Company Meetings

Module 4
Meaning and Definition
• Ordinarily, a company may be defined as gathering, assembling or coming
together of two or more persons (by previous notice or by mutual arrangement) for
discussion and transaction of some lawful business.
• A company meeting may be defined as a concurrence or coming together of at
least a quorum of members in order to transact either ordinary or special business
of the company.
• 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.”
• 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 meeting.”
Characteristics of a Company Meeting
• The characteristics of a company meeting are as follows:
1. Two or more persons (who are the members of the Company) must be present
at the meeting.
2. The assembly of persons must be for discussion and transaction of some
lawful business.
3. A notice would be given for convening a meeting.
4. The meeting must be held at a particular place, date and time.
5. The meeting must be held as per provisions/rules of Companies Act.
Kinds/Types of Company Meetings
• The meetings of a company may be classified into the following
categories:
• 1. Meetings of shareholders:
I. Statutory meeting
II. Annual general meeting (AGM)
III. Extra ordinary general meeting
IV. Class meetings.
• 2. Other Meetings:
1. Meetings of board of directors
2. Meetings of creditors
3. Meetings of debenture-holders
Statutory Meeting
• Every public company limited by shares—and every company limited
by guarantee and having a share capital—must, within a period of not
less than one month and not more than six months from the date at
which the company is entitled to commence business, hold a general
meeting of the members which is to be called the Statutory Meeting.
• In this meeting the members are to discuss a report by the Directors,
known as the Statutory Report, which contains particulars relating to
the formation of the company.
• This is the first meeting of the shareholders of a public company and is
held once in the lifetime of any public company
Purpose of Statutory Meeting
• The primary objective of holding the statutory meeting is to inform the
shareholders about the facts relating to the formation of the company,
shares taken up, money received, contracts entered into, preliminary
expenses
• It gives an opportunity to the members to discuss matters relating to
the formation of the company. This enables them to know the position
and future prospects of the company
• This meeting enables the members to meet the directors and they can
satisfy themselves that the money subscribed by them is being
properly used
Statutory Report
• The nature of business conducted at the statutory meeting involves
consideration and adoption of the Statutory Report

• The Statutory Report is drafted by Directors and certified as correct by

at least two of them

• A copy of the report must be sent to every member at least 21 days

before the date of the meeting

• A copy is also to be sent to the Registrar for registration

 Statutory Report must contain the following particulars
(i) The total number of fully paid-up and partly paid-up shares allotted
(ii) The total amount of cash received by the company in respect of the shares
(iii) An abstract of the receipts, classifying them according to source and mentioning
the expenses incurred for commission, brokerage
(iv) The names, addresses and occupations of directors, auditors, managers and sec-
retaries and changes of the names, addresses
(v) Particulars of contracts which are to be submitted to the meeting for approval,
with proposed modifications, if any
(vi) If any underwriting contracts have not been carried out, the reasons for it
(vii) The arrears due on calls from directors and others
(viii) Particulars of commissions and brokerages paid to directors and managers
Annual General Meeting
• The annual general meeting of the company is an important means
through which the shareholders get the opportunity to exercise their
power of control
• The shareholders get an opportunity of reviewing and evaluating the
overall performance of the company during a year
• The shareholders can place their views before the management and
can seek clarifications on matters about which they are not satisfied
• Unlike the statutory meeting which is held only once in the life-time of
the company, the annual general meeting is held every year
• The holding of an annual general meeting is a statutory requirement
Annual General Meeting
• The first Annual General Meeting of a company may be held within a
period of not more than 18 months from the date of its incorporation.
If such a meeting is held within the period, it is not necessary for the
company to hold any annual general meeting in the year of its
incorporation or in the following year
• Not more than 15 months shall elapse between the date of one Annual
General Meeting and the next. The Registrar may, for any special rea-
son, extend the time of holding an Annual General Meeting (other than
the first Annual General Meeting) by a period not exceeding 3 months.
Annual General Meeting

