COMPANY MEETINGS

What is the purpose of meetings?

The very purpose of conducting meetings is to discuss about a particular issue and pass resolution that a task would be carried out.

In the Company form of organization, the members are the Investors who have invested their money in order to obtain a return. Being owners of the company, the members have a right to be informed about the activities of the company.

The statute (Companies Act, 1956) has mandated to get the approval of the members in certain vital issues of the company. For such a purpose, Member’s meetings are conducted.

Kinds of meetings as per Company Law

Board meeting:

The provisions relating to meetings of the directors are given under Section 285 to 290. The board should meet atleast once in every 3 months and 4 such meetings must be held in every year. The Board meeting can be conducted on any day and on any place as per the convenience of the Board.

Procedure:

• Notice of the Board meeting along with the Agenda must be given to directors who are present in India.
• The quorum for the board meeting is 1/3^rd of the board of directors or 2 directors whichever is higher. Interested directors should not be counted for the purpose of quorum. (Interested Director means a director who is in any way related to the contract or arrangement to be entered by the company in that meeting. i.e., who will be benefitted directly or indirectly through such arrangement)
• Board resolutions are of two types. Simple majority resolution (51% favoring the resolution). Unanimous resolution (100% favoring the resolution).

Circular resolution:

The board of directors can pass resolutions without convening physical meetings. In such case circular resolutions can be passed. For the purpose of passing circular resolution, the copy of the resolution must be forwarded to the directors and their approval is received.

The act restricts the passing of circular resolutions in certain circumstances as mentioned in Section 292 and for other important business.

[1]Video conference Board Meeting:

When it is not possible for the directors to attend the meeting physically, the same can be conducted through video conference.

 General meeting:

General meeting refers to Meeting of Shareholders or Creditors or any class of them.

Types of General Meetings

Statutory Meeting: 

It is the first meeting of members to be conducted within a period of one to six months from the date of commencement of business of a public company with or without share capital.

The board of the company should forward a Statutory Report to the members of the company before 21 days of the meeting. The Report should set out all details relating to 

• shares alloted, amount of cash received by the company, 
• an abstract of receipts and payments made by the company,
•  Names ,address and other details relating to directors and other officers and auditors of the company.
• particulars of any contract, which requires approval of the members.

Annual General Meeting:

The Annual General Meeting of a company is convened to get the members /investors know about the progress made by the company. It is an opportunity to know how their invested funds have been utilized by the company.

The Annual General Meeting (AGM) of a company must be held within 6 months from end of the financial year. The first AGM of a company must be held within 18 months of incorporation or 9 months from the closure of the Annual accounts whichever is earlier. The Annual General Meeting of the company must be conducted during the business hours and can be conducted on any day other than a  public holiday.

Procedure:

• Notice of the meeting must be sent to the members 21 days before the annual general meeting.
• The notice should specify the business to be conducted and discussed at the meeting. The venue, date and timings of the meeting must be specified clearly. 
• Ordinary Business: Adoption of Annual accounts, Declaration of Dividend, Appointment of director in place of those retiring, Appointment and fixation of remuneration of auditors. 
• All other transactions to be discussed are special business. Special business requires a statement setting out the materiel facts to be annexed to the notice of the meeting.
• The Articles of the company may specify the quorum for the general meetings. If nothing is mentioned in the AOA, the Quorum for the meeting must be 5 members personally present in case of a public company and 2 members in case of any other company.

Extra-ordinary General Meeting:
A general meeting which is conducted in between two annual general meetings in called EGM. These are conducted, because the matter to be discussed is of utmost vital and it cannot be postponed till next AGM. The issues requiring approval of the members are discussed in the EGM.

The EGM can be conducted by the board of directors, on the requisition of members. The number of members to call for requisition must constitute atleast 1/10th of such of the paid up capital carrying voting right with regard to the matter to be discussed (company with share capital) or 1/10th of the total voting power of all the members having a right to vote on the matter (Company without Share capital)

The board should call the meeting within 21 days of receiving valid requisition.
If the board did not call such meeting within 21 days as aforesaid, the requisitionists themselves conduct such meeting within 45 days of submitting the requisition.

[2]Meetings under Section 391-394:

The provisions under section 391-394 is relating to the Merger and Amalgamation of companies. This meeting is conducted as per the provisions of the above mentioned sections along with Companies Court Rules, 1959 Rule 67-87.

Provisions:

• The Company or Companies proposing to enter into a compromise or arrangement or enter into a Merger or amalgamation must submit a petition to the concerned High Court where the registered office of the company is situated along with the proposed Scheme of arrangement or amalgamation. 
• The court issues an order to convene the meeting of the members and creditors to get their approval as provided under the act.
• The resolution for this purpose must be passed by majority of members, holding 3/4th of the share capital of the company, present either by person or proxy.
• The result of the meeting will be submitted in the High court and by way of a petition the court passes the order of amalgamation. 

What are the various types of resolutions under Companies Act?

Ordinary resolution (OR):

When a motion has been approved by more than 50% of the members present at the meeting, it is called ordinary resolution.

Special Resolution (SR):

when a motion is required to be approved by 75% of the members present at the meeting, it is called Special   resolution.

Special majority resolution:

The resolution which is passed as per Section 391-394, where approval is to be granted by more than 50% of the members present at the meeting, holding 75% of the share capital of the company, either by person or through proxy.

These are the provisions relating to convening of meetings as per the provisions of existing Companies Act, 1956. 

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[1] Refer MCA circular No.28  dated 20^th May 2011 for detailed procedure
[2] Refer Companies Act, 1956 Sections 390 to 396A for detailed provisions

Kindly note: This note has been prepared solely for the simple understanding of the Students. I request them to refer the necessary rules and/or sections of the act for detailed provisions.