28.7 WRITTEN NOTICE
At any time before such a special resolution referred to in Section 164(2) is to be voted on a dissenting shareholder may give written notice to the company objecting to the resolution – Also see Section 115(8)(a). Such notice may be given at the meeting itself as long as it is given before the resolution is put to the vote.
The importance of giving the notice of objection must not be overlooked as it is one of the essential pre-requisites for the exercise of an appraisal right. If this notice is not given the appraisal right may be lost. The notice will also give the directors an idea as to where they stand in terms of the transaction that they are doing. If there is a huge amount of dissent from minorities, that may be a sign for the directors to take note. As dissenting minorities are entitled to cash for the fair value of their shares, cash flow considerations must be taking into account. It may also be an indication not to proceed with the transaction and the company may revoke the resolution.
If the company fails to give the shareholders details of their rights or failed to give notice of the meeting then dissenting shareholders do not have to give notices of objections.
Dissenting rights in the event of a fundamental transaction will apparently not extend to shareholders who are precluded from voting on the resolution s 115(4), nor will they extend to shareholders who do not hold any voting rights.
Where such a resolution has been adopted then within 10 business days thereafter the company must send a notice that the resolution has been adopted to each shareholder who gave written notice of objection, and who have not withdrawn that notice or voted in support of the resolution – also see Section(115)(8)(b).
The sections here are Section 164(5) is the main provision. This is reinforced by s 37(8) and s 115(8). Dissenting minority shareholders must comply with each of its requirements, failing which they will automatically lose their appraisal rights.