What is a Meeting?

In common parlance, the word meeting means an act of coming face to face,
coming in company or coming together.

A meeting therefore, can be defined as a lawful association, or assembly of two

or more persons by previous notice for transacting some business. The meeting
must be validly summoned and convened. Such gatherings of the members of
companies are known as company meetings.
Essentials of Company Meetings
The essential requirements of a company meeting can be summed up as follows:

1. Two or More Persons: To constitute a valid meeting, there must be two or

more persons. However, the articles of association may provide for a larger
number of persons to constitute a valid quorum.
2. Lawful Assembly: The gathering must be for conducting a lawful business.
An unlawful assembly shall not be a meeting in the eye of law.
3. Previous Notice: Previous notice is a condition precedent for a valid meeting.
A meeting, which is purely accidental and not summoned after a due notice, is
not at all a valid meeting in the eye of law.
4. To Transact a Business: The purpose of the meeting is to transact a business.
If the meeting has no definite object or summoned without any predetermined
object, it is not a valid meeting. Some business should be transacted in the
meeting but no decision need be arrived in such meeting.
Kinds of Company Meetings
The meetings of a company can be broadly classified into four kinds.

1. Meetings of the Shareholders.

2. Meetings of the Board of Directors and their Committees.
3. Meetings of the Debenture Holders.
4. Meetings of the Creditors.
1. Meeting of the Share Holders
The meetings of the shareholders can be further classified into four kinds namely,

1. Statutory Meeting,
2. Annual General Meeting,
3. Extraordinary General Meeting, and
4. Class Meeting.
The chart given below gives a classification of company meetings.

1
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. A private company or a
public company having no share capital need not conduct a statutory meeting.
2. Annual General Meeting
The Annual General Meeting is one of the important meetings of a company. It is
usually held once in a year. AGM should be conducted by both private and
public ltd companies whether limited by shares or by guarantee; having or not
having a share capital. As the name suggests, the meeting is to be held annually
to transact the ordinary business of the company.

3. Extra-ordinary General Meetings (EOGM)

Statutory Meeting and Annual General Meetings are called the ordinary meetings
of a company. All other general meetings other than these two are called
Extraordinary General Meetings. As the very name suggests, these meetings are
convened to deal with all the extraordinary matters, which fall outside the usual
business of the Annual General Meetings.

2
EOGMs are generally called for transacting some urgent or special business,
which cannot be postponed till the next Annual General Meeting. Every business
transacted at these meetings is called Special Business.

Persons Authorized to Convene the Meeting

The following persons are authorized to convene an extraordinary general
meeting.

1. The Board of Directors.

2. The Requisitionists.
3. The National Company Law Tribunal.
4. Any Director or any two Members.
4. 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.

Class meetings are generally conducted when it is proposed to alter, vary or

affect the rights of a particular class of shareholders. Thus, for effecting such
changes it is necessary that a separate meeting of the holders of those shares is to
be held and the matter is to be approved at the meeting by a special resolution.

For example, for cancelling the arrears of dividends on cumulative preference

shares, it is necessary to call for a meeting of such shareholders and pass a
resolution as required by Companies Act. In case of such a class meeting, the
holders of other class of shares have no right to attend and vote.

2. Meetings of the Directors

Meetings of directors are called Board Meetings. These are the most important as
well as the most frequently held meetings of the company. It is only at these
meetings that all important matters relating to the company and its policies are
discussed and decided upon.

Since the administration of the company lies in the hands of the Board, it should
meet frequently for the proper conduct of the business of the company. The
Companies Act therefore gives wide discretion to the directors to frame rules and
regulations regarding the holding and conduct of Board meetings.

The directors of most companies frame rules concerning how, where and when
they shall meet and how their meetings would be regulated. These rules are
commonly known as Standing Orders.
3
3. Meetings of Debenture Holders
The debenture holders of a particular class conduct these meeting. They are
generally conducted when the company wants to vary the terms of security or to
modify their rights or to vary the rate of interest payable etc. Rules and
Regulations regarding the holding of the meetings of the debenture holders are
either entered in the Trust Deed or endorsed on the Debenture Bond so that they
are binding upon the holders of debentures and upon the company.

4. Meetings of the Creditors

Strictly speaking, these are not meetings of a company. They are held when the
company proposes to make a scheme of arrangements with its creditors.
Companies like individuals may sometimes find it necessary to compromise or
make some arrangements with their creditors, In these circumstances, a meeting
of the creditors is necessary.

