Corporate Meetings Long Answer Type Questions
Write a note on the annual general meeting of the company as per act.
Under the companies at every company public or private must hold an annual general meeting of shareholders once every calendar year. This meeting enable the shareholders to discuss the affairs of the company on the board annual report of directors. The first annual general meeting must be held with in 18 months of the incorporation of the company and thereafter it must be held within six months of expiry of the financial years of the company.
Provisions of the act to conduct annual general meeting:
(a) The first annual general meeting must be held within 18 months of the incorporation of the company and there after it must be held within six months of the expiry of the financial year of the company.
(b) Notice of meeting must be sent to every members at last 21 days before the date of meeting.
(c) The meeting must be held at the registered office of the company within the business hours or at some place within the city or village in which the registered office is situated.
(d) The notice for the meeting must be accompany by a copy of audited balance sheet, profit and loss account and annual report directors.
Who can call an extra ordinary general meeting what are the procedure for the holding the meeting.
An extra ordinary general meeting may be convened by:
- Board of directors
- The board,of directors on the requisition of the members.
- The requisition themselves.
- The company, law board.
Procedure for holding the meeting:
(a) If the meeting is convened at the instruction of the directors the secretary sends notice of meeting to the members at least 21 days before the meeting.
(b) If the meeting is held on the requisition of the members, the secretary first ascertain the requirements of the at relating to the requisition and then in consultation with chairman he will convene the meeting.-The meeting should be held within 45 days of the deposit of the requisition.
(c) At the meeting chairman first follow the proceedings of the meeting and than secretary ready the notice of the meeting.
(d) Chairman will proceed the business as per agenda of the meeting.
(e) Before moving the resolution the chairman addresses the meeting and explains the need and importance of passing the resolution.
(f) If the resolution is a special resolution it must be passed by a 3/4th majority.
(g) After the meeting a copy of the special resolution must be filed with the registrars within 30 days.
Write a note on statutory meeting.
Statutory meeting in the first meeting of the share holders of a company held only once in life time of public company must hold this meeting within a period of not less than one month and not more than six months from the date of commencement of Business.
The main purpose of conducting this meeting is to give details on financial position and prospectus of the company. Members of the company get an opportunity at this meeting to discuss matters relating to the formation of the company, results of the company etc.
See 165 of companies act makes following provisions relating to statutory meeting.
(a) Every company limited by share, limited by guarantee, and having a share capital must hold a statutory meeting of share holders within a period of not less than one month and not more than six months from the date of commencement of business.
(b) Board of directors must send notice of meeting and statutory report to every member of the company at least 21 days before the day of the meeting.
(c) After sending the copies of statutory report to the members a certified copy of the same must be field with the registrars.
(d) The board must also produce at the statutory meeting a list showing the names address and occupation of member and the number of shares held by them. The list shall remain open for inspection members.
(e) At the meeting the members shall have a right to discuss any matter relating to company formation.
(f) If directors and the other officers of a company failed to follow the valid procedures of the meeting they are punishable with fine and the court on application of the registers or a contributory may order the winding up of the company or may direct the meeting be held.
Explain the laws relating to meetings under the companies act 2013.
(1) Annual general meeting:
Provided under Section 96 of the companies act “Annual General Meeting” every company other than a One person company shall each year hold a general meeting as annual general meeting other than any other kind of meetings and the company should make sure that there should not be a gap of more than fifteen months between two annual general meetings.
(a) First annual general meeting: With respect to first AGM, it should be held within the time frame of nine months from the date of closing of the first financial year. Now one of the biggest dilemmas is with respect to first financial year of the company as some major changes were brought up in the companies act 2013. Under the new provisions of the companies act, the financial year of the company incorporated after 1st January of a year would be 31st March of the following year and in other cases, it would be the period ending on the 31st March.
(b) Notice for Annual General Meeting: For a general meeting not less than a clear notice of 21 days either in writing or through electronic mode should be given. But a general meeting may be called after giving a shorter notice if consent by not less than 95% of the members entitled to vote at such meeting is given in writing or by electronic mode.
The notice of such meeting should consist of place, day, date and the proper hour of the meeting and should also contain a statement stating business which is to be transacted at such meeting. The notice should be circulated to every member of the company, legal representative of deceased and assignee of insolvent member, auditor and every director of the company. Section 101 of the Companies act 2013, deals with the provision of Notice for the annual general meeting.
