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RESOLUTIONS, MEETINGS & MINUTES UNDER THE COMPANIES ACT 1956

A Presentation by KAUSHIK M JHAVERI PRACTISING COMPANY SECRETARY E-Mail : kmjandco@gmail.com
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RESOLUTIONS
RESOLUTIONS : are records of formal decisions of Directors or Shareholders and are prefixed by the word “ RESOLVED”. q Resolutions are of 2 types: • Ordinary Resolution • Special Resolution
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ORDINARY RESOLUTIONS Section189 (1) of Companies Act,1956 ØA

resolution shall be an ordinary resolution when at a general meeting (AGM/ EOGM) of which notice required under the Companies Act has been duly given , the Votes cast (whether on show of hands, or on a poll, as the case may be,)
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of the chairman) by members who being entitled so to do . if any . cast against the resolution by members so entitled and voting CS KAUSHIK M JHAVERI 4 . vote in person or where proxies are allowed .ORDINARY RESOLUTIONS Øin favour of the resolution (including the casting vote . exceed the votes . by proxy . if any .

Ordinary Resolution Sr. 1. Sections u/s 224 (1) Particulars To appointment Statutory Auditors to Fix their remuneration E-forms E-from 23B 2. u/s 269 & Sch. XIII E-form 23. No. E-form 25C & E-form 32 . u/s 260 4. u/s 94 To alter the Share E-form 5 Capital of the Company To appoint Additional Directors To appoint Managerial Personnel and Fix their remuneration E-form 32 3.

Appointment of and the fixing of remuneration of auditors (u/s 210 read with Sections173 & 225) . Appointment of Directors in place of those retiring 4. Declaration of Dividend (u/s 205) 3. balance – sheets and reports of Board of Directors and auditors (u/s 210 & u/s 215) 2. Consideration of accounts.Ordinary Resolution A Ordinary Resolution For – 1.

1956 ØA resolution shall be a special resolution when – • (a) the intention to propose the resolution as a special resolution has been duly specified in the notice calling the general meeting or other intimation given to the members of the resolution.Special Resolution Section 189 (2) of Companies Act. CS KAUSHIK M JHAVERI 7 .

Special Resolution • (b) the notice required under this Act has been duly given of the general meeting. as the case may be) by members who. being entitled so to do. and • (c) the votes cast in favour of the resolution (whether on a show of hands. or on a poll. CS KAUSHIK M JHAVERI 8 .

by proxy. cast against the resolution by members so entitled and voting.Special Resolution • vote in person. are not less than three times the number of the votes. if any. CS KAUSHIK M JHAVERI 9 . or where proxies are allowed.

u/s 77A (2) To purchase the E-Form 23 & E-Form company’s own shares or 4C Specified securities . u/s 31 u/s 94 4. E-form 61. No. E-form 21 & Eform 18 E – Form 23 E-Form 23 & E-Form 5 2. 1. Matter u/s 17 Particulars Shifting of Registered office from One state to Another Alteration of Articles of Association Increase in Authorized Share Capital and consequently alteration of Articles of Association E-forms E-form 23. 3.Special Resolution Sr.

then in India (not being less in number the quorum fixed for a meting of the Board or committee. . together with necessary papers. if any to all the members of the committee.Circular Resolution (u/s 289) No resolution shall be deemed to have been duly passed by the Board or by committee thereof by circulation. and has been approved by such of the directors as are then in India. as the case may be). unless resolution the resolution has been circulated in draft. and to all other directors or members at their usual address in India. or by a majority of such of them. as are entitled to vote on the resolution.

Section 297 4. Section Section 262 Section 292 Particulars Filling a causal vacancy in the Board The power to: (a) To make calls on shares (b) To issue debentures (c) To borrow money otherwise than on debentures (d) To Invest the funds of the company (e) To make loans Board’s sanction for certain contracts in which particular directors are interested. Section 299 . No. Disclosure to the Board of director’s interest in a transaction of the company 3. 1. & not by circulation Sr.Matters which require sanction at Board Meeting. 2.