• The notice, by which an Annual General Meeting is called, must

specify it as such

• Every Annual General meeting shall be called during business hours,

on a day which is not a public holiday, at the Registered Office of the
company or at some other place within the town or village where the
Registered Office is situated
Extraordinary General Meeting
• Any general meeting of the company which is not an Annual General
Meeting or a Statutory Meeting is called Extraordinary General
Meeting.
• An Extraordinary General Meeting is held for dealing with some
business of special or extraordinary nature and which is outside the
scope of the Annual General Meeting.
• This meeting is also held to transact some urgent business that cannot
be deferred till the next Annual General Meeting. This meeting may be
called by the Directors or requisitioned by the member’s according to
Sec.169 of the Companies Act, 1956
Extraordinary General Meeting
• Extraordinary General Meeting upon request or requisition made for
it, under the following conditions:
(a) The requisition must be signed by members holding at least 1/10th of the paid- up
capital of the company, in the case of companies having a share-capital; and by
members holding at least 1/10th of the total voting power in other cases.
(b) The requisition must set out the matters which will be considered at the meeting.
(c) The requisition must be deposited at the Registered Office of the company.
The Board must, within 21 days of the receipt of a valid requisition, issue a notice for
the holding of the meeting on a date fixed within 45 days of the receipt of the
requisition. If the Board does not hold the meeting as aforesaid, the requisitionists can
call a meeting to be held on a date fixed within 3 months of the date of requisition.

Resolutions, properly passed at a extra ordinary meeting, are binding on the company
Extraordinary General Meeting

• An extraordinary general meeting ]nay be called by

1. Board of directors on its own motion

2. The board of directors on the requisition of members

3. The requisitionists themselves

4. The company law board

Class Meeting
• These meetings are held by a particular class of shareholders for the purpose
of effecting variation in the Articles in respect of their rights and privileges
or for conversion of one class into another.
• The provision for variation must be contained in the Memorandum or
Articles and this variation must not be prohibited by the terms of issue of
shares of that particular class.
• Such resolutions are to be passed by three-fourth majority of the members
of that class.
Meeting of the Board of Directors
• The management of the company is vested on the Board of Directors.
Therefore, the Directors are to meet frequently to decide both policy and
routine matters.

• The provisions regarding Board Meeting are:

1. Board Meeting must be held once in every three calendar months and at least four
times in every year. This provision may be exempted by the Central Govt.
2. Notice of Board Meeting shall be given in writing to every director for the time being
in India and at his usual address in India.
Meeting of Creditors
• These meetings are called when the company proposes to make a scheme of
arrangement with its creditors. The Court may order a meeting of the creditors or a
class of creditors on the application of the company or of liquidator in case of a
company being wound-up.
• Such a meeting is held and conducted in such a manner as the Court directs. If
arrangement is passed by a majority of three-fourth in value of creditors and the
same is sanctioned by the Court, it is binding on all the creditors.
• These meetings are held when the company has gone into liquidation to ascertain
the total amount due by the company to its creditors.
Meeting of Debenture Holders
• These meeting are called according to the rules and regulations of the Trust
Deed or Debenture Bond.

• Such meetings are held from time to time where the interests of debenture
holders are involved at the time of reorganization, reconstruction,
amalgamation or winding-up of the company.

• The rules regarding the appointment of Chairman, notice of the meeting,

quorum are contained in the Trust Deed.
Requisites of a Valid Meeting
• If the business transacted at a meeting is to be valid and legally binding, the
meeting itself must be validly held. A meeting will be considered to be
validly held, if:
a) It is properly convened by proper authority.
b) Proper notice must be served. (Sec. 101 and Sec. 102 of the Companies Act, 2013)
c) Proper quorum must be present in the meeting. (Sec. 103 of the Companies Act,
2013)
d) Proper chairman must preside the meeting. (Sec. 104 of the Companies Act, 2013)
e) Business must be validly transacted at the meeting.
f) Proper minutes of the meeting must be prepared. (Sec. 118 and 119 of the Companies
Act, 2013)
Requisites of a Valid Meeting

• Proper Authority to Convene Meeting

• A meeting must be convened or called by a proper authority.

