company meetings as per indian compnay law

8/2/2019 Company Meetings as Per Indian Compnay Law

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Company meetings

Meetings play a very important role in themanagement of a company. In fact all the

important decisions of the company are takenin the meetings only.

The shareholders express their will andexercise their rights in the general meetings

of members. While the board of directors exercise their

powers and take decisions through boardmeetings.


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2.Types of meetings

A. Shareholders Meetings

I) Statutory Meeting.

ii) Annual General Meeting.

iii) Extra Ordinary General Meeting iv) Meetings of a class of Members.


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3.Types of meetings (cont)

B. Directors Meetings

I) Meetings of the Board of Directors.

ii) Meetings of the Committee of Board of Directors.

C. Creditors Meetings

I) Debentures holders Meeting.

ii) Other Creditors Meeting.


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Meetings of a company must be convenedand held in perfect compliance of theapplicable provision of the Companies Act,1956 and rules framed there under.

Every meeting, in order to be valid, must be -

properly convened

properly constituted and properly conducted.

REQUISITES OF A VALID MEETING


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Meetings should be properly convened.

IT MEANS THAT

(a) Meetings should be convened by the

proper authority, namelythe Board of Directors, shareholders or

Company Law Board and

(b) Proper and adequate notice must have

been given to all those entitled to attend.


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Meetings should be properly constituted

a) there must be proper quorum and

b) there must be proper Chairman

Quorum means the minimum number of the members whomust be present at a meeting as required by Law/Rules.

(i) In the absence of any provisions in the articles, the quorum,in respect of general meeting, as five members personallypresent in case of a public company and two memberspersonally present in case of private company.

(ii) Only members present in person in person and not proxies,can be counted for purposes of quorum.


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iv) The quorum for a Board meeting is one- third of its total strength or twodirectors whichever is higher. Interested directors shall not be counted for

the purpose of quorum.Chairman

The articles usually designate the Chairman of the Board of Directors

to preside over the general meetings of the company in addition to

presiding over Board meetings.

A chairman is required to maintain order and decorum at a meeting,

to give ruling on points of order,

to decide priority of speakers,

to maintain relevancy and order in debate, to adjourn a meeting,

to exercise a casting vote in case of tie,

& to ascertain the sense of a meeting and declare the result of voting.


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Meetings should be properly conducted.

Proper rules for ascertaining the sense ofthe meeting,

The rules for discussion and order in

debate mustbe observed. Also, the proceedings should be recorded

properly.

The sense of the meeting may beascertained by show of hands, or by poll.


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9. Resolutions

A resolution refers to the decision of a meeting. Thus,once the motions have been put to the members andthey have voted in favour of it, it becomes aresolution.

With respect to general body meetings, there arethree kinds of resolutions, namely, ordinary, specialand requiring special notice.

An ordinary resolution is a simple majorityresolution, i.e., the votes cast in favour of theresolution, by those present in the meeting are morethan the votes cast against the resolution, if any.


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A special resolution, requires a special majority (3/4th) to

approve the resolution. The votes by the members present

and entitled to vote in favour must be at least be three times

the votes cast against the resolution, if any.

Besides, the notice as per the provisions of the Companies Act must havebeen duly given specifying the intention to propose theresolution as a

special resolution.

A resolution requiring special noticemeans that at leastfourteen days before the meeting, the member proposing to move such aresolution must inform the company.

The company in turn is required to inform all members, of the proposed

resolution, at least seven days before thedate of the meeting. Ifimpracticable, company can advertise in newspapers.


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Statutory meeting Sec.165.

Which companies to hold ?Every company limited by shares and every companylimited by guarantee and having a share capital must hold ageneral meeting, to be called the statutory meeting -

When to be held ? within a period of not less than onemonth and not more than six months from the date thecompany becomes entitled to commence business.

However, the following companies are not required to hold a statutorymeeting :

(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.


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Why It is held ?The members may discuss any matter relating to the formation of the

company or arising out of the statutory report.

Notice of the statutory meeting.The notice must be given at least twenty one clear days before the

meeting.

Statutory report- The statutory report is required to be sent to

each member along with the notice of the meeting. A copy of it shouldalso be sent to the Registrar for registration. S

If default is made in complying with any required of section 165,every director or other officer of the company who is in default shall bepunishable with fine which may extend to five hundred rupees.

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


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Annual General Meeting (Sec 166, 210)

Which companies to hold ?Every company, whether public or private, having a

share capital or not, limited or unlimited must hold an

Annual General Meeting.

When to Hold ?

The first Annual General Meeting of a company may be

held within eighteen months from the date of itsincorporation.


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AGM

In respect of subsequent AGMs, section 166 read withsection 210 provides as follows :

(a) There must be one meeting held in each calendaryear.

(b) The gap between two AGMs must not be more thanfifteen months.

(c) Meeting must be held not later than six months fromthe close of the financial year.

The Registrar of Companies is empowered to grantextension of time, for special reasons, up to a maximumperiod of three months.


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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 thecompany or at some other place

within the city, town or village in which registered office

of the company is situated.

The business to be transacted at an AGM may

comprise of (I) ordinary business (ii) special business.


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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.


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The notice of the meeting must be given to every personentitled thereto at least twenty one clear days before the

date of the meeting. A shorter notice may be held valid if consent is

accorded to by all themembers entitled to vote at themeeting.

A copy of the directors report and auditors report must

accompany the notice.


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

The notice must contain a statement of the business to betransacted thereat.

It default is made inholding an AGM in accordance withthe provisions of the Act, the Company Law Board / NCLTmay, on the application of any member of the company,call or direct the calling of a general meeting of thecompany and give such directions as it thinks fit including

direction that one member of the company present inperson or by proxy shall be deemed to constitute a valid

meeting


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EXTRA ORDINARY GENERAL MEETING(EGM)

All general meetings other than the statutory and annualgeneral meeting shall be called as extraordinary generalmeetings.

All business transacted at such meetings is calledspecial business and therefore, every item on theagenda must be accompanied by an explanatorystatement in terms of section 173.


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An EGM may be called :

(I) by the Board of directors of its, own accord;

(ii) by the directors on requisition; (iii) by the requisitionists themselves;

(iv) by the Company Law Board / NCLT.

On a valid requisition being made as per section 169,the Board of directors are under an obligation toconvene the meeting within forty five days of thereceipt of the valid requisition.

In case, the Board of directors fails to call the meetingas aforesaid, the requisitionists or such majority ofthem as spelt out under section 169 may call and holdthe meeting within three months of the date of therequisition.

company meetings as per indian compnay law

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