Section Section 308 Particulars Disclosure to the Board of a director’s shareholding Approval of the appointment of a person as managing director or manager in more than one company Sanction for intercorporate loan. No. Section 316 & 386 7.Matters which require sanction at Board Meeting. Section 372-A . investments or giving guarantees or providing security 6. & not by circulation Sr. 5.

MEETINGS q A meeting may be defined as a gathering or assembly or getting together of a number of persons for transacting any lawful business and not for entertainment or the like purpose. CS KAUSHIK M JHAVERI 14 . Section 171 to 186 apply to meetings. qA Company meeting must be convened and held in perfect compliance with the various provisions of the Act and the rules framed thereunder.

1956 can be classified as under : qMeetings of the Directors and their Committees qMeetings of Shareholders • Statutory Meeting (u/s 165) • Annual General Meetings (u/s 166) • Extraordinary General Meetings • Class Meetings qMeetings of the Creditors otherwise than in winding up. CS KAUSHIK M JHAVERI 15 .MEETINGS Ø The meetings of a company under the Companies Act.

Meetings of the Directors qSection 285 of the Act prescribes that in case of every company a meeting of Board of Directors shall be held at least once in every three months and at least four such meetings shall be held in every year. then in such case they have compiled the provision of 16 CS KAUSHIK M JHAVERI Section 285. Example: If non listed public/ private company holds its Board Meeting on 1st April. 2008 and second Board Meeting on 30th June. 2008. .

Meetings of the Directors Quorum for Board Meeting u/s 287 The quorum for a meeting of the Board of directors of a company shall be one-third of its total strength (any fraction contained in that one-third being rounded off as one). the number of the directors who are not interested [present at the meeting being not less than two]. shall be the quorum during such time. that is to say. CS KAUSHIK M JHAVERI 17 • . whichever is higher: • Provided that where at any time the number of interested directors exceeds or is equal to two-thirds of the total strength the number of the remaining directors. or two directors.

after deducting there from the number of the directors. Example: If Company considers Bonus Issue of Shares and there are 6 Directors in Board. if any. Out of them 3 directors are in favour of issue of bonus shares in ratio 2:1 and remaining are against the same. whose places may be vacant at the time.Meetings of the Directors "total strength" means the total strength of the Board of directors of a company as determined in pursuance of this Act. Then What we will be the outcome of the same ? CS KAUSHIK M JHAVERI 18 .

Example: If in the Board Meeting the Chairman of the meeting is proposed to be appointed as the Managing Director. in such case the Chairman will relinquish his position & another Board member will took the chair for that Item of Board Meeting as the Chairman is the Interested in the Proposed Resolution. CS KAUSHIK M JHAVERI 19 . count for the purpose of forming a quorum at a meeting of the Board. by reason of section 300.Meetings of the Directors "interested director" means any director whose presence cannot. at the time of the discussion or vote on any matter.

it is required to hold Board meetings at least once within every six months. every listed company . v In case of section 25 company. which is covered by this clause is required to hold at least four Board meetings in a year with a maximum time gap of four months between any two meetings. 2009 then in such case his meeting will not be held later than 29th April. 2009 to comply with the Listing Agreement.Meetings of the Directors v As per clause 49 of the listing agreement . Example: If listed company holds its Board Meeting on 1st January. CS KAUSHIK M JHAVERI 20 .

subject to the provisions of the Act.Meetings of Committee of Directors § If authorised by articles . the directors have power to delegate their authority to a committee and a company may adopt Regulation 77 of Table A to schedule I which reads as under: § Regulation 77 states § “1)The Board may. body M JHAVERI 21 . delegate any of its powers to committee consisting of such member or members of its CS KAUSHIKas it thinks fit.

conform to any regulations that may be imposed on it by the Board. CS KAUSHIK M JHAVERI .” * AUDIT COMMITTEE* Section 292A states the provisions relating to Audit Committee . Every Public company having a paid .Meetings of Committee of Directors 2) “Any Committee so formed shall in the exercise of the powers so delegated .up of not less than rupees five crores is required to constitute “ Audit 22 Committee”.

other than managing or whole-time directors.Audit Committee • As per Section 292A of Companies Act. Two.thirds of the members of audit committee shall be Independent Directors. § As per Listing Agreement the Audit committee shall have minimum three directors as members. 1956 The Audit Committee shall consist of not less than three directors and such number of other directors as the Board may determine of which two-thirds of the total number of members shall be directors. CS KAUSHIK M JHAVERI 23 .