• Otherwise it will not be a valid meeting.

• The proper authority to convene general meetings of a company is the Board

of Directors.

• The decision to convene a general meeting and issue notice for the same must
be taken by a resolution passed at a validly held Board meeting.
Requisites of a Valid Meeting
• Notice of Meetings
• A meeting in order to be valid must be convened by a proper notice issued by the
proper authority.
• It means that the notice convening the meeting be properly drafted according to the
Act and the rules, and must be served on all members who are entitled to attend and
vote at the meeting.
• For general meeting of any kind at least 21days notice must be given to members. A
shorter notice for Annual General Meeting will be valid, if all members entitled to
vote give their consent.
• The number of days in each case shall be clear days, i.e. the days must be calculated
excluding the day on which the notice is issued, a day or so for postal transit, and the
day on which the meeting is to he held.
• Every notice of meeting of a company must specify the place and the day and hour of
the meeting, and shall contain a statement of the business to be transacted thereat.
Requisites of a Valid Meeting
• Quorum of Meetings
• Quorum is the minimum number of members who must be present at a
meeting as required by the rules.
• Any business transacted at a meeting without a quorum is invalid. The main
purpose of having a quorum is to avoid decisions being taken at a meeting by a
small minority which may be found to be unacceptable to the vast majority of
members.
• The number constituting a quorum at any company meeting is usually laid
down in the Articles of Association. In the absence of any provision in the
Articles, the provisions as to quorum laid down in the Companies Act, 2013
(under Sec.103) will apply.
Requisites of a Valid Meeting
• Chairman of a Meeting
• ‘Chairman’ is the person who has been designated or elected to preside over
and conduct the proceedings of a meeting. He is the chief authority in the
conduct and control of the meeting.
• Agenda of Meetings: The word ‘agenda’ literally means ‘things to be done’. It
refers to the program of business to be transacted at a meeting. Agenda is
essential for the systematic transaction of the business of a meeting in the
proper order of importance. It is customary for all organizations to send an
agenda along with the notice of a meeting to all members. The business of the
meeting must be conducted in the same order in which the items are placed in
the agenda and the order can be varied only with the consent of the meeting.
Requisites of a Valid Meeting
• Minute: Minute of a meeting contains a fair and correct summary of
the proceedings of a meeting. Minutes must be prepared and signed
within 30 days of the conclusion of the meeting. The minute books of
meetings must be kept at the registered office of the company or at
such other place as may be approved by the board.

