Company meeting: an overview

A company meeting means two or more individuals coming together to carry out a legitimate business or to
take decisions on the same, like any other group of people flocking together for a particular purpose.

Now, in order to carry out the business of the company properly, it becomes necessary for the directors and
shareholders of companies to meet as often as necessary and to take unanimous decisions based on their
viewpoints and discussions. Simply put, it is crucial for companies to hold meetings for the effective
functioning of the company. These meetings hold great importance in the decision-making process.

Meaning and definition of company meetings

There is no definition of the term “meeting” per se in the Companies Act, 2013; in plain language, a company
can be defined as two or more individuals coming together, gathering, or assembling either by prior notice or
unanimous decision for discussing and carrying out some legitimate activities related to business.

A company meeting can be said to be a concurrence or meeting of a quorum of members to carry out ordinary
or special business and take decisions on important matters of the company.

Need for: company meetings

Before we read about the types of company meetings, let’s take a look at why exactly company meetings are
conducted.

1. Control management function - Company meetings play a crucial role in controlling the management
functions of a company.

2. Control the affairs of the company - In a company, the directors are accountable to the shareholders.
Directors have been entrusted with the duty to run the business and manage the day-to-day affairs of the
company. By holding meetings, the affairs of the company are controlled.

3. Future policies - Through meetings, the past policies and experiences of a company can be discussed, and
new future policies can be fixed. As stated above, directors are answerable to shareholders, so via such
meetings, the shareholders can learn about the affairs of the company. The rights of shareholders include:

[a] Inquiring regarding the affairs of the company,

[b] Criticising the function of the company,
[c] Have effective control on the board.

Important definitions of company meetings

1. In the case of Sharp v. Dawes (1971), a meeting is defined as “an assembly of people for a lawful purpose”
or “the coming together of at least two persons for any lawful purpose.”

2. Further, according to P.K. Ghosh, “any gathering, assembly, or coming together of two or more persons for
the transaction of some lawful business of common concern is called meeting.”

3. Moreover, according to K. Kishore, “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.”
Essence in context with the aforementioned definitions - From the above definitions, we can infer the
following:

1. Number of individuals - In a meeting, there must be two or more individuals. The number of members
attending the meeting may be small, large, or extremely large, depending on the type of meeting.

2. Definite place - There must be a specific place for the meeting. In the case of official meetings, the meeting
must be conducted in the office.

3. Fixed date and time - While conducting a meeting, it is necessary to decide on a date and time. In the case
of official meetings, the date chosen to conduct the meeting is often a working day, and the time is within
office hours.

4. Discussion - There has to be some discussion while conducting the meeting, meaning the individuals in the
meeting must put forth their viewpoints and opinions on the agenda of the meeting.

5. Predetermined topics - Usually, in company meetings, the topics or subject matter of the meeting are already
notified to the participants, so they can come prepared with their viewpoints on the same.

6. Decisions - The decisions for the agenda are generally taken in the meeting itself, as getting to a conclusion
is the main objective of conducting the meeting. The decisions occurring in the meeting are binding on the
members of the company.

General provisions to know about conducting valid company meetings

1. Authority to convene meetings

A meeting must be called by the board of directors of the company in order to be valid. A resolution must be
adopted by the board in order to decide to call a general meeting and give notice of it.

2. Notice
A proper notice must be given by the board of directors in order for a meeting to be conducted lawfully. This
means that such a notice must be as per the provisions of the 2013 Companies Act. Additionally, notice must
be sent to all members who are qualified to attend the meeting and cast votes, mentioning in detail the
meeting’s location, date, time, and a summary of the business to be discussed must all be included.

3. Quorum
A quorum is defined as the minimal number of participants needed to hold a given meeting in accordance with
the Companies Act 2013 and its rules. Any business made during a meeting that doesn’t have a quorum is
regarded to be invalid. The main object of having a quorum is to avoid taking decisions by a small minority
of members that may not be accepted by the vast majority. Every meeting has a different quorum requirement.

4. Agenda
Agenda can be viewed as the list of matters to be discussed during any meeting. An agenda is crucial for
conducting a business meeting in a structured manner and according to a planned order. Every member who
is qualified to attend a meeting gets the agenda as well as a notice of the meeting. The agenda must be followed
exactly, and the order of the agenda discussed in the meeting can only be changed with the appropriate
approval of the members present in the Meeting.