CS KAUSHIK M JHAVERI 24 . § The proceedings at the meeting of Audit Committee will take place in accordance with the terms specified in writing by the Board. if any. the internal auditor. and the director incharge of finance shall attend and participate at the meetings but shall not have the right to vote.AUDIT COMMITTEE § The auditors.

the scope of audit including the observations of the auditors and review half – yearly and annual financial statements before submission to the Board and also ensure compliance of internal control systems. CS KAUSHIK M JHAVERI 25 .AUDIT COMMITTEE § The Audit Committtee should have discussions with the auditors periodically about internal control systems.

§ If the Board does not accept the recommendations of the Audit Committee.AUDIT COMMITTEE § The recommendations of the audit committee on any matter relating to financial management including the audit report shall be binding on the Audit Committee. CS KAUSHIK M JHAVERI 26 . it shall record the reasons therefore and communicate such reasons to the shareholders.

CS KAUSHIK M JHAVERI 27 .AUDIT COMMITTEE § The Annual Report of the company shall disclose the Composition of Audit Committee. § As per the Listing Agreement the Chairman of the Audit Committee shall be an Independent Director. § The Chairman of the Audit Committee shall attend the Annual General Meeting of the Company to provide any clarification on matters relating to audit.

the company and every officer who is in default .AUDIT COMMITTEE § If a default is made in complying with the provisions of this section. or with fine which ma extend to fifty thousand rupees or with both. shall be punishable with imprisonment for a term which may extend to one year. CS KAUSHIK M JHAVERI 28 .

MEETINGS OF SHAREHOLDERS ØStatutory Meeting v According to Section 165 of the Companies Act. Every company limited by shares and every company limited by guarantee and having a share capital has to call a statutory meeting within a period of not less than one month and not more than six months from the date at which the company is entitled to commence business. CS KAUSHIK M JHAVERI 29 .

• The notice convening the meeting should state it to be the statutory meeting. CS KAUSHIK M JHAVERI 30 . • Failure to hold such a meeting renders the company liable to be wound up under section 433(b). • It is to be held only “ once” in the lifetime of a Public company .Statutory Meeting • This is a special kind of meeting.

1956 alongwith notice of the meeting has to be drafted under the directions of chairman or the MD as the case may be before the meeting. one of whom should be managing director .Statutory Meeting v A private company is not required to hold a statutory meeting. CS KAUSHIK M JHAVERI 31 . v The Statutory Report and notice has to be certified by not less than 2 directors . v The Statutory Report in Form22 as prescribed in Companies (Central Government’s) General Rules and Forms. if there is one and also obtain from the auditors of the company a certificate in regard to correctness of the prescribed particulars.

Statutory Meeting Notice of Statutory Meeting: vThe Statutory Report and the Notice for the meeting has to be printed and issued at least 21 clear days before the date of the meeting under postal certificate. vThe Certified copy of the statutory Report with the Registrar of Companies alongwith filing fee after the copies have been sent to members. CS KAUSHIK M JHAVERI 32 .

Also forward one copy of each to all the recognised stock exchanges in India. forward 3 copies of the Notice of the meeting and six copies of the Statutory Report to the Stock Exchange . with which the securities are listed.Statutory Meeting vIn case of Listed company. CS KAUSHIK M JHAVERI 33 .

Business conducted at Statutory Meeting
• The Board shall cause a list showing the names, addresses and occupations of the members of the company, and the number of shares held by them respectively, to be produced at the commencement of the statutory meeting, and to remain open and accessible to any member of the company during the continuance of the meeting. • The members of the company present at the meeting shall be at liberty to discuss any matter relating to the formation of the company or arising out of the statutory report, whether previous notice has been given or not; but no resolution may be passed of which notice has not been given in accordance with the provisions of this Act.
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Business conducted at Statutory Meeting
• The meeting may adjourn from time to time, and at any adjourned meeting, any resolution of which notice has been given in accordance with the provisions of this Act, whether before or after the former meeting, may be passed; and the adjourned meeting shall have the same powers as an original meeting. • If default is made in complying with the provisions of this section, every director or other officer of the company who is in default shall be punishable with fine which may extend to five thousand rupees.
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Annual General Meeting Section 166 of Companies Act,1956
vAn Annual General Meeting is required to be held by every company , public, private, limited by shares or by guarantee, with or without share capital or unlimited company every year.