4
 Procedure for calling annual general meeting
A Company is a separate legal entity different from its members. So, its affairs
are generally done by Board of Directors. The Board of directors provides a road
map within its limited power for the progress of a Company. Certain powers are
controlled by the boards after getting consent of the company at their general
meeting. The shareholders as the owner of the company control over the
proceeding of the meeting. The Annual General Meeting gives them opportunity
to know the condition of the company and also make suggestion for its
improvement and progress.
Annual General Meeting:-
As per Section 96 of the Companies Act , 2013,
 Every Company other than One person Company must hold a general meeting in
each year apart from other meetings as Annual General Meeting (AGM).
 Every Company has to set up a managing Committee to run its smooth working
of managerial works.
 Every Company , apart from One person Company ( OPC ) must have to hold in
addition to other meetings, by giving a notice about the meeting, not more than
15 months in between the date of AGM to the next. A Company may hold its
first AGM within the period of 9 months from closing of its first financial year
otherwise in other cases within the period of 6 months. [Section 96(1) of the
Companies Act,2013]
As per the above , if a company hold its meeting, then it has no need to call an
AGM in the year of its incorporation.
However , the registrar may extend the period within any AGM ( not being the
first AGM) shall be held, not exceeding 3 months under section 96(1).
 Every AGM shall be called during business hours ( i.e. 9 a.m. to 6 p.m.) on any
day not a national day declared by the Central Government , and also held I the
registered office or in any place within the city ,village, or town in which the
registered office is situated.
 According to Section 129(2), at every AGM board of directors of the company
shall lay before the meeting financial statement for the financial year.
 Moreover, Section 129(3) says, where the company has one or more subsidiaries,
then they have to prepare in addition to the statement under section 129(2) a
consolidated financial statement and of all subsidiaries in same format and also

5
 present before the AGM of the Company with the prescribed statement under
section 129(2).
 There is no provision for extension of 1st AGM but in other cases it can be
extended for period of three months by ROC.[ Second proviso to Section 96 of
the Companies Act,2013]. However , if such first AGM is not held, NCLT can
order holding of General Meeting under section 97 of the Act. Application for
extension of time should be submitted electronically in e-form no. 61.
 After the ending of the financial year i.e. 31 st March, all the auditing processes
must be completed within three-four months. But the AGM must be held within
six months from the closing date of financial year. A notice of 21 days has to be
sent to all members. So, the audited accounts, directors report has to be closed on
31st March and been posted by first week of September.
 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.
a. Consideration of financial Statements and reports of board of directors and
Auditors.
b. Declaration of any Dividend
c. Appointment of directors in place of retiring one
d. 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:
6
 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.

7
Role of liquidator in winding up of company
1. To conduct proceedings in winding up:
The liquidator shall conduct the proceedings in winding up the company and
perform such duties in reference thereto as the court may impose. The acts of the
liquidator shall be valid, notwithstanding any defect that may afterwards be
discovered in his appointment or qualifications (Sec. 457)

2. To submit preliminary report:

Immediately on the receipt of the Statement of Affairs from the directors and
within six months after the date of the winding up order, liquidator shall submit
to the court a preliminary report with regard to capital issued, subscribed and
paid, the estimated amount of assets and liabilities, causes of the failure of the
company and whether in his opinion, fraud and punishable offence have been
committed by directors and other officers of the company (Sec. 455).

3. Collection and distribution of company’s property:

Immediately after the winding up order is made by the court, all the property and
assets of the company shall vest in the liquidator. He shall have the rights to
enjoy control on all the properties of the company.

He shall collect all the assets of the company, prepare schedules of creditors and
contributories and distribute proportionately the total realisations made by him
amongst the creditors (Sec. 456).

4. To obey the order of the court:

Throughout the performance of his duties, Official Liquidator shall not only obey
the orders and carry out the advice and directions of the court but shall also care
to see that his actions do not come out to be ultra vires the provisions of the
company law. He shall carry out his duties most honestly and faithfully. He shall
also take into account the directions given to him by the resolutions of the
creditors or contributories.

5. Meetings of creditors and contributories:

The liquidator may call the meetings of creditors and contributories whenever he
may deem fit for the purposes of ascertaining their wishes. But he shall have to
summon such meetings at such times as the creditors or contributories may by
resolution direct or whenever requested in writing to do so [Sec. 460 (3)].

8
6. To maintain proper books:
The liquidator shall keep, in the manner prescribed, proper books in which he
shall cause entries or minutes to be made of the proceedings at meetings and of
such other matters as may be prescribed. Any creditor or contributory may,
subject to the control of the court, inspect any books personally or by his agent
(Sec. 461).

7. To account for money received by him:

Official Liquidator shall pay all cash collections made by him into the public
account of India in the Reserve Bank of India. He shall present to the court twice
a year an account of his receipts and payments as liquidator.

