Company Meetings | Essentials | Kinds of Company Meetings

What is a Meeting?

In common parlance, the word meeting means an act of coming face to

face, coming in company or coming together.

Company meeting - Essentials, Kinds

The Oxford Dictionary defines a meeting as

An assembly of number of people for entertainment, discussion or the

like.

A meeting therefore, can be defined as a lawful association, or assembly

of two or more persons by previous notice for transacting some business.
The meeting must be validly summoned and convened. Such gatherings
of the members of companies are known as company meetings.

Essentials of Company Meetings

The essential requirements of a company meeting can be summed up as

follows:

1. Two or More Persons: To constitute a valid meeting, there must be two

or more persons. However, the articles of association may provide for a
larger number of persons to constitute a valid quorum.

2. Lawful Assembly: The gathering must be for conducting a lawful

business. An unlawful assembly shall not be a meeting in the eye of law.
3. Previous Notice: Previous notice is a condition precedent for a valid
meeting. A meeting, which is purely accidental and not summoned after a
due notice, is not at all a valid meeting in the eye of law.

4. To Transact a Business: The purpose of the meeting is to transact a

business. If the meeting has no definite object or summoned without any
predetermined object, it is not a valid meeting. Some business should be
transacted in the meeting but no decision need be arrived in such
meeting.

Company Meetings: 4 Types of Company Meetings

Company Meetings4 types of company meetings are;

Statutory meeting,

Annual general meeting,

Extraordinary general meeting,

Class meetings.

Statutory Meeting

Every company limited by shares and every company limited by

guarantee and having a share capital shall, within not less than one
month and not more than six months from the date at which the
company is entitled to commence a business, hold a general meeting of
the members of the company.

This meeting is called the ‘statutory meeting.’ This is the first meeting of
the shareholders of a public company and is held only once in the lifetime
of a company.
Statutory report: The Board of directors shall, at least 21 days (based on
Companies Act) before the day on which the meeting is to be held,
forward a report, called the ‘statutory report,’ to every member of the
company.

Procedure at the meeting;

List of members,

Discussion of matters relating to a formational aspect,

Adjournment.

Objects of the meeting and report;

To put the members of the company in possession of all the important

facts relating to the company.

To provide the members an opportunity of meeting and discussing the

management, methods, and prospects of the company.

To approve the modification of the terms of any contract named in the

prospectus.

Annual General Meeting

Company to hold an annual general meeting every year. Every 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 notice calling it.

There shall not be more than 15 months between one annual general
meeting and the other. But the first annual general meeting should be
held within 18 months from the date of its incorporation.
The Registrar may, for any special reason, extend the time for holding an
annual general meeting by a period not exceeding 3 months. But no
extension of time is granted for holding the first annual general meeting.

Every annual general meeting shall be called during business hours on a

day that is not a public holiday.

It 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 situated.

As regards holding of the annual general meeting, no distinction is made

between a public company and a private company.

A general meeting of a company may be called by giving not less than 21

days’ notice in writing.

Annual general meeting a statutory requirement: The annual general

meeting of a company is a statutory requirement. It has to be called even
where the company did not function during the year.

Canceling or postponing of convened meeting: Where an annual general

meeting is convened for a particular date, and notice is issued to the
members, the Board of directors can cancel or postpone the holding of
the meeting on that date provided power is exercised for bona fide and
proper reasons.

Canceling of failure to hold an annual general meeting: If a company fails

to hold an annual general meeting:

Any member can apply to the Company Law Board for calling the
meeting.
The company and every officer who is in default shall be punishable with
a fine.

Powers of Company Law Board to call an annual general meeting: If a

company makes the default in holding an annual general meeting, any
member of the company may apply to the Company Law Board for calling
such a meeting.

Penalty for default: If a company makes the default is holding a meeting

by Company Law or in complying with any direction of the Company Law
Board is calling a meeting, the company, and every officer of the company
who is in default, shall be punishable with fine.

Extraordinary General Meeting

A statutory meeting and an annual general meeting of a company are

called ordinary meetings.

Any meeting other than these meetings is called an extraordinary general

meeting. It is called for transacting some urgent or special business which
cannot be postponed till the next annual general meeting.

It may be convened. (1) By the Board of directors On its own or on the

requisition of the members; or (2) by the requisitionists themselves on
the failure of the Board of directors to call the meeting.

The extraordinary meeting convened by the Board of directors. The Board

of directors may call an extraordinary general meeting:

On its own.

On the requisition of the members.