• Proxy: The term ‘proxy’ is used to refer to the person who is

nominated by a shareholder to represent him at a general meeting of
the company. It also refers to the instrument through which such a
nominee is named and authorized to attend the meeting.
Quorum for Meetings
• (1) Unless the articles of the company provide for a larger number
• (a) in case of a public company
• (i) five members personally present if the number of members as on the date of meeting is
not more than one thousand
• (ii) fifteen members personally present if the number of members as on the date of
meeting is more than one thousand but up to five thousand
• (iii) thirty members personally present if the number of members as on the date of the
meeting exceeds five thousand
• (b) in the case of a private company, two members personally present, shall be
the quorum for a meeting of the company
Quorum for Meetings
• (2) If the quorum is not present within half-an-hour from the time appointed
for holding a meeting of the company—
• (a) the meeting shall stand adjourned to the same day in the next week at the same
time and place, or to such other date and such other time and place as the Board may
determine; or
• (b) the meeting, if called by requisitionists under section 100, shall stand cancelled:
Provided that in case of an adjourned meeting or of a change of day, time or place of
meeting under clause (a), the company shall give not less than three days notice to the
members either individually or by publishing an advertisement in the newspapers
(one in English and one in vernacular language) which is in circulation at the place
where the registered office of the company is situated.
• (3) If at the adjourned meeting also, a quorum is not present within half-an-
hour from the time appointed for holding meeting, the members present
shall be the quorum.
Quorum for Meetings of Board
• The quorum for a meeting of the Board of Directors of a company
shall be one-third of its total strength or two directors, whichever is
higher, and the participation of the directors by video conferencing or
by other audio visual means shall also be counted for the purposes of
quorum under this sub-section.
• Where a meeting of the Board could not be held for want of quorum,
then, unless the articles of the company otherwise provide, the meeting
shall automatically stand adjourned to the same day at the same time
and place in the next week or if that day is a national holiday, till the
next succeeding day, which is not a national holiday, at the same time
and place.
Proxies
• Any member of a company entitled to attend and vote at a meeting of
the company shall be entitled to appoint another person as a proxy to
attend and vote at the meeting on his behalf
• Provided that a proxy shall not have the right to speak at such meeting and
shall not be entitled to vote except on a poll mentioned in the notice
• Provided also that the Central Government may prescribe a class or classes of
companies whose members shall not be entitled to appoint another person as a
proxy
• Provided also that a person appointed as proxy shall act on behalf of such
member or number of members not exceeding fifty
Voting Rights
• Subject to the provisions of section 43 and sub-section (2) of section 50,
• (a) every member of a company limited by shares and holding equity share capital
therein, shall have a right to vote on every resolution placed before the company
• (b) his voting right on a poll shall be in proportion to his share in the paid-up equity
share capital of the company
• Every member of a company limited by shares and holding any preference
share capital therein shall, in respect of such capital, have a right to vote
only on resolutions placed before the company which directly affect the
rights attached to his preference shares and, any resolution for the winding
up of the company or for the repayment or reduction of its equity or
preference share capital and his voting right on a poll shall be in proportion
to his share in the paid-up preference share capital of the company
Ordinary Resolution

• A resolution shall be an ordinary resolution if the notice required under this

Act has been duly given and it is required to be passed by the votes cast,
whether on a show of hands, or electronically or on a poll, as the case may
be, in favour of the resolution, including the casting vote, if any, of the
Chairman, by members who, being entitled so to do, vote in person, or
where proxies are allowed, by proxy or by postal ballot, exceed the votes, if
any, cast against the resolution by members, so entitled and voting.
Special Resolution
• A resolution shall be a special resolution when—
• (a) the intention to propose the resolution as a special resolution has been duly
specified in the notice calling the general meeting or other intimation given to the
members of the resolution;
• (b) the notice required under this Act has been duly given; and
• (c) the votes cast in favour of the resolution, whether on a show of hands, or
electronically or on a poll, as the case may be, by members who, being entitled so to
do, vote in person or by proxy or by postal ballot, are required to be not less than
three times the number of the votes, if any, cast against the resolution by members so
entitled and voting.
Minutes
• Minutes of proceedings of general meeting, meeting of Board of Directors
and other meeting and resolutions passed by postal ballot.—
• (1) Every company shall cause minutes of the proceedings of every general meeting
of any class of shareholders or creditors, and every resolution passed by postal ballot
and every meeting of its Board of Directors or of every committee of the Board, to be
prepared and signed in such manner as may be prescribed and kept within thirty days
of the conclusion of every such meeting concerned, or passing of resolution by postal
ballot in books kept for that purpose with their pages consecutively numbered.
• (2) The minutes of each meeting shall contain a fair and correct summary of the
proceedings there at.
• (3) All appointments made at any of the meetings aforesaid shall be included in the
minutes of the meeting.
Minutes
• (4) In the case of a meeting of the Board of Directors or of a committee of the Board, the
minutes shall also contain—
• (a) the names of the directors present at the meeting; and
• (b) in the case of each resolution passed at the meeting, the names of the directors, if any, dissenting
from, or not concurring with the resolution.
• (5) There shall not be included in the minutes, any matter which, in the opinion of the
Chairman of the meeting,—
• (a) is or could reasonably be regarded as defamatory of any person; or
• (b) is irrelevant or immaterial to the proceedings; or
• (c) is detrimental to the interests of the company.
• (6) The Chairman shall exercise absolute discretion in regard to the inclusion or non-
inclusion of any matter in the minutes