Corporate Law Meetings
Requisites of a Valid Meeting
The following are the requisites of a valid meeting :
1. A meeting should be convened by proper authority. 2. It must be convened by a proper notice served in the prescribed manner to all persons entitled to receive such notice.
3. It must be convened to transact lawful business as per its agenda.
4. It must be presided by properly elected chairperson.
5. It must have a proper quorum.
6. It must be conducted by following lawful procedure. 7. Proper resolutions must be passed for transacting business of the meeting.
8. The minutes of the proceedings must be properly recorded.
3. It must be convened to transact lawful business as per its agenda.
4. It must be presided by properly elected chairperson.
5. It must have a proper quorum.
6. It must be conducted by following lawful procedure. 7. Proper resolutions must be passed for transacting business of the meeting.
8. The minutes of the proceedings must be properly recorded.
Or
What are the legal provisions for holding of annual
general meeting? What business is transacted at such meeting?
Meaning of Annual General Meeting: Annual General
Meeting is a regular meeting of the members of a company which is hold
annually. This meeting provides an opportunity to the members of the company to
review working of the company and express their views on the management of the
company. The purpose of calling the meeting is to transact the ordinary
business of the company.
Legal
provisions Regarding AGM
Following are some of the important provisions regarding calling and
holding annual general meeting :
(1)
To be held each year : Every company other than a OPC shall in each
year (i.e. calendar year) hold (in addition to any other meetings) a general
meeting as its annual general meeting. The company shall specify in the notice
calling it that the meeting is an annual general meeting. [Section
96(1)]
(2)
Time for holding first AGM : The first annual general meeting of a
company must be held within 9 months from the date of closing of the first
financial year of the company. However, it is not necessary for the company to
hold any annual general meeting in the year of its incorporation.
(3)
Time for subsequent annual general meetings : Every company shall in each of the
subsequent year, hold its AGM within a period of 6 months form the date of
closing of the financial year of the company.
(4)
Gap between two AGMs : The gap (interval) between any two annual
general meetings must not be more than a period of 15 months except where the
Registrar grants the extension. There should be one annual general meeting in every
calendar year. In has been neld that the annual general meeting must be called,
whether or not the annual accounts are ready for consideration at the meeting.
A company is required to hold its annual general meeting even if it did not
function at all in the year.
(5)
Extension of Time : The
time for holding the first annual meeting cannot be extended by the Registrar.
However, the Registrar may (for any special reason) extend the time for holding
any annual general meeting by a period not exceeding 3 months. The company must
hold its AGM within this extended time.
(6)
Authority to convene the Annual General Meeting : The power to convene the Annual General
Meeting vests with the Board of Directors. Individual directors have no such
power. Secretary cannot issue any notice For the Annual General Meeting without
the authority of the Board.
(7)
Time and Day for Meeting : The annual general meeting must be held on
any day which is not a National holiday during business hours, that is, between
9 a.m. and 6 p.m. Here National Holiday means and includes a day declared as
National Holiday by the Central Government.
(8)
Place of the Meeting : Company must call the annual general meeting
either at the registered office ofthe company or at some other place within the
city in which the registered office of the company is situated. [Section
96(2)]
(9)
Notice Requirement : Company must give at least 21 days’ written notice or through
electronic mode to call an annual general meeting of the shareholders. Annual
general meeting may be held with a shorter notice if the consent in writing or
through electronic mode is given by not less than 95% of the members entitled
to vote at the meeting. [Section. 101]
(10)
Statement of the business to be transacted at AGM : Every notice of an
annual general meeting shall contain a statement of the business to be
transacted at such meeting.
The
statement of business to be transacted at an annual general meeting shall
essentially contain the four items of ordinary business. These are as follows :
(i)
The consideration of financial statements and the reports of the Board of
directors and auditors.
(ii) The declaration of dividends.
(iii) The appointment of directors -in place of those who are retiring.
(iv) The appointment arid fixing of the remuneration of auditors of the company.
(ii) The declaration of dividends.
(iii) The appointment of directors -in place of those who are retiring.
(iv) The appointment arid fixing of the remuneration of auditors of the company.
Moreover,
if the company intends to transact any item of special business, those items of
business shall also be described under the head ‘special business’. The special
business should be included in the notice, and an explanatory statement of
material facts as to each of those items shall also be annexed with the notice
of the annual general meeting.
(Il)
Annexure to the notice : Every notice of an annual general meeting
must be accompanied by the following :
(i) A copy of financial statements for the financial year.
(ii) Report of the Board of directors.
(iii) Report of the auditors.
(iv) In case meeting has to consider any item of special business, and explanatory statement of material facts with respect to each item of special business. (v) Proxy instrument in blank.
(vi) Attendance slip in blank.
(i) A copy of financial statements for the financial year.
(ii) Report of the Board of directors.
(iii) Report of the auditors.
(iv) In case meeting has to consider any item of special business, and explanatory statement of material facts with respect to each item of special business. (v) Proxy instrument in blank.
(vi) Attendance slip in blank.
(12)
Default in holding the Annual General Meeting : If default is made in holding an annual
general meeting, the Tribunal may, on the application of any member of the
company, call or direct the calling of the annual general meeting of the
company and give such ancillary or consequential directions as the Tribunal
thinks expedient in relation to the calling, holding and conducting of the meeting.
The directions that may be given include that only if one member of the company
is present in person or by proxy that shall be deemed to constitute the
meeting. [Section 97(1)] A general meeting held in pursuance
of directions of the Tribunal shall be deemed to be an annual general meeting
of the company. [Section 97(2)]
Punishment
: Sometimes default is made in holding an annual general meeting of the
company in accordance with Section 96 or in complying with any directions
(under Section 97) of the Tribunal. In such a case, the company and every
officer of the company who is in default shall be punishable with fine which
may extend to one lakh. In the case of a continuing default they shall be
liable for a further fine which may extend to 5,000 for every day after the
first during which such default continues. [Section 99]
Q.
