Unit – 4

Corporate Meetings

Syllabus –

Corporate Meetings - Types of Meetings, Annual General Meeting, Extraordinary General Meetings,
Board Meeting; Requisites of a valid meeting; resolutions and kinds of resolution; preparation Agenda
and minutes.

Introduction

A company being an artificial person cannot act on its own. Therefore, the decisions are expressed
through a resolution passed in a valid meeting. Corporate Meetings have to be held in compliance
with Companies Act, 2013.

Meaning of Meeting

• Meeting can be defined as an assembly or gathering of people for transacting lawful business.

• The primary objective of the meeting is to ensure all participants get reasonable and fair
opportunity to take decisions as per Companies Act, 2013.

Types of meeting

• Annual General Meeting

• Extraordinary general meeting

• Class meeting

• Board meeting

• Committee meeting
 Meeting of the Share Holders

The meetings of the shareholders can be further classified into four kinds namely,

 Statutory Meeting,
 Annual General Meeting,
 Extraordinary General Meeting,
 Class Meeting.

1. Statutory Meeting
 This is the first meeting of the shareholders conducted after the commencement of
the business of a Public company.
 Companies Act provides that every public company limited by shares or limited
by guarantee and having a share capital should hold a meeting of the shareholders
within 6 months but not earlier than one month from the date of commencement
of business of the company.
 Usually, the statutory meeting is the first general meeting of the company.
 It is conducted only once in the lifetime of the company.
 Such a meeting must be held within a period of not less than one month or within
a period not more than six months from the date on which it is entitled to
commence business i.e. it obtains certificate of commencement of business.
 No decisions/resolutions are passed in Statutory Meeting.

In a statutory meeting, the following matters only can be discussed:-

 Modification to contracts mentioned in the prospectus

 Approval of Statutory reports and documents (MOA, AOA and Prospectus).
 Information regarding the formation of the company.
 Number of shares allotted.
 Preliminary contacts entered into by the company.
 Information regarding underwriting of shares.
 Debentures by the company

Statutory Report

It is a report prepared by the BOD of every Public Company and forwarded to the
members at least 21 days prior to the statutory meeting.

Contents of a Statutory Meeting

 Approval of MOA and AOA by ROC:Information about the approval of Preliminary

Documents by ROC has to be intimated to the Shareholders.
 Shares allotted: The total number of shares allotted distinguishing those allotted as fully paid
up, partly paid up, shares issued for consideration other than cash etc.
 Cash received: The total amount of cash received by the company in respect of all the shares
allotted.
  Directors, auditors and other managerial personnel: The names, occupations and address
of all the directors, auditors, manager and secretary of the company. Changes if any that have
occurred should also be mentioned.
 Contracts: The particulars of any contracts, modification of contracts or proposed
modification of contracts.
 Underwriting contract: The extent to which each underwriting contract has not been carried
out along with the reasons.
 Arrears of calls: The arrears on calls from directors and manger.
 Commission and brokerage: The particulars of commission and brokerage paid or to be paid
to any director or manager in connection with the issue of shares or debentures.
Objects of statutory meeting

Statutory Meeting is convened in order to accord the shareholders an opportunity for seeing what
degree of success has attained the flotation of the company and in order that any special matters
requiring their approval may be laid before them.

The statutory meeting is held to inform the shareholders matters relating to incorporation, allotment of
shares, contracts entered into by the company, utilization of funds etc.,

2. Annual General Meeting (AGM)

It is an important annual event where the members get an opportunity to discuss the activities
of the company. As per Companies Act, 2013 every company other than OPC must hold the
AGM of the company every year.

Provisions for holding AGM

• It should held once in financial year.

• The first AGM must be held within a month from the date of closure of financial year.

• Subsequent AGM must be held within 6 months from the closing date of the financial year.

• The time gap between two AGMs must not exceed 15 months.

• A notice of AGM has to be sent prior to 21 days to all the members.

