MEETINGS OF
SHAREHOLDERS AND - Ms. Shtantika Mukherjee
BOARD
MEETINGS AND THEIR
CONDUCT/CONVENING
Company meeting can be defined as “a concurrence or coming together
of at least a quorum of members by previous notice or mutual agreement
for transaction business for a common interest is a meeting.”
General Provisions Related to Proper Conduct and Convening of
Meetings-
Proper authority to convene meetings - Like the board of directors. In a
valid board meeting, the decision to convene a general meeting and issue
notice in this regard must be taken by passing a resolution.
Notice - Such a notice must be duly served on all the members who are
entitled to attend and vote at the meeting. The valid notice of the
company must specifically mention the place, the day, the time, and the
statement of the business to be transacted at the meeting.
Quorum - A quorum is defined as the minimum number of members that
are required to be present as mentioned under the provisions of a
COTD…
Agenda - It can be described as the list of businesses to be transacted while
conducting any meeting. An agenda, along with a notice of the meeting, is
usually sent to all the members who are entitled to attend a meeting.
Minutes - The minutes of the meetings contain a just and accurate summary
of the proceedings of the meeting. Minutes of the meetings have to be
prepared and signed within 30 days of the conclusion of the meeting. Further,
the minutes books must be kept at the registered office of the company or any
place where the board of directors has given their approval.
Proxy - The term ‘proxy’ can be used to refer to a person who is chosen by a
shareholder of a company to represent him at a general meeting of the
company. Further, it also refers to the process through which such an
individual is named and permitted to attend the meeting.
TYPES OF COMPANY
MEETINGS - SHAREHOLDERS
A. Meetings of Shareholders-
1. Annual General Meeting (Sec.96)-
(1) Every company other than a One Person Company shall in each year hold in addition
to any other meetings, a general meeting as its annual general meeting and shall specify
the meeting as such in the notices calling it, and not more than fifteen months shall
elapse between the date of one annual general meeting of a company and that
of the next:
Provided that in case of the first annual general meeting, it shall be held within a period
of nine months from the date of closing of the first financial year of the company and in
any other case, within a period of six months, from the date of closing of the financial year
:
Provided further that if a company holds its first annual general meeting as aforesaid, it
shall not be necessary for the company to hold any annual general meeting in the year of
its incorporation:
Provided also that the Registrar may, for any special reason, extend the time within
COTD…
(2) Every annual general meeting shall be called during business hours, that
is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday and shall
be held either 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
situate:
Provided that annual general meeting of an unlisted company may be held at any
place in India if consent is given in writing or by electronic mode by all the
members in advance:
Provided further that the Central Government may exempt any company from the
provisions of this sub-section subject to such conditions as it may impose.
Provided further that the time, date and place of each annual general meeting are
decided upon before-hand by the Board of Directors having regard to the
directions, if any, given in this regard by the company in its general meeting.
COTD…
Purpose of conducting an AGM:
The main purpose of conducting an AGM is to transact the ordinary business of the company.
Ordinary business includes the following:
1.Consideration of financial statements and reports from the directors and auditors.
2.Making declarations on dividends.
3.Appointing a replacement of director or directors in place of those who have retired.
4.Appointing and setting up the amount of remuneration for the auditors of the company.
5.It also includes annual accounts, crucial reports, and audits.
COTD…
Notice of conducting the AGM (Sec.101)
The company has to send a clear 21 days’ notice to its members to conduct the annual
general meeting. The notice must mention the day, date, and location of the meeting, along
with the hour at which it is decided to be held. The notice should explicitly mention the
business to be conducted at the AGM. A company is obligated to send the AGM notice to the
following:
1.All the members of the company, including the legal representatives of a deceased member
and the assignee of an insolvent member.
2.The statutory auditors of the company.
3.All the directors of the company.
The notice can be sent either by speedpost or registered mail or even through electronic
means like email.
COTD…
2. Extraordinary General Meeting (Sec.100)-
(1) The Board may, whenever it deems fit, call an EGM of the company.
Provided that an EGM of the company, other than of the wholly owned subsidiary of a
company incorporated outside India, shall be held at a place within India.
(2) The Board shall, at the requisition made by,—
(a) in the case of a company having a share capital, such number of members who hold, on
the date of the receipt of the requisition, not less than one-tenth of such of the paid-up share
capital of the company as on that date carries the right of voting;
(b) in the case of a company not having a share capital, such number of members who have,
on the date of receipt of the requisition, not less than one-tenth of the total voting power of
all the members having on the said date a right to vote, call an EGM of the company within
the period specified in sub-section (4).