The account shall be in prescribed form and shall also be verified by a

declaration in the prescribed form. The court shall cause the account to be
audited in a manner as it thinks fit

8. Appointment of committee of inspection:

The liquidator will have to appoint a Committee of Inspection to assist him if the
court so directs. He should convene a meeting of the creditors within two months
from the date of the court’s direction for the purpose of determining who are to
be the members of the committee.

He should also within fourteen days of the creditors’ meeting, convene a meeting
of the contributories to consider the decision of the creditors’ meeting with
respect to the membership of the committee. In case the contributories do not
accept die decision of the creditors’ meeting in its entirety, the liquidator should
apply to the court for directions regarding the composition of the committee (Sec.
464).

9. Information as to pending liquidation:

If the winding up of a company is not completed within one year after its
commencement, the liquidator shall within two months of the expiry of such year
and thereafter until the winding up is concluded at intervals of not more than one
year, file a statement in the prescribed form and containing the prescribed
particulars regarding proceedings in and position of liquidation. The statement
should be duly audited by a person qualified to act as an auditor of the company.

9
Compulsory winding up under the order of tribunal
The winding up of a company is the last stage of a companies’ existence. There
may be several reasons for winding up of the company including mutual
agreement among stakeholders, loss, bankruptcy, death of promoters etc.
Winding up is the process by which the company is put to an end that is the
process through which its corporate existence is ended and it is thereafter finally
dissolved. As per section 270 of the Companies Act, 2013 a company can be
wound up either by a tribunal or by way of voluntary winding up. The provisions
of the act lay down proper procedures for the winding up of a company.

Winding Up By A Tribunal
Winding up of a company takes place by a tribunal by appointing a liquidator if
the company is unable to pay its debts or the company has passed a special
resolution to that effect or the company is acting against the interest or morality
of India, security of state, or has spoiled any kind of friendly relations with
foreign or neighboring countries or the company has not filed the financial
statements or annual returns for preceding five consecutive years or it is deemed
just and equitable to the tribunal to wind up the company or the company has
undertaken fraudulent activities or any other unlawful business or any person or
management connected with the formation of company is found guilty of fraud
or any kind of misconduct.
Under section 272 of the companies act, the petition for winding up of a
company in any of the circumstances stated above can be filed by any of the
following parties-
Such winding up petition shall be filed in form no. 1, 2 or 3, as required along
with the statement of affairs in form no. 4. The statement of affairs shall contain
facts up to specific date which shall not be more than 15 days prior of the date on
which the statement of affairs is filed. Also, it shall be certified by a certified
chartered accountant.
1.
o Company
o Creditors
o Contributory or contributories
o Central or state government
o Registrar of Companies
o Any other person authorized by the central government for that purpose
2. Voluntary Winding Up Voluntary winding up of a company takes place
by mutual agreement of the members of the company. Voluntary winding
10
 up may take place either by passing of a special resolution or by passing an
ordinary resolution by the members as a result of expiry of its time period
as fixed by the Articles of Association or the completion of the project or
event for which it was constituted. The companies have to comply with the
following procedure for winding up as provided by the Companies act,
2013-
o The company shall conduct a meeting with at least two directors with the
agenda to initiate winding up of the company. The directors shall ensure
that the company does not have any third party debts or it will be able to
repay its debts in case it’s wound up.
o The company shall issue a written notice in this regard to conduct a general
meeting of all the shareholders for passing a resolution for the same.
o The company in the general meeting shall pass an ordinary resolution to
wind up the company by simple majority or special majority of 3/4th
members.
o After passing the resolution, the company shall conduct a meeting of all the
creditors. If majority of creditors are of the opinion that winding up would
be beneficial for the company, the company may proceed with the same.
o Within 10 days of the passing of the resolution, the company shall file a
notice of winding up with the registrar of companies for appointment of an
official liquidator.
o Within 14 days of the passing of the resolution, the company shall give a
notice regarding winding up of the company in the official gazette as well
as advertise it in the newspaper.
o Within 30 days of the passing of the resolution, the company shall file the
certified copies of ordinary or the special resolution passed in the general
meeting as the case may be.
o The company shall wind up the affairs of the company and prepare the
liquidators account and get the same audited.
o The company shall again conduct a general meeting in furtherance of the
winding up objective.
o In the general meeting, the company shall pass a special resolution for the
disposal of books and all necessary documents.
o With 15 days of the passing of the resolution, the company shall submit the
copy of accounts and file an application for winding up in the tribunal for
passing the order for dissolution of the company.
o The tribunal shall, if satisfied with the documents submitted by the
company, pass an order within 60 days to effect of dissolution of the
company.

