A summary of the legal rights and duties as a shareholder of the Exeter Golf and Country Club
NOTES FOR NEW AND EXISTING SHAREHOLDERS
DEFINED TERMS
Within these notes, where we refer to the Company, we mean The Exeter Golf & Country Club Limited (a private company limited by shares that is registered at Companies House with Company Number 00228045), and where we refer to the Club, we mean the sports and social club known as Exeter Golf and Country Club. References to Members are to the members of the Club and references to Shareholders are to the registered holders of shares in the Company.
INTRODUCTION AND BACKGROUND
This note is a summary of the current Articles of Association of the Company adopted on 9 November 2019 (Current Articles). Articles of Association set out the rules about the governance and operation of the Company. They are an agreement between the shareholders and directors of the Company about the way in which the Company should be run. A full copy of the Current Articles can be found online on the Club’s website and at Companies House. The Current Articles are supplemented by the Rules and Bye Laws of the Club.
The Company was incorporated in 1928. At its incorporation, the Company had five Shareholders. The number of Shareholders increased soon after the incorporation of the Company as the original Shareholders needed to raise £40,000 to develop the golf course. In 1995, the structure evolved again and the Company became a members’ club, with every Member owning a part of the Company. The rationale behind the constitutional change in 1995 was driven, in the main, by a desire of the shareholders to give control and management of the company to club members and new Articles of Association of the Company were then adopted by the Shareholders to reflect the new structure.
The social and recreational objectives of the Club are carried out through the Company and the Club and the Company co-exist alongside one another.
It is important that Members and Shareholders understand the interaction between the Club and the Company and the terms upon which they hold shares in the Company, including, in particular, their duty to transfer their shares if and when they decide to terminate their membership of the Club.
SUMMARY
The following is a summary of the relevant parts of the Current Articles and the Club’s Rules and Bye Laws that we wish to draw to your attention:
1. Club Members must be Shareholders in the Company. For this reason, 20 shares are purchased by new Members when they join the Club so that they become a Shareholder in the Company at the same time as becoming a Member of the Club.
2. Shareholders do not receive a dividend, however 5p per share is credited towards annual membership .
3. When a person ceases to be a Member of the Club, for whatever reason including death, they (or their estate) must sell or hand-back their shares in the Company so that they are no longer a Shareholder.
4. Sales of shares between Shareholders are permitted provided the person purchasing the shares is a current Club Member. A single Club Member can hold no more than 5,000 shares in the Company at any one time. If you wish to sell or purchase shares in the Company, please let the Club Secretary know so that we can offer you some assistance (if required) and so that we can accurately record the share transfer (and update the Company’s Statutory Registers).
5. Upon ceasing to be a Member of the Club, you are required to give a notice (Transfer Notice) to the Company (marked for the attention of the Club Secretary) notifying us that you are no longer a Member of the Club and confirming the number of shares that you hold in the Company. If you do not provide the Company with a Transfer Notice within one month of your membership in the Club coming to an end, you are deemed to have served a Transfer Notice in respect of all shares held by you.
6. Upon receipt of a Transfer Notice (or deemed receipt), the Company has five years to find a willing buyer (who is a Shareholder and Member (or new Member as the case may be)) for all or some of your shares. In practice, where the Transfer Notice is for the 20 shares purchased on joining, we will arrange to resell those shares to a new and incoming Member.
7. If, when you leave the Club, you own more than 20 shares, the Club Secretary will place you on a rolling list of Shareholders that want to sell their shares and we will endeavour to find a buyer as quickly as possible.
8. When a buyer is found who wishes to buy your shares, you will be informed as soon as possible and will, upon receiving the amount due to you for your shares, be bound to sell them.
9. If no buyer can be found within five years of the Company being served (or deemed served) with a Transfer Notice, the Company has the right (but not the obligation) to buy back some or all of your shares.
10. If no buyer is found within five years and the Company declines or is unable to purchase your shares within 6 months of becoming entitled to do so, the Company may convert these shares into deferred shares.
11. It is important to note that, as soon as you cease to be a Member of the Club, you no longer have any right to receive notice of or attend and vote at a general meeting of the Company (irrespective of whether or not you are still a Shareholder).
It should be noted that this note is intended as a short summary. This note does not purport to be exhaustive and does not constitute legal advice. You should review the Current Articles and Rules and Bye Laws of the Club in its entirety.