COTD…
(3) The requisition made under sub-section (2) shall set out the matters for the
consideration of which the meeting is to be called and shall be signed by the
requisitionists and sent to the registered office of the company.
(4) If the Board does not, within twenty-one days from the date of receipt of a
valid requisition in regard to any matter, proceed to call a meeting for the
consideration of that matter on a day not later than forty-five days from the date
of receipt of such requisition, the meeting may be called and held by the
requisitonists themselves within a period of three months from the date of the
requisition.
Thus, an Extraordinary General Meeting (EGM) is a meeting held by a company or
an organization to deliberate upon matters that require the urgent attention of
senior executives, the board of directors, and all shareholders and cannot be
deferred until the next scheduled annual general meeting. The EGM is convened
at an irregular time to address a crisis.
COTD…
3. Class Meetings-
Class meetings, as the name suggests, are meetings conducted for shareholders of the
company that hold a particular class of shares. Such a meeting is conducted to pass a
resolution that is binding only on members of the concerned class. Also, only members
belonging to that particular class of shares have the right to attend and vote at the meeting.
Usually, the voting rules are applicable to class meetings as they govern voting at general
meetings.
Such class meetings can be conducted whenever there is a need to alter or change the rights
or privileges of that class as stated in the articles of association. In order to execute such
changes, it is crucial that these amendments be approved in a separate meeting of the
shareholders and supported by passing a special resolution. Under Section 48 of the
Companies Act, 2013, which talks about variations in shareholders’ rights, class meetings of
the holders of the different classes of shares must be conducted in case there are any
variations.
Similarly, under Section 232, which discusses mergers and amalgamations of companies,
where a scheme of arrangement is proposed, there is a requirement that meetings of several
classes of shareholders and creditors be conducted.
TYPES OF COMPANY
MEETINGS – BOARD
(SEC.173)
(1) Every company shall hold the first meeting of the Board of
Directors within thirty days of the date of its incorporation and thereafter
hold a minimum number of four meetings of its Board of Directors every
year in such a manner that not more than one hundred and twenty
days shall intervene between two consecutive meetings of the Board.
(2) The participation of directors in a meeting of the Board may be either in person
or through video conferencing or other audio visual means, as may be
prescribed, which are capable of recording and recognising the participation of the
directors and of recording and storing the proceedings of such meetings along with
date and time:
(3) A meeting of the Board shall be called by giving not less than seven
days’ notice in writing to every director at his address registered with the
company and such notice shall be sent by hand delivery or by post or by
electronic means.
Provided that a meeting of the Board may be called at shorter notice to transact
COTD…
(4) Every officer of the company whose duty is to give notice under this section
and who fails to do so shall be liable to a penalty of twenty-five thousand rupees.
(5) A One Person Company, small company, dormant company and a private
company (if such private company is a start-up) shall be deemed to have complied
with the provisions of this section if at least one meeting of the Board of Directors
has been conducted in each half of a calendar year and the gap between the two
meetings is not less than ninety days:
Provided that nothing contained in this sub-section and in section 174
shall apply to One person Company in which there is only one director on
its Board of Directors.
Purpose of Holding a Board Meeting- For issuing shares and debentures; For
making calls on shares; For forfeiting the shares; For transferring the shares; For
fixing the rate of dividend; For making decisions of the policies of the company.
POSTAL BALLOT (SEC.110)
AND VIDEO CONFERENCING-
Section 110 allows the companies to pass resolutions (except items of ordinary business and
items where any person has a right to be heard) through postal ballot (which includes
electronic ballot and electronic voting under section 108). In view of the extraordinary
circumstances due to the pandemic caused by COVID-19 prevailing in the country, companies
are requested to take all decisions of urgent nature requiring the approval of members, other
than items of ordinary business or business where any person has a right to be
heard, through the mechanism of postal ballot e-voting.
MATTERS NOT TO BE DEALT WITH IN A MEETING THROUGH VIDEO CONFERENCING -
1.the approval of the annual financial statements;
2.the approval of the Board's report;
3.the approval of the prospectus;
4.the Audit Committee Meetings for consideration of financial statement including
consolidated financial statement if any, to be approved by the board; and
5.the approval of the matter relating to amalgamation, merger, demerger, acquisition and
takeover.
