Meetings
• A meeting is generally
defined as ‘’a gathering or assembly or getting together of a number of persons
for transacting any lawful business’’.
• There must be atleast
two persons to constitute a meeting.
• Therefore, one shareholder
usually cannot constitute a company meeting even if he holds proxies for other
shareholders.
Introduction to Meeting
• The company expresses
its will or takes its decisions through resolutions passed at validly held
Meetings.
• The primary purpose of
a Meeting is to ensure that a company gives reasonable and fair opportunity to
those entitled to participate in the Meeting to take decisions as per the
prescribed procedures.
• General Meetings of the
Members provide a platform to express their will in regard to the management of
the affairs of the company.
Requisites of a Valid
Meeting
• Proper Authority – The
proper authority to convene a general meeting of a company is Board of
Directors who should pass a resolution to call the meeting, at a duly convened
Board Meeting.
• Notice of Meeting –
Proper notice of the meeting should be given to the members by giving at least
21 days notice in writing to the members. It is a legal communication about the
day, date, time and venue of the meeting. There should be 21 days clear notice
to hold a meeting. Agenda must be served. Agenda refers to the business to be
transacted and the matters to be discussed at the meeting. Usually, the agenda
is built into the notice itself.
• Chairman of Meetings –
A Chairman is necessary to conduct a meeting.
• Quorum of Meetings – The quorum is generally fixed by the Articles. Quorum means the minimum number of members who must be present in order to constitute a meeting and transact business. If the quorum is not present, there is no meeting and the proceedings held are invalid. For example-Valid Quorum for a Public Company ─ 5 members personally present if the number of members as on the date of meeting is not more than 1000; ─ 15 members personally present if the number of members as on the date of meeting is more than 1000 but up to 5000; ─ 30 members personally present if the number of members as on the date of the meeting exceeds 5000. PrivateCompany ─ 2 members personally present, shall be the quorum for a meeting of the company
· Proxy – Where a member is not able to
personally attend a meeting, he can depute another person to attend the meeting
on his behalf.
• Minutes of Meeting – Every company must keep a record of all proceedings of every meeting.
Types of Resolutions
1. Members Resolutions
• Sec 282 – Ordinary
Resolutions (OR) – Resolution passed by a simple majority of the members of the
company. A written resolution is passed by the simple majority of the total
voting rights of eligible members of the company.
• Sec 283 – Special
Resolutions (SR)– Resolution passed by a majority of not less than 75% of the total
voting rights of eligible members of the company. It is passed as special
resolution as it is for a specific reason and purpose suggested by members of
the company.
2. Directors Resolutions
• Collective Decision
making – A general rule about decision making by directors is that any decision
of the directors must be a majority decision at a meeting.
Types of Company Meetings
1. Meetings of the
Shareholders.
2. Meetings of the Board
of Directors and their Committees.
3. Meetings of the
Debenture Holders.
4. Meetings of the
Creditors.
Meetings of Share Holders (General Meetings)
1. Statutory Meeting
This is the first meeting
of the shareholders conducted after the commencement of the business of a
public company. Companies Act provides that every public company limited by
shares or limited by guarantee and having a share capital should hold a meeting
of the shareholders within 6 months but not earlier than one month from the
date of commencement of business of the company.
Usually, the statutory
meeting is the first general meeting of the company. It is conducted only once
in the lifetime of the company. A private company or a public company having no
share capital need not conduct a statutory meeting.
2. (a) Annual General
Meetings (AGM) – It is an important annual event where members get an
opportunity to discuss the activities of the company. Section 96 provides that
every company, other than a one person company is required to hold an annual
general meeting every year.
Three Major Rules (Sec
96)
* First AGM should be
held within nine months from the end of financial year.(31 March)
* Subsequent meetings
must be within six months of the end of relevant financial year.
* Maximum gap, fifteen
months from the end of last AGM.
For example. If a company is incorporated on 1 Oct 2017, its financial year ends on 31 March 2018. Its first AGM must be held within 9 months so it must be held upto 31 Dec 2018.
(b) Extraordinary General
Meetings (EGM) – All general meetings other than annual general meetings are
called extraordinary general meetings. All business items that can be
transacted at the extraordinary general meetings are special business.
* Every general meeting
other than AGM is EGM
* Conduct to decide the
matters which cannot be postponed to next year.
* Thus any GM between two
AGM is EGM
* Every business
transacted in EGM is a special business.
(c) Class Meetings – They
are meetings which are held by holders of a particular class of shares,
example, preference shareholders. Such meetings are called when it is proposed
to change the rights of that particular class of shares.
Board Meeting (Sec-173)
- · In
one calendar year, there must be four meetings.
- ·
Maximum gap between two
meetings will be 120 days.
- ·
In OPC/Small/Sec 8 -> One meeting
within every six calendar months, gap should not be less than 90 days.
- ·
Adjourned meetings because of less quorum will
be counted as meeting.
- ·
Quorum should be present throughout the
meeting, one third of total strength or 2 whichever is higher.
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