(c) Quorum of meeting: As provided under section 103 of the companies act the quorum of the company in case of public company should be five personally present in case the total member on date of the meeting does not exceed 1000, 15 in case more than thousand but less than five thousand and 30 in case of more than 5000 members on the date of meeting. While in the case of a private company only 2 members if personally present will make up the quorum of the meeting.
It has been also provided that in case the quorum is not fulfilled within half an hour the scheduled time of the meeting then the meeting would be adjourned to the same day of the next week. In case the quorum is not filled within half an hour in the adjourned meeting then the present members would form the required quorum for the meeting. In the case of the meeting by requisition under section 100, the meeting stand cancelled in case of lack of quorum as provided under section 103(2).
(2) Extraordinary General Meeting:
(i) Under Section 100(1) of the Companies Act, the board may whenever it deems fit may call an extraordinary meeting of the company. (ii) Section 100(2) lays down the procedure for calling an extraordinary general meeting in case of the requisition. In case of the company who has share capital (basically the company limited by shares), should be voted upon by such number of members who on the date of receipt of the requisition holds not less than one-tenth of such of the paid-up share capital of the company as on that date carries the right of voting and in case of the company who does not have a share capital(basically the company limited by guarantee who don’t have share capital) should be voted upon by such number of members who on the date of receipt of the requisition holds not less than one-tenth of the total voting power of all the members having on the said date a right to vote.
(3) Meeting called by tribunals:
Under Section 98 of the Companies Act tribunal has been endowed with power to call for meetings on application by the member of the company or any director who is entitled to vote at such a meeting. It is basically done in the case where it is not practically possible for the company to hold a meeting other than an annual general meeting. It can pass any ancillary or consequential order as the tribunal may feel important.
Also, under section 97 of the Act Tribunal can call an annual general meeting in case of default of the company. It can pass any ancillary or consequential order as the tribunal feels expedient to do.
(4) Board meetings: Under Section 173 of the Act, this provision of the board meeting is applicable to all types of companies including one person company. The first board meeting is mandatory to be held within thirty days of the incorporation of the company and subsequent to that the company should hold a minimum of four meetings of the board of directors. One of the most important aspects is that not more than 120 days gap should be there between two such meetings.
One Person Company shall convene at least 1 board meeting in half calendar year and the gap between two meeting should not exceed by more than 90 days. The meeting can be done by way of video conferencing or any other audio-video means. The central government may decide upon exceptions, modifications or conditions of the companies or class of companies to be excluded from the applicability of this section and it can also decide which matters can’t be decided upon by way of video conferencing.
Notice and quorum for board meeting:
A minimum notice of not less than seven days has to be provided to every director of the company about the meeting at his registered address in the company by way of post or by e-mode. The meeting can be called at a shorter notice. In the case of absence of the independent director, decisions of such meeting should be circulated to every director and should also be ratified by at least one independent director. The quorum for the board meeting is 1/3rd of the total strength of the board of director or two, whichever is highest.
(5) Meeting of audit committee:
Audit committee has formation, rights and liabilities have been provided under section 177 of the Act. It consists of a minimum of three directors along with independent directors forming a majority.They can hold a meeting with respect to the discussion of audit reports.
Explain the various types of meetings under the companies act 2013.
(1) Member’s Meeting:
This meeting is only for the members of the company. Members and also directors discuss on the matters related to company.
Following are the types of member’s meeting:
- Statutory Meeting.
- Annual General Meeting.
- Extra Ordinary General Meeting.
(A) Statutory Meeting:
Statutory meeting is the first meeting which company conducts afters its commencement. Conduction of statutory meeting is compulsory. Public limited company is required to hold such meeting within a period not less than one month and not more than six months from the date of commencement.The directors of company also need to make statutory report. Every members also must be given a copy of report at least 21 days before the date of the meeting and a copy is also to be sent to the Registrar for registration.
Section 165(3) provides that the Statutory Report must contain the following particulars:
- The total number of fully paid-up and partly paid-up shares allotted
- The total amount of cash received
- The receipts, classifying them and also the expenses; incurred for commission, also brokerage etc.
