Company Meetings Introduction: The business of a company, which is an artificial person created by law, is conducted by the elected representatives

of its shareholders, known as 'directors'. To conduct the affairs of the company, directors rake decisions at the meeting of the Board of Directors. But they are . not entitled to take decisions on all matters relating to the company. There are certain matters on which decisions are to be taken by the general body of shareholders, who are the own6rs of the company. Sometimes the creditors and debenture holders of the company may also be required to express their opinion on certain matters for which meetings have to be held. In this unit, you will be acquainted with different types of company meetings, the business transacted therein, and the requisites thereof, with special reference to relevant provisions of the Companies Act. Company meetings A company meeting, like that of any other association of persons, implies coming together of two or more persons for transacting any lawful business. For the proper conduct of a company's business, it is oecessary that directm and shareholders respectively should meet as often as often as necessary, and take decisions on relevant matters after full discussion. Types of Meetings Company meetings may be broadly divided into three types: i) Meetings of shareholders or members, ii) Meetings of Directors and iii) other meetings. Meetings of Shareholders: These meetings, also known as general meeting of members, are held periodically to enable shareholders to exercise their collective rights. Four types of shareholders meetings may be distinguished as follows: C i) Statutory Meeting; il) Annual General Meeting; iii) Extraordinary General Meeting; and iv) Class Meetings. Meetings of Directors: These meetings are held as often as necessary for collective decisions to be made by the directors. Two types of meetings may be held by directors: (a) Meetings of the Board of Directors and (b) Meetings of committees of Directors. Other Meetings: Besides meetings of shareholders and Meetings of directors, meeting of debenture holders, creditors and contributories may be held to take decisions on matters of interest to the respective groups. Three types of such Meetings are: (a) Meetings of Debentureholders, (b) Meetings of Creditors and (c) Meetings of Creditors and contributories on the winding up of a company.

Statutory meeting Statutory meeting is the first meeting of the Shareholders of a public company having a share capital and is held once in the lifetime of the company. As required under Section 165 of the 46 Companies Act, every company limited by &shares or limited by meeting of members called Statutory Meeting' within a period of not less man one month and not more than six months from the date on which the company become entitled to commence business. Purpose of holding a statutory meeting: The main purpose of the statutory meeting is to Inform members about the company's financial position and prospects. The meeting provides an opportunity to the members to discuss matters relating to the formation of the company, to know about the public subscription to its share capital, and to get an idea about tbe assets and properties acquired or to be acquired. Notice of the meeting: The notice of the statutory meeting must be sent to all members of the company at least 21 days before the date of meeting. The notice must specify that it is a statutory meeting. There must be 21 days clear notice. Statutory report: The Board of Directors have to place before the member at this meeting a report, known as 'Statutory Report, which should contain particulars regarding allotment of shares, receipt and payments of cash, preliminary expenses, details of contracts submitted for approval, underwriting agreements etc. At the meeting, members may raise questions relating to all matters arising out of the report, as well as on matters not set out in the report after proper notice has been given about the intention to raise additional matters. No resolution can be passed at the meeting unless due notice has been given thereof. A copy of the Statutory Report must be sent to every member of the company along with the notice of the statutory meeting atleast 21 days before the day of the meeting.