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CS KAUSHIK M JHAVERI 37 .Annual General Meeting vSection 166 (1) of the Companies Act. so specified in the notice calling it. in each calendar year hold an annual general meeting. 1956 states that every company must . provided that not more than 15 months shall elapse between two annual general meeting.

it may hold its first annual meeting in May 2002. Example: Thus . a company may hold its first annual general meeting within 18 months from the date of its incorporation. v In that event it need not hold any annual general meeting in the year of its incorporation or in the following year.2000. CS KAUSHIK M JHAVERI 38 . and that meeting will be deemed to be the annual general meeting for 2000.Annual General Meeting vHowever . if a company is incorporated in December.2001 and 2002.

extend the time within which any annual general meeting (not being the first annual general meeting) shall be held.Annual General Meeting vRegistrar may. by a period not exceeding three months.] CS KAUSHIK M JHAVERI 39 . for any special reason.

CS KAUSHIK M JHAVERI 40 . if consent is accorded thereto(i) in case of an annual general meeting.section(1) .Annual General Meeting Notice of Annual General Meeting vSec 171 (1): A general meeting of a company may be called by giving not less than twenty – one days notice in writing. by all members entitled to vote thereat. vSec 171 (2) : A general meeting may be called after giving Shorter notice than that specified in sub.

Explanation: The AGM should be held during the working hours but it can be extended up to the non working hours also.Annual General Meeting qThe Annual General Meeting shall be held during business hours. on a day not being a public holiday at the registered office of the company or at any other place within the city. CS KAUSHIK M JHAVERI 41 . own or village where the registered office of the company is situated.

• Appointment of Additional Director as Director of the Company. and reports of the Board of Directors’ and auditors • Appointment of Auditors of the company or Re-appointment of Auditor of the company and fixing of their remuneration. • Appointment of directors in place of those retiring • Declaration of Dividend CS KAUSHIK M JHAVERI 42 .Business to be conducted at Annual General Meeting • Consideration of Annual Accounts.

with an annual return along with the filling fees as applicable under the Act. the audited balance sheet and the profit & Loss account shall be filed with the Registrar within sixty days of the date on which the annual general meeting is held.Annual General Meeting qThe proceedings of every annual general meeting along with the Directors’ Report . CS KAUSHIK M JHAVERI 43 .

the Company Law Board may notwithstanding anything in this Act or in the articles of the company.Annual General Meeting • Section 167.power of Company Law Board to call Annual General Meeting • If default is made in holding an annual general meeting in accordance with section 166. CS KAUSHIK M JHAVERI 44 .

Annual General Meeting • on the application of any member of the company call or direct the calling of . CS KAUSHIK M JHAVERI 45 . general meeting of the company and gives such ancillary or consequential directions as the Company Law Board thinks expedient in relation to the calling. holding and conducting of the meeting.

CS KAUSHIK M JHAVERI 46 .Extraordinary General Meeting • Any General Meeting held between two annual general meetings will be called as an extraordinary general meeting. is transacted at an extraordinary general meeting. • Business which arises between two annual general meetings and being urgent and cannot be deferred till the next annual general meeting..

call an extraordinary general meeting. Board of directors of the company shall.as per the provisions of Subsection (1) of section 169 of the Act. CS KAUSHIK M JHAVERI 47 .Extraordinary General Meeting • As per the Regulation 48 of Table A of Schedule I of the Companies Act. the Board may whenever it thinks fit. on the requisition of such number of members as specified in sub – section (4) . forthwith duly proceed to call an EGM. • Further .1956.

• The number of members entitled to requisition a meeting in regard to any matter shall be : 48 CS KAUSHIK M JHAVERI .Extraordinary General Meeting • The requisition shall set out the matters for the consideration of which the meeting is to be called so. shall be signed by the requisitionists. and shall be deposited at the registered office of the company.

