Company meetings

Meetings play a very important role in the management of a company. In fact all the important decisions of the company are taken in the meetings only. The shareholders express their will and exercise their rights in the general meetings of members. While the board of directors exercise their powers and take decisions through board meetings.

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.

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.

REQUISITES OF A VALID MEETING

Meetings of a company must be convened and held in perfect compliance of the applicable 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.

Meetings should be properly convened.

IT MEANS THAT

(a) Meetings should be convened by the proper authority, namely the Board of Directors, shareholders or Company Law Board and

(b) Proper and adequate notice must have been given to all those entitled to attend.

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 who must 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 personally present in case of a public company and two members personally present in case of private company. (ii) Only members present in person in person and not proxies, can be counted for purposes of quorum.

 iv) The quorum for a Board meeting is one- third of its total strength or two directors 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.

Meetings should be properly conducted.

Proper rules for ascertaining the sense of the meeting, The rules for discussion and order in debate must be observed. Also, the proceedings should be recorded properly. The sense of the meeting may be ascertained by show of hands, or by poll.

9. Resolutions
A resolution refers to the decision of a meeting. Thus, once the motions have been put to the members and they have voted in favour of it, it becomes a resolution. With respect to general body meetings, there are three kinds of resolutions, namely, ordinary, special and requiring special notice. An ordinary resolution is a simple majority resolution, i.e., the votes cast in favour of the resolution, by those present in the meeting are more than the votes cast against the resolution, if any.

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 have
been duly given specifying the intention to propose the resolution as a special resolution.

A resolution requiring special notice means that at least

fourteen days before the meeting, the member proposing to move such a resolution must inform the company. The company in turn is required to inform all members, of the proposed resolution, at least seven days before the date of the meeting. If impracticable, company can advertise in newspapers.

Statutory meeting Sec.165.

Which companies to hold ? Every company limited by shares and every company limited by guarantee and having a share capital must hold a general meeting, to be called the statutory meeting When to be held ? within a period of not less than one month and not more than six months from the date the company becomes entitled to commence business.
However, the following companies are not required to hold a statutory meeting : (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.

 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 should also 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 be punishable with fine which may extend to five hundred rupees. If a statutory meeting is not held,it becomes a ground for winding up of the company through Court u/s 433(b).

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 its incorporation.

AGM
In respect of subsequent AGMs, section 166 read with 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.

 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.

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.

 The notice of the meeting must be given to every person entitled 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 the members entitled to vote at the meeting. A copy of the directors report and auditors report must accompany the notice.

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

It default is made in holding an AGM in accordance with the provisions of the Act, the Company Law Board / NCLT may, on the application of any member of the company, call or direct the calling of a general meeting of the company and give such directions as it thinks fit including direction that one member of the company present in person or by proxy shall be deemed to constitute a valid meeting

EXTRA ORDINARY GENERAL MEETING(EGM)

All general meetings other than the statutory and annual general meeting shall be called as extraordinary general meetings.
All business transacted at such meetings is called special business and therefore, every item on the agenda must be accompanied by an explanatory statement in terms of section 173.

 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 to convene the meeting within forty five days of the receipt of the valid requisition. In case, the Board of directors fails to call the meeting as aforesaid, the requisitionists or such majority of them as spelt out under section 169 may call and hold the meeting within three months of the date of the requisition.