23. Explain the provisions of Companies Act, 2013 with regard to holding of
Extra-ordinary General Meeting of a company.
Ans.
Extra-Ordinary General Meeting (E.G.M.) : Sometimes, the Board of directors
feels that certain decisions cannot be postponed till the conclusion of the
next annual general meeting. In such a case, the Board of directors may call an
extraordinary general meeting (EGM) and get its approval on the decisions and
grab the business opportunity available to the company. Sometimes, an
extraordinary general meeting is also called on the requisition of members of
the company. The meeting of creditors are also called and held whenever need
arises. Regulation 42 of the Table F provides “all general
meetings other than annual general meetings shall be called extra-ordinary
general meetings.”
It
may be pointed out that the provisions with respect to extraordinary general
meeting do not apply to a OPC (One Person Company). In case of OPC, it is
sufficient, if a resolution to be passed at an extraordinary general meeting,
is communicated by the member to the company and entered in the minutes-book
required to be maintained (under Section 1 1 8) and signed and dated by the
member. Such date shall be deemed to be the date of the meeting for all’ the
purpose under this Act.
Business
of Extraordinary General Meeting
Extraordinary general meetings are called for transacting some special
business that cannot be postponed till the next annual general meeting.
Therefore, ail business that are transacted at such meetings are special
business. Any business other than ordinary business is called specialbusiness.
Examples of some special business are as follows : (1) Alteration of any
of the clauses of the memorandum.
(2) Alteration of the clauses of articles of the company.
(3) Reconstitution of the Board of directors.
(2) Alteration of the clauses of articles of the company.
(3) Reconstitution of the Board of directors.
When
and By Whom EGM may be called
Extraordinary general meeting may be called under the following circumstances
:
(1)
By the Board : When
the directors have to transact some immediate and emergent business for which
they cannot wait till the next annual general meeting, i.e. the board of
directors of a company may call this meeting whenever it thinks the need of it:
(2)
By the Board on the Requisition : The board of directors may also call an
extraordinary general meeting on the requisition of given number of members.
The given number of members is :
(a)
In the case of a company having share capital, member or members holding not
less than 1/10 of the paid up share capital of the company carrying voting
rights regarding the matter of requisition.
(b)
In the case of a company not having share capital, member or members holding at
least 1/10 of the total voting power of all the members regarding that matter.
Matters,
for the consideration of which the meeting is called shall be stated in the
requisition and those matters alone shall be considered at the meeting.
Requisition must be duly signed by the requisitionists and deposited at the
registered office of the company.
Board
of Directors must proceed to call a meeting for the consideration of the
matters notified by the requisitionists within 21 days of the deposit of
requisition at the registered office of the ‘company. The meeting must be held
by the directors on a day not later than 45 days from the date of the deposit
of the requisition. (3) By the Requisitionist: On default of
the directors to call the meeting within 45 dav of deposit of the requisition,
the meeting may be called by the requisitionists themselves within 3 months of
the date of deposit of the requisition. Requisitionists shall not be allowed to
hold the meeting after the expiry of three months from the date of deposit of
the requisition except a meeting which was duly convened within three months of
the requisition but was adjourned to some other day which falls after the
expiry of the said three months.
Requisitionists
shall call the meeting in the same manner as nearly as possible in which
meetings are called by the Board of Directors. Notice of such meeting shall be
given in the same manner as for the regular meetings. If the registered office
is not made available to them, they may hold the meeting anywhere else.
Requisitionists shall be entitled to claim all the expenses of calling the meeting
from the company. The company shall be entitled to indemnify itself and to
deduct the expenses of calling the meeting out of the fees or remuneration of
those directors who were in default. Resolution, properly passed at the meeting
called by the requisitionists, shall be binding upon the company.
(4)
By the Tribunal ; The
Tribunal may also. under certain circumstances call, hold and conduct the
meeting of a company [Section 98]
(a) When it is impracticable to call a meeting of the company in a
manner in which meetings of the company may be called, or
(b)
When it is not possible to hold or conduct the meeting of the company in the
manner prescribed by the Act or the Articles of Association of the company.
Tribunal
may also give directions modifying or supplementing the operation of the provisions
of the Act or the Articles of Association in relation to the calling, holding
or conducting of the meeting. It may also direct the company that even one
member of the company present in person or by proxy shall be deemed to
constitute a meeting.
The
Tribunal may order for the calling, holding and conducting of such a meeting
either (a) of its own motion, or (b) on the application of any director of the
company, or (c) or any member of the company who would be entitled to vote at
the meeting,
Notice
of EGM
Provisions regarding notice of an extraordinary general meeting are the
same as in case of any other general meeting of a company. A brief statement of
these provisions are as follows :
l.
An extraordinary general meeting may be called by giving at least 21 days’
clear notice.
2.
Such a meeting may be called by giving a shorter notice that specified if
consent is given in writing for electronic mode by not less than 95 percent of
the paid-up share capital of-the members entitled to vote at such meeting of
the company.
3.
Notice must be in writing.
4.
It must state the place, day and hour of the meeting. [Section. 101]
5.
It must contain a statement of special business because at an extraordinary
general meeting only special business may be transacted’ [Section. 101]
6. The notice must be accompanied by an explanatory statement Of material
facts with respect to each item of business to be conducted at the I
meeting. [Section. 102]
In
case, an extra-ordinary general meeting is called on the requisition of members, the members’ resolution is
circulated.
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