Extraordinary General Meeting (a) in case of a company having a Share Capital . such number of them as have at the date of deposit of the requisition not less than one – tenth of the total voting power of all the members having at the said date a right to vote in regards to that matter. not less than one – tenth of such of the paid up capital of the company as at that date carries the right of voting in regard to that matter. CS KAUSHIK M JHAVERI 49 . (b) in case of a company not having share capital . such number of them as hold at the date of the deposit of the requisition.

vSec 171 (2) : A general meeting may be called after giving Shorter notice than that specified in sub. if consent is accorded thereto50 CS KAUSHIK M JHAVERI .section(1) .Extraordinary General Meeting Notice of Extraordinary General Meeting vSec 171 (1): A general meeting of a company may be called by giving not less than twenty – one days notice in writing.

not less than 95 per cent of the total voting power exercisable at that meeting: CS KAUSHIK M JHAVERI 51 . • not less than 95 per cent of such part of the paid-up share capital of the company as gives a right to vote at the meeting.Extraordinary General Meeting • in the case of any other meeting. or • (b) having. by members of the company (a) holding. if the company has a share capital. if the company has no share capital.

Business to be conducted at Extraordinary General Meeting • At an Extra Ordinary general meeting every business is special business • To Increase in Authorised Capital (u/s 94) • Change of Name of the company (u/s 21) • Alteration of Memorandum and Articles of Association(u/s 17 & u/s 31) • To fill the vacancy caused by the resignation of existing auditors [u/s 224[6(a)] CS KAUSHIK M JHAVERI 52 .

subject to the provisions of sections 106 and 107. the Share Capital is divided into different classes of shares. the rights attached to any class (unless otherwise provided by the terms of issue of shares of that class ) may .Class Meetings • Regulation 3 of Table A of Schedule I of the Act provides as under • 1) If at any time . and CS KAUSHIK M JHAVERI 53 .

Class Meetings • whether not the company is being wound up.fourths of the issued shares of that class or with the sanction of Special resolution passed at the separate meeting of the holders of the shares of that class. the provisions of these regulations relating CS KAUSHIK M JHAVERI 54 . be varied with the consent in writing of the holders of three. • 2) To every such separate meeting.

but so that the necessary quorum shall be two persons at least holding or representing by proxy one-third of the issued shares of that class in question • The articles of companies will have to e suitably modified or incorporated depending on the needs of each case.Class Meetings to general meeting shall mutatis – mutandis apply. CS KAUSHIK M JHAVERI 55 .

CS KAUSHIK M JHAVERI 56 .Class Meetings • A Class meeting will have to be convened by the Board of Directors in the same manner as calling any other extraordinary general meeting.

or class of members . to be called. held and conducted in such manner as the court directs though such meetings are not a sine qua non for giving ahead with the sponsored scheme.Meeting of members and Creditors and Notice thereof -.Section 391 (1) (1) • On receiving a Petition the court may a order a meeting of the creditors or class of creditors . • The petition seeks the directions of court for calling of class meetings CS KAUSHIK M JHAVERI 57 .

Meeting of members and Creditors and Notice thereof -. together with a circular and forms of proxy • Notice of the scheme is also given by advertisement in a paper . • At the meetings votings must be by poll and not by show of hands since the statutory majority is concerned with the value of votes CS KAUSHIK M JHAVERI 58 . as directed by the court .Section 391 (1) (1) Notice • Notice convening the meeting are sent out.

CS KAUSHIK M JHAVERI 59 .Section 391 (1) (1) • The court has also to assure that the circular about the details of the scheme which is distributed amongnst the members and creditors should give a fair picture of the proposed scheme.Meeting of members and Creditors and Notice thereof -.

vMinutes are of two types namely qMinutes of narration and qMinutes of resolution CS KAUSHIK M JHAVERI 60 .MINUTES vThe matters which must be covered whilst drafting the minutes of a meeting whether for Board or general meeting have been stated in section 193 of the Act.

Signing of minutes of the previous meeting CS KAUSHIK M JHAVERI 61 • § § . Generally these include minutes covering: Names of those who are present at the meeting.Minutes • Minutes of Narration These are records of events or items of business which do not required formal resolution to establish them.

