Company Meetings

COMPANY MEETINGS

• A meeting may be generally defined as gathering or assembling or getting together of number of persons for transacting any lawful business

• There must be at least 2 people to constitute a valid meeting

• Company meeting must be convened & held in perfect compliance with companies act

COMPANY MEETINGS

MEETING OF

COMMITTEE

BOARD

BOARD MEETIN

G

SHAREHOLDERS’ MEETIN

G

MEETING OF

DEBENTURE

HOLDERS

MEETING OF

CREDITORS

STATUTORY MEETING

AGM EGM CLASS MEETING

MEETING OF CREDITORS & CONTRIBUTORIES

STATUTORY MEETING

The first meeting of the shareholders of a public company is known as a Statutory meeting

U/S 165 of the Companies Act the following Companies are required to hold a Statutory meeting once in the life time of the Company1.A Public Company with Share Capital2.A Public Company limited by guarantee having Share

Capital

STATUTORY MEETING

Period within which Statutory meeting is held:-

After one month and within 6 months from the date of certificate of commencement of business.

NOTICE

The directors are required to send notice of the meeting to every member of the company at least 21 clear days before the date of the meeting stating that it is the statutory meeting of the company

OBJECT OF THE MEETING

To acquaint shareholders of the progress of the company since incorporation

To discuss matters arising out of promotion & formation of the company

STATUTORY REPORT

Report must be certified as correct by at least 2 directors, one of whom shall be a M.D, where there is one

Report must be certified as correct by the auditors of the company

A copy of this report must be filed with registrar for registration

STATUTORY REPORTA Statutory report must set out

The total number of shares issued, distinguishing shares as fully paid up or partly paid

The total amount of cash received in respect of total shares allotted

The names, addresses & occupation of the company’s directors, auditors, M.D, manager & secretary of the company

The particulars of any contract & modification of any contract to be submitted to the meeting for approval

STATUTORY REPORTA Statutory report must set out

The particulars of any commission or brokerage paid or to be paid to directors and the manager in connection with the sale of shares or debentures of the company

The details of arrears, if any, due from directors , M.D. or manager

The extent to which the underwriting contract has not been carried out and reasons therefore

PROCEEDINGS AT THE MEETING

The Board shall place at the meeting a list showing the names, addresses & occupation of the members of the company and the number of shares held by them respectively

The members present may discuss any matter relating to the formation of the company or arising out of the statutory report but no resolution can be passed unless notice has been given

CONSEQUENCES OF DEFAULT

Default in complying with the provisions shall make every director or other officer of the company liable to a fine of upto five thousand rupees

The Registrar or a contributory may file a petition for the winding up of the company if default is made in delivering the statutory report to the Registrar or in holding the statutory meeting on or after 14 days after the last date on which the statutory meeting ought to have been held.

ANNUAL GENERAL MEETING

Must be held by every type of company, public or private, limited by shares or by guarantee, with or without share capital or unlimited company, once a year.

Every company must in each year hold an annual general meeting.

Not more than 15 months must elapse between two annual general meetings.

ANNUAL GENERAL MEETING

However, a company may hold its first annual general meeting within 18 months from the date of its incorporation

In such a case, it need not hold any annual general meeting in the year of its incorporation as well as in the following year

ANNUAL GENERAL MEETING

The following matters constitute ordinary business at an AGM :-Consideration of annual accounts, director’s report and the auditor’s report

Declaration of dividend Appointment of directors in the place of those retiring

Appointment of and the fixing of the remuneration of the statutory auditors

All other matters and business to be discussed at the AGM are special business.

ANNUAL GENERAL MEETING

If any special business is to be transacted, the notice convening the meeting must contain a statement setting out all facts concerning each such item of business, including the nature and extent of interest of every director or manager in it

ANNUAL GENERAL MEETING

The second AGM shall be held at the earliest of the following dates:- Six months from the close of the financial year.

Within 15 months from the previous AGM Last date of the calendar year

ANNUAL GENERAL MEETING

Time & Place of Meeting (Sec. 166(2) )

AGM must be held at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated

The meeting should be held during business hours on a day which is not a public holiday

ANNUAL GENERAL MEETING Adjourned AGM on a public holiday

The Department of Company Affairs has clarified that there is no contravention of Sec. 166(2) if an adjourned AGM, comes to be accidentally held on a public holiday

Notice

At least 21 days’ written notice must be given to members for calling an AGM

However, such a meeting may be called with shorter notice if it is agreed to by all the members entitled to vote in the meeting

CONSEQUENCES OF DEFAULT

Default in complying with the provisions shall make every director or other officer of the company liable to a fine which may extend to Rs. 50,000

In case of continuing default, with a further fine which may extend to Rs. 2,500 per day

If default is made in holding AGM, any member of the company may apply to NCLT

NCLT may call or direct the calling of the meeting and give such directions for the purpose as it thinks fit