An extraordinary meeting convened by the requisitionists Power of
Company Law Board to order meeting: If for any reason it is impracticable
for a company to call, hold or conduct an extraordinary general meeting,
the Company Law Board may call an extraordinary meeting.

4. Class Meetings

Class meetings are those meetings, which are held by the shareholders of
a particular class of shares e.g. preference shareholders or debenture
holders.

Class meetings are generally conducted when it is proposed to alter, vary

or affect the rights of a particular class of shareholders. Thus, for effecting
such changes it is necessary that a separate meeting of the holders of
those shares is to be held and the matter is to be approved at the
meeting by a special resolution.

For example, for cancelling the arrears of dividends on cumulative

preference shares, it is necessary to call for a meeting of such
shareholders and pass a resolution as required by Companies Act. In case
of such a class meeting, the holders of other class of shares have no right
to attend and vote.

2. Meetings of the Directors

Meetings of directors are called Board Meetings. These are the most
important as well as the most frequently held meetings of the company.
It is only at these meetings that all important matters relating to the
company and its policies are discussed and decided upon.

Since the administration of the company lies in the hands of the Board, it
should meet frequently for the proper conduct of the business of the
company. The Companies Act therefore gives wide discretion to the
directors to frame rules and regulations regarding the holding and
conduct of Board meetings.

The directors of most companies frame rules concerning how, where and
when they shall meet and how their meetings would be regulated. These
rules are commonly known as Standing Orders.

3. Meetings of Debenture Holders

The debenture holders of a particular class conduct these meeting. They

are generally conducted when the company wants to vary the terms of
security or to modify their rights or to vary the rate of interest payable
etc. Rules and Regulations regarding the holding of the meetings of the
debenture holders are either entered in the Trust Deed or endorsed on
the Debenture Bond so that they are binding upon the holders of
debentures and upon the company.

4. Meetings of the Creditors

Strictly speaking, these are not meetings of a company. They are held
when the company proposes to make a scheme of arrangements with its
creditors. Companies like individuals may sometimes find it necessary to
compromise or make some arrangements with their creditors, In these
circumstances, a meeting of the creditors is necessary.

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)

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.

A meeting in order to be valid, must be convened by a proper notice

issued by the proper authority.

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.

Length Of Notice:
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 giving 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 be held.

Contents Of Notice:

Every notice of meeting of a company must specify the place , the day
and hour of the meeting, and shall contain a statement of the business to
be transacted thereat.

1. Place of Meeting: Every annual general meeting of a company must be

held either at the registered office of the company or at some other place
within the same city, town or village in which the registered office of the
company is situated.

2. Day of Meeting: Every annual general meeting of a company must be

held on a day that is not a public holiday.

3. Time of the Meeting: Every annual general meeting shall be called for a
time during the business hours of the company.

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. Sec. 103 of Companies
Act provides that the quorum for general meetings of shareholders shall
be five members personally present in case of a public company if the
number of members as on the date of meeting is upto 1000, 15 quorum if
number of members as on the date of meeting is more than 1000 but
upto 5000 and if number of member exceeds 5000 than 30 quorum is
required; and two members personally present for any private company
or articles may provide otherwise.

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.

A chairman is usually a member of the body over which he is to preside.

He may be either appointed or designated before hand as chairman by
the rules or elected at the meeting itself according to rules. In the case of
a company, the Articles usually designate the Chairman of the Board of
Directors to preside over the general meetings of the company. Where
the rules do not designate a chairman or the designated chairman is
absent at the commencement of the meeting, the meeting itself elects a
pro tem (temporary) chairman to preside over the meeting.

Powers And Duties Of The Chairman

Powers:

To maintain order and decorum.

To decide points of order.

To decide priority of speakers.

To maintain relevancy and order in debate.

To adjourn a meeting.

To exercise a casting vote.

To ascertain the sense of a meeting and declare the result of

voting.

Duties:

To see that the meeting is properly convened and duly constituted.

To see that the proceedings of the meeting are conducted

according to rules

To see that no discussion is allowed unless there is a specific

motion.

To maintain order and decorum in the meeting.

To see that all members, including the minority, get equal

opportunity to express their views.

To see that the sense of the meeting is properly ascertained on

each and every motion.

He should see that the poll is taken properly according to the

provisions of the Act.
 He must exercise his casting vote bona fide in the interest of the
company.

He must exercise correctly his power of adjournment

Agenda of Meetings: The word ‘agenda’ literally means ‘things to be

done’. It refers to the programme 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 organisations 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.

Minutes: Minutes 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 authorised to attend the meeting.
Notice Of Meetings - Meetings And Resolutions