• Taking note of financial statements. • Recording and tabling and consideration of correspondence. • Taking a note of receipt of notice of interest from the directors.Minutes • Recording leave of absence. CS KAUSHIK M JHAVERI 62 . plans etc. which are tabled and considered at the meeting. reports.

§ Such a resolution may simply cover the resolution passed or alternatively may also indicate the name of the proposer and the seconder in case of AGM & EOGM and showing the quantum of votes with which it was carried. 63 CS KAUSHIK M JHAVERI .Minutes q Minutes of Resolution § These are records of formal decision of directors or shareholders and are prefixed by the word “ RESOLVED”.

CS KAUSHIK M JHAVERI 64 . • Secondly the resolution at the board meeting will be similar to that of a resolution at a general meeting except in case of Board minutes it will indicate that it is subject to the approval of both the shareholders and the Central Government/CLB wherever required.Minutes • The background or preamble of a board resolution will be basically the portion covered by the material facts.

the interest of directors shall be stated in the minutes of the Board meeting as under section 300 of the Companies Act.Minutes • Whereas the resolution passed at a general meeting will only indicate that it is subject to the approval of Central Government/CLB wherever required • Finally . Further interested directors are also not counted for the purpose of quorum. 65 CS KAUSHIK M JHAVERI • . 1956 • interested directors are not to participate in discussing or voting on a resolution in which they are interested or concerned.

CS KAUSHIK M JHAVERI 66 .SIGNING OF MINUTES Generally minutes are signed by the Chairman of the present meeting in which the Board Minutes are placed. But in case if the Chairman of Last Board Meeting is absent in such case Chairman of the Present Board Meeting will signed the Minutes.

can also inspect the Minutes. during the course of an inspection.INSPECTION OF MINUTES • Directors are entitled to inspect Minutes of all Meetings. a member has no right to inspect the Minutes of Meetings of the Board or Committee. CS KAUSHIK M JHAVERI 67 . Members are entitled to inspect the Minutes of all General Meetings. • Unless the Articles otherwise provide. • The Auditor or Cost Auditor • Practising Company Secretary • Officers of the Registrar of Companies • other Government or regulatory bodies duly authorised in this behalf under law.

no matter how simple they are. should be drafted in clear and distinct terms since resolutions embody the decisions of the meetings. • While drafting resolutions both for Board and general meetings: § Surplus or meaningless words or phrases should not be included in resolutions CS KAUSHIK M JHAVERI 68 . Minutes etc § All resolutions .Practical Aspects of Drafting Resolutions.

• A resolution must indicate when it will become effective. • If a resolution is one which requires the approval of the central government or confirmation of the company Law Board/Court. this must be stated in the resolution. CS KAUSHIK M JHAVERI 69 . Minutes etc • Reference to documents approved at the meeting should be clearly identified.Practical Aspects of Drafting Resolutions.

Practical Aspects of Drafting Resolutions. consice and precise and should be flexible only to take care of eventualities . § Where lengthy resolutions have to be approved . Minutes etc § A resolution must confine itself to one subject matter and two distinct matters should not be covered in one resolution. § A resolution should be crisp. they should be divided into CS KAUSHIK M JHAVERI 70 .

Practical Aspects of Drafting Resolutions. Minutes etc § Paragraphs and should be arranged in their logical order having regard to the subject matter of the resolution § A resolution must to be drafted that anybody not present at the meeting or anybody referring to it at a later date will know clearly what the decision was at that meeting without referring to any other document. CS KAUSHIK M JHAVERI 71 .

initialed and dated by the chairman of the meeting within 30 days from the date of meeting . Minutes etc § The Minutes should be drafted and signed. CS KAUSHIK M JHAVERI 72 .Practical Aspects of Drafting Resolutions. § Resolutions must indicate the relevant provisions or sections of the Act and the Rules pursuant to which they are being passed.

Role of Professionals • It is recommended that the Auditors/ Internal Auditors/ Chairman / Company Secretaries with other Functional Head of Senor Management Team should reply the queries of the Shareholders. CS KAUSHIK M JHAVERI 73 .

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