- The names, addresses and also occupations of directors, auditors, managers and secretaries and also changes of the names, address etc.
- Particulars of contracts with proposed modifications presented at meeting for approval;The arrears of calls.
- Commissions and brokerages paid to directors and managers.
Every director or any other officer of the company who is in default shall be punishable with a fine which may extend to Rs. 500.
(B) Annual General Meeting (AGM):
Under Section 96 of the companies act, every company shall hold a general meeting as annual general meeting every year. Except one person company. There should not be a gap of more than fifteen months between two AGM.
Notice of AGM can be either in writing or also in electronic form. The member should get the notice at least fore 21 clear days. The notice should consist of place, day, date and the proper hour of the meeting. It should also contain agenda of meeting. Every member of the company, legal representative of deceased and assignee of insolvent member, auditor and every director of the company should get notice. Section 101 of the Companies act 2013, deals with the provision of Notice for the AGM.
(C) Extra ordinary meeting (EGM):
Every meeting which is not a AGM or statutory meeting meeting is EGM. An EGM is held for some special business which can not be transacted at AGM. It is also held to transact some urgent business. This meeting may be called by the Directors or by the member’s according to Sec. 169 of the Companies Act, 1956.
Meeting of Creditors: Meeting is when directors of company has any scheme for creditors. The Court may order a meeting of the creditors On the application of the company or of liquidator in case of a company being wound-up.
Meeting of Debenture Holders: Such meetings is held in the interest of debenture holder. The rules for appointment of Chairman, notice of the meeting, quorum etc. are there in the Trust Deed.
Meeting of Creditors and Contributories:
The main purpose is obtain consent of creditors and contributories to the scheme of rearrangement or compromise. It is to save the company from financial difficulties. Sometimes, the Court may also order to conduct meeting. The term “contributory” covers every person who is liable to contribute to the assets of the company when the company is being wound-up.
4. Meeting of the Board of Directors:
The Board of Directors -controls the management of the company. Therefore, the Directors are to meet frequently to decide both policy and also other related matters. It is conducted four times in a year.
What is extra ordinary general body meeting? Explain objectives and provisions of holding extra ordinary general meeting?
Every general meeting (i.e. meeting of members of the company) other than the statutory meeting and the annual general meeting or any adjournment thereof, is an extraordinary general meeting. Such meeting is usually called by the Board of Directors for some urgent business which cannot wait to be decided till the next AGM. Every business transacted at such a meeting is special business. An explanatory statement of the special business must also accompany the notice calling the meeting. The Articles of Association of a Company may contain provisions for convening an extraordinary general meeting.
Objectives (Purposes) of Extraordinary General Meeting: The main purpose (Objectives) to hold these meetings are –
- Change in memorandum of association.
- Change in articles of association.
- Reduction or reorganization of share capital.
- Issue of debentures.
- Removal of directors.
- Removal of auditors.
The business transacted at an extraordinary general meeting, being special business, every notice of such meeting must be accompanied by an explanatory statement.
Legal Provisions Relating to Extraordinary General Meeting (EGM):
(1) By Whom EGM is called:
(a) By the Board of directors: EGM may be called by the board whenever it deems fit by depositing a valid requisition at the registered office. On receipt of a valid requisition, the board shall within 21 days proceed to call an EGM to be held not later than 45 days from the date of deposit of requisition. The notice shall be given to those members whose names appear in the register of members within 3 days of receipt of a valid requisition.
(b) On the Requisition of shareholders: EGM may be called on requisition of members holding 1/10th or more of the paid up equity share capital if company have share capital. If company do not have share capital, on requisition of members holding 1/10th or more of total voting power. The requisition shall specify the matters for the consideration of which EGM is to be called and it is signed by all the requisitionists or a requisitionist duly authorised.
(c) By the requisitionists themselves: If the board fails to call an EGM, it may be called by the requisitionists themselves as follows:
- The EGM shall be held within 3 months from the. date of deposit of the requisition.
- The EGM shall be called in the same manner in which a meeting is called by the board of directors.
- The requisitionists shall be entitled to receive a list of members from the company.
- The EGM should be convened on a working day at the registered office or in the same city or town in which the registered office is situated.
- The notice of EGM shall be given by speed post or registered post or electronic mode.