5. Minutes
The minutes of the meetings contain a just and accurate summary of the proceedings of the meeting. The
Minutes must 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.

6. Proxy
A proxy is a person appointed by the 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.

7. Resolutions
Business transactions in company meetings are carried out in the form of resolutions. There are two kinds of
resolutions, namely:
Ordinary resolution, and
Special resolution.

Various Types of Meetings

1. Statutory Meeting
The statutory meeting, mandated for public companies within a specific timeframe post-incorporation, serves
as a crucial avenue for shareholders to gain insights into the company’s financial status, share capital, and
business objectives. It is a pivotal step in ensuring transparency and accountability during the early stages of
company formation.

For example, the General Shareholder Meeting of the case study XYZ Inc., where they report share capital
and financial status to every member of the company.

2. Annual General Meeting (AGM) (Section 96)

The AGM, or annual general meeting, is a crucial event held by both private and public sector companies at
the end of each financial year. It serves as a platform to disclose the company’s financial performance, elect
directors, declare dividends, and address shareholder concerns. The AGM fosters transparency,
communication, and adherence to legal and governance standards.

For example, in the Annual General Meeting of ABC Corporation, shareholders participate in the election of
directors and provide approval for the company’s financial statements. This exemplifies the crucial decision-
making and transparency fostered by AGMs in corporate governance.
T.V. Mathew v. Nadukkara Agro Processing Co. Ltd. (2002)
In this case, the Kerala High Court opined that there is no provision in the law which states that holding the
first AGM of the company can go beyond the set time period, i.e., nine months from the forest financial year
of the company.

3. Extraordinary General Meeting (EGM) (Section 100)

EGMs are convened to address urgent or exceptional issues that cannot wait until the next Annual General
Meeting (AGM). They are characterized by their ability to handle stringent rules and enable quick decision-
making on matters such as mergers, acquisitions, significant rule changes, or other critical issues, ensuring
compliance and timely resolutions.

For Example, An EGM called by PQR Corporation to seek shareholder approval for a significant investment
proposal.

Anantha R. Hedge v. Capt. T.S. Gopala Krishna (1996)

In the case of Anantha R. Hedge v. Capt. T.S. Gopala Krishna (1996), the Karnataka High Court opined that
just because a director refused to conduct an extraordinary general meeting when requisitioned, it would not
amount to an offence under the 2013 Act.

4. Class Meeting
Class meetings are convened by holders of a specific class of shareholders, such as preference shareholders.
These meetings are typically called to discuss proposed changes to the rights of that particular class of shares.
During these meetings, members deliberate on the advantages and disadvantages of the proposal and vote
accordingly. Decisions made in class meetings are only enforceable among the members of the specific class
involved, and only individuals belonging to that class are permitted to participate and cast votes.

For Example, A Class Meeting of the LMN Inc. Preferred Shareholders concerning voting rights and dividend
entitlements.

5. Board of Directors Meeting (Section 173)

The Board of Directors meeting is a formal gathering of board members as stipulated by company law. It
serves as a platform for dialogue on strategic issues, decision-making, and setting the direction for the
organization.

For Example, the monthly Board of Directors Meeting of OPQ Corporation to review financial performance
and strategic initiatives.

Sanjiv Kothari v. Vasant Kumar Chordia (2004)

In the case of Sanjiv Kothari v. Vasant Kumar Chordia (2004), an observation was made that in case a meeting
is convened by the managing director on requisition by the director on the same date to have a discussion on
the same matter that was highlighted by the director, the director has to attend the meeting and should not
have any other arrangement for attending a meeting on the same date at some other place.

6. Committee of Directors Meeting

Committee of Directors meetings are specialized gatherings within the broader framework of board meetings,
focusing on specific areas such as financial reporting, risk assessment, or executive compensation. These
committees, such as the Audit Committee or Compensation Committee, delve deeply into their designated
areas of expertise and ensure alignment among committee members.
For Example, The Audit Committee Meeting of UVW Corporation to review financial statements and internal
control procedures.

7. Debenture Holders Meeting (Section 71)

A Debenture Holders Meeting serves as a platform for debenture holders, who are creditors involved in bond
agreements, repayments, or potential defaults. It facilitates discussions, transparency, and collective decision-
making among debenture owners concerning renegotiation or debt repayment guidelines.

For Example, A Debenture Holders Meeting of RST Corporation on the issue of debt restructuring and
payment details.

