Company Meetings

Course: LLB IISubject : Company Act

Unit: 2

Topic: Company meetingsMeetingsTime and place of holding meetingsPurpose of holding meetingsBusiness transacted at these meetings

Company Meetings• A company being an artificial person expresses its will

or takes its decision through resolutions passed at regularly convened meeting of the general body of the shareholders, and the directors.

• The companies Act provide the shareholders a forum which they can use to appoint directors as well as auditors of their own choice who may safeguard them from the possible manipulation.

• While the board of directors exercise their powers and take decisions through board meetings.

Types of Company Meetings• Members Meetings:

– Statutory Meeting under Section 165;– Annual General Meetings under Section

166;– Extraordinary General Meetings:– Convened by directors suo moto between

two AGMs.– Convened by directors on requisition under

Sec 169.

Kinds of Meetings

Meetings of members (i) Statutory meeting (ii) AGM (iii) EGM Meetings of Directors (i) Meetings of BoD (ii) Meetings of committees of Board Other Meeting (i) Meeting of debenture holdersMeeting of debenture holders (ii) Meeting of creditors(ii) Meeting of creditors

Types of Meetings…• Meetings of the Board of Directors.

• Class Meetings of Shareholders.

• Meetings of the Debenture holders.

• Meetings of the Creditors.

• Meetings of the Contributories in winding up.

1. Statutory Meetings [Section 165]

• Companies limited by guarantee and share shall, within a period of more than 1 month and less than 6 months from the date of commencement of business, hold a general meeting of the members. (1)

• If a statutory meeting is not held, it becomes a ground for winding up of the company through Court u/s 433(b).

• The notice must be given at least 21 clear days before the meeting.

Statutory Meetings [Section 165] (conti)

• The statutory report is required to be sent to each member along with the notice of the meeting. A copy of it should also be sent to the Registrar for registration.

• If default is made in complying with any required of section fine is 5000/-

• No meeting required:

(a) a private company;(b) a public company not having share capital; (c) a public company liability of its members unlimited; (d) a public company limited by guarantee and not having share capital (e) a Government company.

2. Annual General Meeting• Every company, whether public or private, having

a share capital or not, limited or unlimited must hold an Annual General Meeting. (1)

• The first Annual General Meeting of a company may be held within eighteen months from the date of its incorporation.

section 210 provides as follows• (a) There must be one meeting held in each calendar

year.• (b) The gap between two AGMs must not be more

than fifteen months.• (c) Meeting must be held not later than six months

from the close of the financial year.

• The Registrar of Companies is empowered to grant extension of time, for special reasons, up to a maximum period of three months.

• Also a proxy form must be attached to the notice, on which it must be specifically mentioned that a member entitled to vote is entitled to appoint proxy and proxy need not be a member of the company.

• A shorter notice may be held valid if consent is accorded to by all the members entitled to vote at the meeting.

• A copy of the directors’ report and auditors’ report must accompany the notice.

Time and Place of holding AGM

• Every annual general meeting shall be held during business hours and on a day that is not a public holiday

• Further, the meeting shall be held either at the registered office of the company or at some other place within the city, town or village in which registered office of the company is situated.

• Every AGM called after giving 21 days notice must be held on a day other than a public holiday.

• Time of subsequent AGMs may be fixed by the Article or by a resolution in the AGM.

Business Transacted at an AGM [Section 173]

• The business to be transacted at an AGM may comprise of (I) ordinary business (ii) special business

• Ordinary business relates to : • (a) consideration of the accounts, balance sheet and the

reports of the Board of directors and auditors; • (b) the declaration of dividends; • (c) the appointment of directors in place of those retiring ; and• (d) the appointment of auditors and fixation of their

remuneration.

• Any other business scheduled to be transacted at the meeting will be deemed to be special business.

3. EGM [Sec 169]

• Every general meeting of company with exception to Statutory Meeting and AGM is called an EGM.

• Every business at an EGM is a special business, which arises between two AGMs being urgent, and cannot be deferred to the next AGM.

• Usually the Articles contain provisions empowering the board for calling an EGM.

Calling of EGM on Requisition• An EGM may be called :

– (I) by the Board of directors of its, own accord; – (ii) by the directors on requisition of members holding 1/10th of the capital or voting

rights– (iii) by the requisitionists themselves;– (iv) by the Company Law Board

• The requisition shall set the matters for consideration, duly signed and deposited at the registered office of the company.