11
o After the order to this effect has been passed by the tribunal, the official
liquidator shall file a copy of the order with the registrar of companies.
o After receiving the order passed by tribunal, the registrar shall then publish
a notice in the official Gazette declaring that the company is dissolved.
3. Winding up subject to Supervision of the Court Winding up under the
supervision of the court if often confused with winding up by a tribunal. In
such a situation, the court only supervises the winding up proceedings
subject to certain terms and conditions imposed by the court. The court
gives the liberty to the stakeholders to file a winding up petition even when
the company is being wound up voluntarily. However, the Petitioner must
prove that voluntary winding up cannot continue with fairness to all
concerned parties. The liquidator then appointed by the court must submit a
report with the registrar of companies in every three months showing the
progress of liquation.

12
13
Definition of member

(1) The subscribers of the memorandum of a company shall be deemed to have

agreed to become members of a company, and on its registration, shall be entered
as members in its register of members.

(2) Every other person who agrees in writing a become a member of a company

Section 42

Membership of holding company

(1) Except in the cases mentioned in this section, a body corporate cannot be a
member of a company which is its holding company and any allotment or
transfer of shares in a company to its subsidiary shall be void.

(2) Nothing in this section shall apply –

(a) Where the subsidiary is concerned as the legal representative of a deceased

member of the holding company; or

(b) Where the subsidiary is concerned as trustee, unless the holding company or a
subsidiary thereof is beneficially interested under the trust and is not so interested
only by way of security for the purposes of a transaction entered into by it in the
ordinary course of a business which includes the lending of money.

(3) This section shall not prevent a subsidiary from continuing to be a member of
its holdings company if it was a member thereof either at the commencement of
this Act or before becoming a Subsidiary of the holding company, but except in
the cases referred to in sub-section (2), the subsidiary shall have no right to vote
at meetings of the holding company or of any class of members thereof.

(4) subject to sub-section (2), sub-sections (1) and (3) shall apply in relation to a
nominee for a body corporate which is a subsidiary, as if references in the said
sub-sections (1) and (3) to such a body corporate included references to a
nominee for it.

(5) In relation to a holding company which is either a company limited by

guarantee or an unlimited company, the reference in this section to shares shall,
whether or not the company has a share capital, be construed as including a
reference to the interest of its members as such, whatever the form of that
interest.

14
How to become a member

A person may become a member so a company in the following ways:

1. Member of subscription: the subscribers of the memorandum of association of

a company are demined to have agreed to become it member in the register of
member (sec.41 (1)).Neither application nor allotment of shares is necessary.

2. Members by application and registration: apart from the subscribed of

memorandum, every other person who agrees in writing to become a member
and whose name is entered in the register of member is by the company’s act
1960.

3. Members by qualifying shares: The company act 1956 does not require
directors to hold any shares at all. If Article of association of a company require a
person to hold qualification shares then he can be appointed as the director only
if he is takes or signs an undertaking to take ant pay for the qualification share
(sec.299(1)(b))he thus become a member of the company is sec.(266(2)).

Cessation of membership

1. Cessation of membership by an act of the parties

A person may cease to be the member of the company:

If he transfers his shares to another person.

If his shares are forfeited

If the company sells his share under some provision in the article

If he rescinds the contract to take shares on the ground of misrepresentation in

the prospectus or on the ground of irregular allotment

If redeemable preference share are redeemed

If he surrender his share .were surrendered in permitted

If she warren r issued to him is exchange of fully paid shares

2. Cessation of membership by operation of law

15
Insolvency The shares of an insolvent vest official receiver or assignee then the
official receiver or assignee transfers his shares to another person ,the insolvent
ceases to be a member on the registration of the transfer as an member. But the
insolvent remains a member as long as his name appears in the register of the
company.

Death. The desisted member’s estate however remains liable until the share is
registered in the name of his legal representative.

Sale of share in execution of a decree of court

Winding up of a company. During the winding up of a company a member

continuous to b liable as a contributory and it is also entitled to share in the
surplus asset if any.

Rights of members

Statutory right:

There are the rights which are conferred on the member by the company act.
These rights cannot be taken away or modified by any provision in the
memorandum or the article.

Documentary right:

There are the right given to the member by the memorandum and article of
association.

Legal right :

These are the right given to the member by the general law.

Proprietary right :

The right to participate ratably in dividend distribution when ordered in the

discretion of the directors.

Remedial right :

The right to information and information and inspection of company record.

Liability of members

The liability of the member of a company depends on the nature of the company.
16
Company with unlimited liability: Each member is liable in full for all the debts
contracted by the company during the period he was a member.

Company limited by shares: Each member is liable to pay the full nominal value
of the share held by him. If he has already paid a part of the amount on the shares
his liability is limited to the unpaid amount on the shares in respect of which he
is a member.

Company limited my guaranty: Each member is liable to contribute the amount

guarantee by him to b paid in the event of winding up of the company.

17