If there is default in holding the statutory meeting and submitting the statutory report in accordance with law, every director and other officer in default shall be punishable with fine I up to Rs. 500. Further, the members have right to file a petition to the court for compulsory winding up of the company for such default. The court, on application of the Registrar, or a contributory, may order the winding up of the company, or may direct that the meeting be held. Time of holding a meeting : Once in a life time of a company Place of holding a meeting : At the registered office or any place with the city / village/ town where the company is registered Business transacted at statutory meeting (a)The total number of shares allotted (b) The total amount of cash received by the company in respect of all shares allotted, distinguishing as aforesaid. (c) An account of preliminary expenses. (d) The names, addresses and occupations of directors, auditors, manager and secretary, if any, of the company and the changes which have taken place in the names, addresses and occupations of the above since the date of incorporation. (e) Any commission or discount paid or to be paid on the issue or sale of shares or debentures must be separately shown in the aforesaid abstract. (f) Particulars of any contracts to be submitted to the meeting for approval and modifications done or proposed. (g) If the company has entered into any underwriting contracts. Quorum a quorum is the minimum number of persons who must be present in order to constitute a valid meeting. If there is no quorum, the meeting shall not be valid and the business transacted at such, meeting will be invalid. Five persons personally present in the case of a public company and two persons present in the case of any other company, shall constitute the quorum for a general meeting of the company. Annual General Meeting Every company, public or private, must hold an annual general meeting of shareholders every calendar year in addition to any other general meeting. This is a statutory requirement. The purpose of the annual general meeting is to enable members to discuss the affairs of the company on the basis of the annual report of directors and audited accounts, as well as to exercise their rights and privileges of membership. Time of holding a meeting The first annual general meeting must be held within a period of not more than eighteen months from the date of incorporation of the company. If the meeting is held within that period, it shall not bc necessary for the company to hold any such meeting in the year of incorporation and the next year. Thereafter (from 1993 onwards) an annual general meeting must be held every year and not more than 15 months must elapse between the date of one annual general meeting and the next. Except in the

case of the first annual general meeting, the Registrar may, for any special reason, grant an extension of up to 3 months for holding the annual general meeting. Notice period : A notice specifying that it is annual general meeting and giving the date, time and place of the meeting must he sent to every member at least 21 days before the date of the meeting. At last 21 clear days notice in writing is required to be given. It may be called with a shorter notice if it is agreed to by all members entitled to vote at the meeting. Time : The meeting must be called on a working day during business hours.If the Central Govenunent declares the day to be a public holiday after issue of the notice, it shall not be deemed the day to be a public holiday and the meeting could.be held on that day as scheduled. Place : Meeting to be held either at the registered office of the company or at some other place within the city or town in which the registered office of the company is situated. Business Transacted at the Meeting: The business to be transacted at the annual general meeting may include ordinary business and any other business termed 'special business.' The ordinary business generally transacted in every annual general meeting are; I) Consideration of the annual accounts, balance sheet and reports of the Board of D~rectors and auditors; ii) Declaration of dividend; iii) Appointment of directors in place of those retiring; and IV) Appointment of the auditors and fixing their remuneration Consequences of Default in Holding Annual General Meeting: Since the holding of annual genernl meeting is a statutory requirement, if there is default in holding it as per Sec. 166 of Company Act, the consequences will be as follows: i) The Central Government may, on the application of any member, call the meeting or direct the company to call the meeting. The Central Government may also give any of the direction as it thinks , which may even include a direction that one person present in person or in proxy shall constitute the annual general meeting. ii) On the failure of the company to hold the annual general meeting or to comply with the directions given by the Central Government, then the company and every officer of the company in default shall be punishable with fine up to Rs. 5,000 and if the default continues, with a further daily fine of upto Rs. 250 for the period that the default continues. Quorum a quorum is the minimum number of persons who must be present in order to constitute a valid meeting. If there is no quorum, the meeting shall not be valid and the business transacted at such, meeting will be invalid. Five persons personally present in the case of a public company and two persons present in the case of any other company, shall constitute the quorum for a general meeting of the company. Extra-ordinary General Meeting All general meetings of a company other than the statutory and annual general meeting are called 'extraordinary meeting'. Extraordinary general meeting is a meeting which is held between two annual general meetings. These meetings are called in emergencies or on special occasions. Such a

meeting is called to discuss some urgent special business which cannot be postponed till the next annual general meeting, for example, alteration in the memorandum or articles of association, reduction of capital, issue of debentures etc. All business transacted at such meeting is deemed to be special business. An extraordinary general meeting may be called by i) Board of directors on its own motion; ii) The Board of Directors on the requisition of members; or iii) The requisitionists themselves; or iv) The Company Law Board. Requisitionist : Those members holding at least one-tenth of the paid-up capital and having a right to vote on the matter are called requisitionist. Notice period : A notice specifying that it is EGM and giving the date, time and place of the meeting must he sent to every member at least 21 days before the date of the meeting. At last 21 clear days notice in writing is required to be given. Place: The meeting may be held at a place other ' than the registered office of the company or even outside the city in which the registered office is situated. Time :extraordinary general meeting may be held on any day including a public holiday.