- The notice of EGM shall disclose the place, date, day, hours and business to be transacted at the meeting.
(d) By the tribunal: If for any reason it is impractible to call a meeting of a company, other than annual general meeting, in any manner in which meeting of the company may be called, or to hold or conduct the meeting of the company in the manner prescribed by this act or the articles, the tribunal may, either of its own motion or on the application of any director of the company, or of any member of the company who would be entitled to vote at the meeting order a meeting of the company to be called, held and conducted in such manner as the tribunal thinks fit and give such ancillary directions as the tribunals thinks necessary.
What is annual general meeting? Explain the purpose and provisions relating to annual general meetings.
Annual General Meeting (AGM) is a meeting conducted by every Private Limited Company or Limited Company that provides an opportunity to the shareholders to meet every year and discuss matters relating to the Company. The AGM ensures the interest of the shareholders are protected. In this article, we look at the procedure for conducting an AGM and recording the same.
Purpose for Annual General Meeting:
Annual General Meeting is a statutory requirement for Private Limited Company and Limited Company in India. Every Company whether, public or private, limited by shares or guarantee, with or without share capital or unlimited company is required to hold an AGM every year.
Annual General Meeting is an annual meeting conducted by the shareholders and Directors of the Company. In the Annual General Meeting, the audited accounts of the Company are approved, appointment of auditors and Directors are finalized. Other items that can be decided in an AGM include compensation of officers, confirmation of proposed dividends and any other issue raised by shareholder.
First Annual General Meeting:
The first annual general meeting of the company must be held within 18 months from the date of incorporation of Company. Even a Company that has no activity is required to conduct a annual general meeting. Subsequent AGM should be held on the earliest of the following dates:
- 15 months from the date of last annual general meeting.
- the last day of the calendar year (December 31st).
- 6 months from close of the financial year (September 30th).
All company must hold an annual general meeting in every calendar year. However, if the first annual general meeting is held within 18 months from the date of its incorporation, it is not necessary to hold any annual general meeting in the year of incorporation or in the following year.
Notice for Annual General Meeting:
The notice for annual general meeting must be sent to all the member, auditors and debenture trustees atleast 21 days before the meeting along with the annual report of the Company. Shorter notice may be provided with the consent of all the members entitled to vote at the meeting.
Quorum for Annual General Meeting :
For a Quorum, 5 members personally present in the case of public limited company and 2 members personally present in the case of Private Limited Company shall be the quorum for the meeting, unless the Articles of Association provides for a larger quorum. The proxies cannot be counted for the purpose of quorum.
If within half an hour from the time appointed for holding a meeting, the quorum is not present, the meeting, shall stand adjourned to the same day in the next week at the same time and place, or to such other day, time and place as the Board of Directors may determine. If at the adjourned meeting also, a quorum is not present within half an hour from the appointed time, then the members present shall be the quorum.
What is resolutions? Discuss different kinds of resolutions.
Accordingly, a resolution may be defined as an agreement or decision made by the directors or members (or a class of members) of a company. A proposed resolution is a motion. When a resolution is passed a company is bound by it. The resolutions could be on just about any subject in case of Board meetings since they are ultimately responsible for running the Company. The Act generally specifies the matters in respect of which resolutions are required to be passed by the members in general meetings
(a) Board Resolution:
Board resolutions are akin to a poll which is Held by a company in its board meetings and annual general meeting for passing orders. The members of the company may cast their votes in the form of yes or no. In a medium sized company it typically happens by show of hands for “Yes” and “No” in a judgment to be taken by the company.
(b) Ordinary Resolution:
A resolution will be an ordinary resolution if the notice, required under the Companies Act has been duly given and it is necessary to be passed by the votes cast, whether on a show of hands, or electronically or on a poll. When a motion is passed by a simple majority of the members related the company who are permitted to voting at the General meeting, it is said to have been passed by an ordinary resolution. The votes cast in favor inclusive of the chairman if any are more than the votes cast in opposition to the resolution.
Matters passed as an ordinary resolution:
- Alteration in authorized capital
- Declaration of dividend
- Appointment of auditors
- Fixation of remuneration
- Election of directors
A resolution shall be a special resolution in the following conditions:
The intention to recommend the resolution as a special resolution has been accordingly specified in the notice naming the general meeting or other intimation given to the members of the resolution.