• If the EGM is not called within 21 days of the requisition the meeting may be called on a day not later than 45 days from the date of deposit of requisition:– By requisitionists themselves; or– By 1/10th of the shareholders or members holding 1/10th of voting

right.

Calling of EGM by CLB [Sec186]

• If, for any reason it is impracticable to call an EGM, the CLB may, either of its own or on an application of any director ort member:

• order a meeting of the company;• and give such ancillary or consequential

directions as the CLB thinks expedient.• A meeting so called shall be deemed to be a

meting of the company duly called, held and conducted.

• The CLB will interfere very sparingly, and only when the application of a meeting is made bona fide in the larger interest of the company.

4. Meeting of Board of Directors

• A meeting of the Board of directors shall be held at least once in every three months and at least four such meetings shall be held in one year.

• As long as four meetings are held in a calendar year, the interval between two meetings may be more than three months.

• Listed companies are required to hold at least four board meetings in a year with a maximum time gap of four months between two meetings. (LA - Clause 49)

• Notice of every meeting of the board shall be given in writing to every director for the time being in India, and at his usual address in India to every director.

Board Meetings…• Failure would make the officer in default punishable

with a fine extending up to Rs 1000.• The notice should contain the time date and place of

meeting. • There is no provision for minimum days for giving

notice. It is generally prescribed by the Articles.• If the notice of the meeting is not given to even one

director the meeting and any resolution passed thereat would be invalid.

• Notice of the adjourned meeting should be given to the directors who did not attend the original meeting.

Board Meetings…

• For sine die adjournment and to transact new business a fresh notice would be required.

• The meeting of the director may be held at any time and place convenient to directors, outside the business hours and even on public holiday unless Articles provides otherwise.

• Good practice demands that the agenda containing business to be transacted is circulated preferably along with the notice at least a week before the date of meeting.

How to conduct meeting?How to conduct meeting?• Written notice to be givenWritten notice to be given• Notice to be issued under the Notice to be issued under the

authority of the companyauthority of the company• In case of failure to give a In case of failure to give a

notice, the persons concerned notice, the persons concerned may be punished with fine and may be punished with fine and the proceedings of the meeting the proceedings of the meeting will be rendered invalid.will be rendered invalid.

ResolutionResolution• A motion when passed is called A motion when passed is called

a resolution.a resolution.• The resolution in the General The resolution in the General

body meetings can be an body meetings can be an ordinary resolution ordinary resolution

( Simple majority) ( Simple majority) andand special special resolution.resolution.

• Special resolution- ( notice of 21 Special resolution- ( notice of 21 days to be given) the notice has days to be given) the notice has to specify the purpose. to specify the purpose. The The number of votes to be cast in number of votes to be cast in favour of thefavour of the resolution is to beresolution is to be three times three times the number vote the number vote cast against. (3)cast against. (3)

Quorum and proxy Quorum and proxy • The minimum members to be present must be according to The minimum members to be present must be according to

the provisions of the law.the provisions of the law.• Public company ( minimum Five) and private company Public company ( minimum Five) and private company

(minimum of 2)(minimum of 2)• The quorum must be those members who are eligible to vote The quorum must be those members who are eligible to vote

in respect of the agenda of the meeting.in respect of the agenda of the meeting.• If the quorum is not present within half an hour from the If the quorum is not present within half an hour from the

appointed time, either the meeting stands dissolved or may be appointed time, either the meeting stands dissolved or may be adjourned in the same day next week or any other as may be adjourned in the same day next week or any other as may be determined by the directorsdetermined by the directors

• A person in case of being incapable to attend a meeting and A person in case of being incapable to attend a meeting and who is eligible to vote may appoint a proxy in writing to attend who is eligible to vote may appoint a proxy in writing to attend the meeting of the member and vote on his or her behalf. The the meeting of the member and vote on his or her behalf. The proxy can only vote and cannot participate in the discussions.proxy can only vote and cannot participate in the discussions.

(4)(4)

references• 1.http://www.mca.gov.in/Ministry/pdf/

Companies_Act_1956_13jun2011.pdf pg 53• 2.http://www.mca.gov.in/Ministry/pdf/

Companies_Act_1956_13jun2011.pdf pg:40• 3.http://www.mca.gov.in/Ministry/pdf/

Companies_Act_1956_13jun2011.pdf pg:57• 4.http://www.mca.gov.in/Ministry/pdf/

Companies_Act_1956_13jun2011.pdf pg:57

Thank You!!!