8. Creditors Meeting (Section 230)

Creditors Meetings are gatherings held within the context of insolvency or liquidation proceedings, typically
taking place in shelters or liquidation courts. They serve as platforms for discussions regarding debt payments,
asset allocation, and the overall solvency of the business. These meetings enable creditors to decide on
restructuring plans, ensuring transparency and compliance with insolvency regulations.

For Example, A Creditors Meeting in the bankruptcy proceedings of XYZ Corporation to discuss asset
liquidation and debt repayment priorities.

9. Creditors and Contributors Meeting

Creditors and Contributors Meetings are convened in cases of voluntary dissolution or insolvency, providing
a platform for discussions involving both creditors and members of the company (contributors). These
meetings address issues such as asset division, debt repayment, and surplus allocation, aiming to ensure
justice, fairness, transparency, and legality throughout the dissolution process.

For Example, Assets distribution and surplus allocation finalized meeting of ABC Corporation in voluntary
liquidation for creditors & contributors.
Business to be transacted in Different Types of Business
The business transacted at a meeting is listed in the meeting's agenda, which is an ordered list of the
meeting's activities.

1. Features of Statutory Meeting:

 Statutory meetings are mandatory for public companies and are typically held within a specific
timeframe after their incorporation.
 The primary purpose of statutory meetings is to provide shareholders with comprehensive updates on
the company’s financial status, share capital, and strategic objectives.
 Directors are required to prepare statutory reports as part of the meeting process, ensuring compliance
with legal and regulatory obligations.

2. Features of Annual General Meeting:

 Mandatory meeting for public and private corporations yearly.

 Address the variety of issues such as financial reports, appointing directors, paying divider and tackling
shareholder concerns.
 The shareholders can obtain voting rights concerning major decisions.

3. Features of Extraordinary General Meeting:

 EGMs are specifically convened to address urgent or exceptional issues that cannot be postponed until
the next scheduled meeting.
 EGMs have specific notice periods and agenda statements tailored to the urgent matters at hand.
 These meetings cover controversial topics such as mergers, acquisitions, or alterations to the
company’s rules that require immediate attention.

4. Features of Class Meeting:

 Class meetings are tailored for a particular class of shareholders, such as preference shareholders.
 These meetings address matters specific to the class, such as dividend entitlements or voting
preferences.
 Class meetings provide equal representation and decision-making opportunities among different
shareholder classes, ensuring fairness where appropriate.

5. Features of Board of Directors Meeting:

 Board meetings typically occur monthly and serve as a key mechanism for addressing strategic,
administrative, and governance matters.
 These meetings cover policy-making, strategic planning, and oversight of managerial activities.
 Board meetings include directors as well as sometimes advisors and other stakeholders who contribute
to discussions.

6. Features of Committee of Directors Meeting:

 Committee meetings include members of specific board committees, such as the Audit Committee or
Compensation Committee.
  These meetings specialize in areas such as financial reporting, risk identification, and determining
compensation packages for executives.
 Committees are chaired by directors with extensive experience and expertise in the relevant field,
ensuring thorough discussions and informed decision-making.

7. Features of Debenture Holders Meeting:

 These meetings are specifically tailored for debenture holders, who are creditors involved in bond
agreements, repayment schedules, and potential defaults.
 Debenture Holders Meetings typically address matters such as renegotiation of terms, repayment
schedules, potential defaults, and any other issues related to the bond agreements.
 The primary purpose of these meetings is to facilitate transparent discussions and joint decision-
making among debenture holders regarding the management of debt, including restructuring or
repayment guidelines, especially during financial crises or debt arrangements.

8. Features of Creditors Meeting:

 These meetings occur within the framework of insolvency or liquidation inquiries, providing a forum
for addressing debt payment, asset allocation, and the company’s solvency.
 Discussions in Creditors Meetings focus on debt repayment plans, asset liquidation, and other matters
pertinent to the financial health of the business.
 Creditors, including those owed debts by the company, actively participate in Creditors Meetings,
often voting on proposed settlements or restructuring plans.

9. Features of Creditors and Contributors Meeting:

 These meetings are conducted during voluntary dissolution or liquidation proceedings, involving
discussions with both creditors and shareholders (contributors) regarding the company’s dissolution.
 Creditors and Contributors Meetings address concerns related to company dissolution while also
engaging with creditors and shareholders regarding their respective interests in the process.
 Discussions in these meetings encompass issues such as bank liquidation, debt repayment, and the
equitable distribution of surplus funds among stakeholders.