EXTRAORDINARY GENERAL MEETING

All general meetings of the company other than AGM & Statutory meeting are called EGM

These meetings are called in emergencies or on special occasions

EGM is called when it is necessary to transact certain business which cannot be postponed until the next AGM

EXTRAORDINARY GENERAL MEETING

EGM is usually called for such purposes : Alteration of Memorandum & Articles of the

company Increase or decrease of share capital or

reorganisation of capital

CONVENING EXTRAORDINARY GENERAL MEETING

NOTICE The requisite notice for EGM is 21 days

TIME & PLACE OF MEETING EGM may be held anytime, on any day

including a public holiday and at a place other than the registered office of the company or even outside the city

CONVENING EXTRAORDINARY GENERAL MEETING

By Directors By directors on the requisition of shareholders By requisitioning shareholders By NCLT

CLASS MEETINGS

Class meetings are meetings which are held by holders of a particular class of shares, e.g., preference shareholders.

Such meetings are normally called when it is proposed to vary the rights of that particular class of shares

Class meetings are held to pass resolution which will bind only the members of the class concerned, and only members of that class can attend and vote.

CLASS MEETINGS

All provisions pertaining to calling of a general meeting and its conduct apply to class meetings in like manner as they apply with respect to general meetings of the company

MEETING OF THE BOARD OF DIRECTORS

Meetings of the directors are known as Board Meetings

It is the most important as well as the most frequently held meeting of the company

All important matters relating to the company and its policy are discussed and decided upon

MEETING OF THE BOARD OF DIRECTORS

Frequency of Board Meeting

Board meeting must be held once in at least three months

At least four such meetings must be held in one year

Central Govt. may exempt certain companies if they do not have enough work to justify expenditure on quarterly meetings

MEETING OF THE BOARD OF DIRECTORS

Notice of the Board Meeting

The Companies Act does not specify any period of notice for Board meetings

If the Articles provide a definite period of notice, the secretary must ensure the same

In the absence of any provision, a reasonable notice must be given to enable directors to attend the meeting

MEETING OF THE BOARD OF DIRECTORS

Notice of the Board Meeting

Sec 286 provides that the notice should of every meeting must be given in writing to every director for the time being in India and at the usual address in India to every other director

It should state the date, time & place of the meetingUsually a weeks notice is considered sufficient Along with the notice a copy of the agenda is also

sent (not mandatory)

MEETING OF THE BOARD OF DIRECTORS

QUORUM

1/3rd of its total strength or 2, whichever is higher

If a meeting cannot be held for want of quorum, it stands adjourned

Where a meeting was called but could not be held, it shall be counted towards the minimum number of meetings which must be held in one year

If a meeting can not be held for want of quorum, then, unless

The articles so provide, the meeting shall automatically stand adjourned till the same day in the next week, at the same time and place , or if that day is a public holiday till the next succeeding day which is not a public holiday, at the same time and place.

Procedure where meeting is adjourned for want of quorum Sec 288

MEETING OF THE BOARD OF DIRECTORS

CHAIRMAN

Every meeting of the board must have a Chairman to preside over it

The Articles usually name the Chairman who shall preside over the Board Meeting

If the Articles do not name the Chairman, the directors may elect & also determine a period for which he has to hold the office

MEETING OF THE BOARD OF DIRECTORS

CHAIRMAN

If the Chairman is not present within 15 minutes, after the time appointed for holding the meeting, the directors may choose a new chairman out of those present

The Chairman of the Board presides also at general meetings & is referred to as the chairman of the company

MEETING OF THE BOARD OF DIRECTORS

RESOLUTION BY CIRCULATION

Generally decisions are taken by directors by passing resolutions in meetings

But if it is not possible to hold meeting, the Board may pass a resolution by circulation

MEETING OF THE BOARD OF DIRECTORS

RESOLUTION BY CIRCULATION Sec 289

No resolution shall be deemed to have been passed by circulation unless The resolution has been circulated in draft

together with the necessary papers among all directors present in India

The number of directors among whom it is circulated must not be less than the quorum fixed for the board meeting

It has been approved by a majority who are entitled to vote on the resolution

MEETING OF THE BOARD OF DIRECTORS

RESOLUTIONS AT MEETINGS ONLY

Following powers must be exercised by the company only by means of resolution passed at the meeting of the board The power to make calls The power to issue debentures The power to borrow money The power to invest the funds of the company The power to make loans

Contd…..