• At every AGM board of directors of the company shall lay before the meeting financial
statement for the financial year.

Time and place for holding AGM

• AGM must be held only during the business hours. That is from 9 AM till 6 PM on any day
that is not a national holiday. It can be conducted at the registered office of the company or
any other place within the city, town or village within which the registered company is
situated.

Business transacted in AGM

• Consolidated financial statements by BOD and Auditors.

• Audit report and auditors opinion on financial statements. Of the company.

• Declaration of dividends.
 • Appointment of directors.

• Appointment and remuneration of auditors.

• Apportionment of profits earned by the company.

• Future expansion plans.

Liability for default in holding AGM

Any default in holding AGM every officer in charge shall be punishable with the fine which
may extend up to Rs. 1 Lakh.

3. Extra-Ordinary General Meeting

An extraordinary general meeting (EGM), also called a special general meeting or
emergency general meeting, is a meeting other than a company’s annual general meeting
(AGM) that regularly occurs among a company's shareholders, executives and any other
members.

The notice for Extra-ordinary General meeting (EGM) has to be given at least 21 days clear
before the meeting.

In contrast, an EGM is usually called on short notice and deals with an urgent matter, often
concerning company management.

• EGM can be called by –

a. The board

b. By the requisition of Share Holders

c. By members

a. The Board can call for EGM whenever it deems fit.

b. By the requisition of Share Holders.

The BOD must call for an EGM on requisition in following cases-

The member who hold not less than 1/10th of total share capital send a requisition to
call for an EGM.

In case no shareholders hold 1/10th of voting power a requisition should be sent to the
registered office of the company containing the matter to be discussed in the EGM
and signed by all the members who request for EGM.

The board within 21 days from the receipt of requisition must send a notice of
EGM on a date not less than 45 days from the receipt of such requisition.
 c. If the BOD do not call for an EGM within 21 days from the date of reciept of
requisition or do not arrange for EGM within 45 days from the date of reciept of
requisition the members can themselves hold an EGM within a period of 3 months
from the date of requisition.
• The expenses of the meeting have to be reimbursed by the company.

• If the quorum is not present within half an hour from the fixed time, the meeting shall
stand cancelled.

Provision for holding EGM

• The notice of EGM shall specify date, place, time and day of the meeting.

• The notice must be in written or electronic format.

• The notice shall be given to those members whose names appear in the register of
members of company and MOA of the company.

Business are transacted in Extra-ordinary General meeting (EGM)

• Removal of Director

• Removal of Auditor

• Matter on whom approval of members is/are required

• Appointment in case of casual vacancy of BOD and Auditors

• Any matter that can’t wait until the next shareholders meeting

4. Board Meeting
A meeting held at regular intervals to discuss the policies, procedures, functions and problems
faced in the process of running the company is called board meeting.

In is the meeting of the board where a Chair Person is appointed has the head of the meeting.

All the directors have to follow what is decided in the meeting.

Provisions relating to Board Meeting

• First Board Meeting is to be held within 30 days from the date of incorporation.

• There shall be a minimum of 4 Board meetings conducted every year.

• In case of OPC and Small Company minimum of 1 board meeting has to be conducted in the
each half of the calendar year.

• Notice of the board meeting shall be sent by the CS to the BODs in not less than 7 days from
the date of meeting.
Procedure to conduct Board Meetings

• Directors can participate in the meeting either in person or through video conferencing or any
other means.

• The chairperson of the meeting shall take reasonable care to –

a. Safeguard the integrity of the meeting.

b. Ensure that the minutes of the meeting are being recorded.

c. Ensure proper arrangement for video conferencing facility.

d. Ensure quorum of the meeting.

e. Sign the minutes of the meeting.

f. After the conclusion of the meeting, the chairperson shall announce the summary of the
decisions taken in the meeting.

Quorum of Board Meeting

1/3rd of the total strength of BOD or 2 directors whichever is higher shall be the quorum of the
meeting. Not applicable for OPC.