Notice necessary under the Companies Act has been given; and the votes east in favor of the resolution, whether on a display of hands, or by electronic means or on a poll, as the case perhaps, by members who, being entitled so to do, vote in person or by proxy or by postal ballot, are necessary to be not less than three times the number of the votes, if any, cast in opposition to the resolution by members so entitled and voting.
1. According to legislation and Section 114 (2) of Companies Act, 2013 a special resolution is held subsequent to the following conditions: The meaning of the proposal must be notified to the members of the company in the form of Notice.
2. Notice should comply with the requirement of 21 clear days earlier than the annual general meeting.
3. Votes cast in favor.by poll or show of hands.must by three times the votes cast against the resolution.
4. If there are any abstentions, they are not to be taken into account.
A number of matters applicable to Special Resolution:
- Alter object clause of memorandum.
- Change in registered office of company from one state to another.
- Reduce share capital of the company.
- Alteration of Articles of association.
Every company will hold its first board meeting within a period of 30 days from its date of incorporation and subsequently 4 board meetings of its board of directors every year in such a manner that not more than 120 days will intervene between two following, meetings of the board Participation of directors can be In-person, by video conferencing or any other audio visual modes which are capable of recording and recognizing the participation related to the directors.
Notice for the meeting should be served in not less than 7 days. The notice should be in writing to every director at his address registered with the company and can be sent by means of hand delivery or post or by any electronic modes.
Explain the requisites of valid meeting under the company act 2013.
(a) 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.
(b) 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 21 days 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.
(c) 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.
(d) 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 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.
(e) 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.
(f) 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.
What is Extra- ordinary General Body Meeting? Explain objectives and provisions of holding extra-ordinary general meeting.
Objectives and provisions of holding extraordinary general meeting:
- The main objectives of conducting extra ordinary general meeting is to transact urgent nature of special business.
- This meeting is convened by Board of directors on the requisition of members or company law board or board of directors themselves.
- The meeting notice is send by the secretary at least 21 days before conducting the meeting.
- Secretary has to prepare the draft resolution and the explanatory statement and it should be approved by the board.
- The explanatory statement will also adverstise in the newspapers.
- Secretary is held responsible for conducting the extraordinary meeting.
- During the meeting board of directors will pass the resolution on urgent matters related to company.
- The minutes of the meeting is prepared by the secretary and get them approved and signed by the chairman of the same meeting.
- The certified copy of the extra ordinary general meeting resolution should be field with the registrars within 30 days of the passing resolution.
State the business transacted in annual general meeting and default for holding annual general meeting.
Business to be transacted:
As per section 102(2) of the Companies Act, 2013,the following business es may be transacted during AGM:
(1) Ordinary Business [Section 102(2)], i.e.
- Consideration of financial Statements and reports of board of directors and Auditors..
- Declaration of any Dividend
- Appointment of directors in place of retiring one
- Appointment of and Fixation of the remuneration of the auditors.
(2) Special Business [Section 102(b)]: Apart from the above businesses, the rest are deemed to be a Special business, transacted during the AGM. Annual General Meeting is compulsory if,
- Business of the Company was taken over by Government.
- Company did not function.
- Accounts of the Company are not ready.
Defaulting in holding Annual General Meeting:
If a Company not holding an Annual General Meeting as per Section 166, or not complying with any direction of the Central Government, then the Company and its every officer come in the Category under section 168 of the Company Act ,2013 and punishable with fine which may extend to Rs. 50000 and for regular basis it may extend to Rs.2500 for every day [Section 168].
Further, as per section 167 of The Companies Act ,1956 provides for the power of the Company Law Board (CLB) to call AGM in the following circumstances:
- As per section 94, if Company fails to hold Annual General Meeting, any member of the company can request to NCLT (powered with CLB) for calling AGM. [Section 97(1)]
- The CLB can give any ancillary or consequential directions which are expedient in relation to the calling, holding and conducting the meeting. [Section 167(1)]
- Apart from the above, CLB also directs that one member of the company present in person or by proxy, which shall be deemed to constitute a meeting.
- A general meeting held as per the direction of the CLB, deemed to a n annual ‘ general meeting of the company.