MEETING OF THE BOARD OF DIRECTORS

RESOLUTIONS AT MEETINGS ONLY

The power to fill up a casual vacancy The power to accord consent to a director to

enter into certain contracts with the company The power to appoint any person as M.D who is

already the M.D or Manager of another company The power to invest in shares & debentures of

another company

MEETING OF THE BOARD OF DIRECTORS

VOTING

Matters discussed at the Board meeting must be decided by a simple majority (unless Articles provide otherwise)

In case of equality of votes the Chairman will have the second or casting vote

However, the Act requires the unanimous consent of all the directors in certain matters

MEETING OF THE BOARD OF DIRECTORS

VALIDITY OF ACTS OF DIRECTORS

Acts committed by a director are valid

No act of the director will be held valid after his appointment has been shown to the company as invalid

MEETING OF DEBENTURE HOLDERS

Such meetings are held in accordance with the rules & regulations that are in trust deed or endorsed on the debenture like Notice Appointment of chairman of meeting Passing the resolutionQuorum etc.

These meetings are called time to time where the interest of the debenture holders are involved. (In case of winding up or amalgamation or reconstruction of a company)

MEETING OF CREDITORS & CONTRIBUTORIES

Such meetings are held when the company has gone into liquidation

these meetings are held to ascertain the total amount due by the

company to its creditors To appoint liquidators to wind up the affairs of

the company or To appoint a committee of inspection

MEETING OF CREDITORS

These meetings are called when the company proposes to make arrangement with its creditors

REQUISITES OF A VALID MEETING

Proper Authority Proper Notice Quorum Chairman Minutes

REQUISITES OF A VALID MEETING

PROPER AUTHORITY

A general meeting of the shareholders of the company may be convened by the following :

By the Board of Directors By Directors on the requisition of shareholders By NCLT

REQUISITES OF A VALID MEETING

NOTICE Notice is an advance intimation of a meeting so

as to give the person receiving it an opportunity to prepare himself for it

LENGTH OF NOTICE

CONTENTS OF NOTICE

ORDINARY BUSINESS SPECIAL BUSINESS

REQUISITES OF A VALID MEETING

PERSON ENTITLED TO NOTICE

MODE OF GIVING NOTICE

OMISSION TO GIVE NOTICE

NOTICE OF AN ADJOURNED MEETING

REQUISITES OF A VALID MEETING

QUORUM

Quorum for general meetingsProxy not to be countedJoint holders as single memberRepresentative as membersOne member cannot constitute a meeting

Exceptions

REQUISITES OF A VALID MEETING

CHAIRMAN APPOINTMENT DUTIES

He must act in the interest of the companyHe must ensure that the meeting is properly

convened He must see that the order is maintained in

meeting He must ensure that the provisions of the Act

& Articles are observedHe must ensure that motions & amendments

are in order & within the scope of the meeting

REQUISITES OF A VALID MEETING

POWERS

To decide on the priority of speakers To expel any unruly member To adjourn the meetingTo demand poll To sign and date the proceedings of the

meeting

REQUISITES OF A VALID MEETING

PROXY

APPOINTMENT OF PROXY & HIS RIGHTS Any member of a company has got the

right to appoint another person as his proxy to attend and vote instead of himself

Unless the Articles otherwise provideNo proxy in case of a company having no

share capitalMember of a pvt company cannot appoint

more that one proxy Proxy cannot vote except on a poll

REQUISITES OF A VALID MEETING

PROXYSTATEMENT IN THE NOTICE INSTRUMENT OF PROXYDEPOSIT OF PROXY INVITATION TO MEMBERS PROHIBITED INSPECTION OF PROXIES BY MEMBERSRELATIONSHIP BETWEEN MEMBERS &

PROXIESREVOCATION OF PROXYPOSITION OF REPRESENTATIVE OF

COMPANIES & GOVT.

VOTINGVoting by show of hands

Position of representatives of companies & government

Chairman’s declaration on show of hands conclusive

Rough & ready method

VOTINGVoting by Poll

Demand for poll

Time of taking poll

RESOLUTIONS KINDS OF RESOLUTIONS

ORDINARYSPECIAL RESOLUTION REQUIRING SPECIAL

NOTICE

ORDINARY RESOLUTION Business transacted by ordinary resolutions

Issue of shares at a discountAdoption of annual accountsAppointment of auditors & fixing their

remunerationAppointment of directors at AGMDeclaration of dividendsIssue of bonus sharesAuthorizing voluntary winding up etc…

Special resolution Business transacted by special resolutions

Alteration of memorandumAlteration of the name of the company with

the approval of Central Govt.Alteration of Articles of AssociationCreation of Reserve capitalReduction of CapitalVariation in the rights of the holders of any

class of shares etc….

ORDINARY RESOLUTION Resolution requiring special notice

For a resolution at an AGM providing that a retiring auditor shall not be appointed

For a resolution for removal of director before the expiry of his term

For a resolution for appointment as auditor of a person other than retiring auditor

The articles of a company may provide additional matters in respect of which special notice is required

MINUTESStatutory Provisions regarding Minutes

Obligation to maintain minutes Numbering of pagesSigning of MinutesFair & correct summaryContents of Minutes of Board meetingsDefamatory & irrelevant matters to be excludedMinutes as evidence of proceedingsLocation & inspection of minute booksPublication of reports