5 per cent of the votes that may be cast at a general meeting to require the directors to call one. This is a genuinely low bar deliberately, since it exists to give a meaningful minority the ability to force the organisation's attention onto an issue, not just the majority.
The right to move a resolution
The right to propose a resolution for consideration at a general meeting, including an upcoming AGM, is separately governed by section 249N. Members can give notice of a resolution they propose to move if they hold at least 5 per cent of the votes that may be cast on that resolution, or number at least 100 members entitled to vote. A single member, or a small handful under either threshold, cannot compel a motion onto the agenda through this mechanism. A constitution may grant members additional rights beyond this statutory minimum, but absent such a provision, these are the thresholds that actually apply.
Not every resolution members can propose is valid
This is the point most disputes actually turn on. Clearing the notice threshold does not mean every resolution a member proposes must be put to the meeting. Resolutions relating to the appointment or removal of directors, approval of the auditor's appointment, changes to the constitution, and winding up or deregistration of the company can validly be put to a general meeting by members. A constitution generally vests the board with ultimate responsibility for managing the company, and members do not have a general right to direct the board on how it exercises that management power, consistent with the section 198A management authority discussed earlier in this quarter. Subject to any contrary provision in the constitution, a board is therefore not compelled to put a resolution to a general meeting where it genuinely concerns a management matter rather than one of the categories above.
This structure is not an obstruction of member democracy. It is the same governance and management boundary discussed throughout this quarter, applied to the meeting process itself: members hold genuine, enforceable rights over the organisation's fundamental structure and leadership, and the board holds genuine, protected authority over how it is actually run.
Where the disputes actually come from
In practice, disagreements in this space rarely turn on a genuine disagreement about whether a matter is fundamentally structural or purely operational. They turn on process failures: a member's notice technically deficient in form, a threshold the members proposing the resolution did not actually meet, or a board that declines a resolution on management grounds when the underlying issue arguably touches something the constitution does protect. Both sides benefit from taking the technical requirements seriously rather than assuming intent alone is enough. A board that declines a member motion should be able to point precisely to why it falls outside the valid categories, not simply assert that it does. A member proposing a resolution should confirm the threshold and notice requirements are genuinely met before assuming the motion is secured.
- Confirm which threshold applies, the 5 per cent votes test or the 100-member test, before assuming a proposed resolution has cleared the bar.
- Check the proposed resolution against the valid categories, director appointment or removal, auditor approval, constitutional change, winding up, rather than assuming any member-proposed motion must proceed.
- Where a board declines a resolution, document the specific management-matter reasoning in writing, since this is precisely the kind of decision that benefits from the record-keeping discipline discussed elsewhere in this series.
- Check whether your own constitution grants members rights beyond the statutory minimum, since some associations deliberately extend these thresholds and boards need to know which regime actually governs their organisation.
Getting this right protects both sides of the relationship this series keeps returning to. Members retain a genuine, legally enforceable voice over the organisation's fundamental structure and leadership. The board retains the operational authority it needs to actually run the organisation without every management decision becoming a contest at the next general meeting.
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Until next week,
Annie