Matters discussed in Board meeting

• Appointment of Company Secretary.

• Matters relating to issue of shares and debentures.

• Approval of financial statements before presenting it to shareholders in AGM.

• Approval of dividends to be declared.

• A review of effectiveness of policies and procedures implemented in the organization.

Board Meetings are organized by CS. Procedure for organizing board meeting has to be mentioned in
AOA of the company.

5. 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.

Requisite of a Valid Meeting

Proper authority for call for meeting - A meeting must be convened or called by a proper authority.
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.
• Notice of the meeting – Brief statement inviting the participants to attend the meeting. 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 21days notice must be given to
members. 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.

• Agenda – program schedule - 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.

Contents of Agenda

 Name of the Company.

 Type of meeting (Members/Directors meeting)

 Purpose of the meeting

 Matter to be discussed.

 Chairperson of the meeting.

 Time estimates.

 Quorum of the meeting.

• Chairman – chief authority of the 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.

• Quorum – Minimum member of participants required for meeting.

• Minutes of meeting – summary of discussions and decisions taken in meeting. 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.

Procedure to maintain the minutes

 It must be recorded in the book maintained for that purpose.

 Different minutes book should be maintained for different meeting .(AGM, EGM, BM)

 Minutes may be maintained physically or electronically.

 Minutes book should not be altered for any reason.

 Pages of minutes book shall be consecutively numbered.

  Minutes book shall be kept in the registered office of the company.

• Proxy- person who represents the participant in absence. 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.

• Voting/resolution – Legally binding decisions made by the participants for conducting

business activities.

Resolution

Introduction

Company is an artificial person and it cannot take a decision on its own. Members and directors of the
company take resolutions on behalf of the company.

Meaning of Resolution

It is a legally binding decision made by the participants (members & directions) in the meeting. A
resolution is passed if majority vote is achieved in favor of the decision.

Types of Resolution

• Ordinary Resolution

• Special Resolution

• Unanimous Resolution

Ordinary Resolution - A resolution which is passed by a simple majority of votes cast by

members present in person or by proxy is called ‘ordinary resolution’. Simple majority means that
the votes cast in favor of the resolution must be at least one more than 50 per cent of the votes
cast.

An ordinary resolution must satisfy the following conditions:

• It must be moved at a general meeting of which due notice has been given.

• The voting may be on show of hands or by poll.

• Voting must be by members who are entitled to vote in person or by proxy, if allowed; and

• The votes cast in favor of the resolution, including the casting vote of the chairman, if any,
must exceed the votes, cast against the resolution.

Matters which require Ordinary Resolution

• Adoption of statutory report

• Removal of director from office before the expiry of his term

• Alteration of share capital

 • Issue of shares at a discount

• Appointment of sole selling agents.

Special Resolution - A special resolution is one which is required for transacting special business
and is required to be passed by a three-fourths or 75% majority of members present and vote in
the meeting.

A special resolution in order to be valid under the law must satisfy the following conditions:

• The notice of the general meeting must have been duly given as required under the Act;

• The intention to propose the resolution as a special resolution must have been duly specified
in the notice calling the general meeting or other intimation of such intention must have been
given to members;

• The voting may be on show of hands or on poll;

• Votes are cast by members who are entitled so to do, either in person or by proxy; and

• Votes cast in favor of the resolution are not less than three times the number of votes, if any,
cast against the resolution.

Special resolution is required to transact the following types of business:

• To change of name of the company

• To change of the domicile of the company

• To change the object clause

• To alter Articles of Association

• To create reserve capital

• To Reduce share capital

• To pay interest out of capital

• To decide winding up of the company

Unanimous Decision - Decision that requires to be passed by 100% or all the participants present
in the meeting.

Unanimous decision of the board is required for carrying out-

 Investment made or loan or guarantee given by the company

 Appointment of managing director.