‭Directorate of Open and Distance Learning‬

‭Guru Nanak Dev University‬

‭Project Report for Subject Code (ODMBA-309S) for Session‬
‭2023-24 (Nov-2023)‬

‭S.No‬ ‭Name of the student‬ ‭MANAN JAIN‬

‭.‬

‭1‬ ‭Father’s name‬ ‭SH. SANDEEP JAIN‬

‭2‬ ‭Student ID/Roll No.‬ ‭29012236301‬

‭3‬ ‭Class (Sem.)‬ ‭MBA ODL 3RD SEM‬

‭4‬ ‭Subject (course) Code‬ ‭ODMBA-309S‬

‭5‬ ‭Subject (Course) name‬ ‭SEMINAR‬

‭6‬ ‭Learner Support Centre‬ ‭JALANDHAR ODL OFFICE‬

‭7‬ ‭Topic‬ ‭COMPANY MEETINGS‬

‭8‬ ‭No. of Pages‬ ‭34‬

‭9‬ ‭Students Signature & Date‬ ‭MANAN JAIN 03/12/2023‬

‭1‬
‭Company meeting : an overview‬
‭ company meeting means two or more individuals coming together to carry‬
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‭out a legitimate business or to take decisions on the same, like any other group‬
‭of people flocking together for a particular purpose. Now, in order to carry out‬
‭the business of the company properly, it becomes necessary for the directors‬
‭and shareholders of companies to meet as often as necessary and to take‬
‭unanimous decisions based on their viewpoints and discussions. Simply put, it is‬
‭crucial for companies to hold meetings for the effective functioning of the‬
‭company. These meetings hold great importance in the decision-making‬
‭process.‬

‭ oreover, shareholders, who are the owners of the company, have the right to‬
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‭have proper discussions on the affairs of the company and to further exercise‬
‭their rights in matters relating to the ongoing activities and future of the‬
‭company. Conducting meetings provides this chance to the shareholders and‬
‭also gives them an opportunity to keep a check on the activities of the board of‬
‭directors, as the directors are obligated to adhere to the decisions taken in the‬
‭meetings of shareholders. Also, the management of the company is vested in‬
‭the hands of shareholders; hence, it is important that they meet on a regular‬
‭basis to take unanimous decisions and function effectively as a team.‬

‭Now let us have a look at some of the important aspects of company meetings.‬

‭Meaning and definition of company meetings‬

‭ here is no definition of the term “meeting”‬‭per se‬‭in the‬‭Companies Act, 2013‬‭;‬

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‭in plain language, a company can be defined as two or more individuals coming‬
‭together, gathering, or assembling either by prior notice or unanimous decision‬
‭for discussing and carrying out some legitimate activities related to business. A‬
‭company meeting can be said to be a concurrence or meeting of a quorum of‬
‭members to carry out ordinary or special business and take decisions on‬
‭important matters of the company.‬

‭Why are company meetings held‬

‭2‬
‭ efore we read about the types of company meetings, let’s take a look at why‬
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‭exactly company meetings are conducted.‬

‭Control management function‬

‭ ompany meetings play a crucial role in controlling the management functions‬

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‭of a company.‬

‭Control the affairs of the company‬

I‭ n a company, the directors are accountable to the shareholders. Directors have‬

‭been entrusted with the duty to run the business and manage the day-to-day‬
‭affairs of the company. By holding meetings, the affairs of the company are‬
‭controlled.‬

‭Future policies‬

‭ hrough meetings, the past policies and experiences of a company can be‬
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‭discussed, and new future policies can be fixed. As stated above, directors are‬
‭answerable to shareholders, so via such meetings, the shareholders can learn‬
‭about the affairs of the company. The rights of shareholders include:‬

‭ .‬ ‭Inquiring regarding the affairs of the company,‬

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‭2.‬ ‭Criticising the function of the company,‬
‭3.‬ ‭Have effective control on the board.‬

‭Important definitions of company meetings‬

I‭ n the case of‬‭Sharp v. Dawes (1971)‬‭, a meeting is‬‭defined as “‬‭an assembly of‬
‭people for a lawful purpose‬‭” or “‬‭the coming together‬‭of at least two persons for‬
‭any lawful purpose‬‭.”‬

‭ urther, according to P.K. Ghosh, “‬‭any gathering,‬‭assembly, or coming together‬

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‭of two or more persons for the transaction of some lawful business of common‬
‭concern is called meeting‬‭.”‬

‭ oreover, according to K. Kishore, “‬‭a concurrence or coming together of at least‬

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‭a quorum of members by previous notice or mutual agreement for transaction‬
‭business for a common interest is a meeting‬‭.”‬
‭3‬
‭Essence in context with the aforementioned definitions‬

‭From the above definitions, we can infer the following:‬

‭Number of individuals‬

I‭ n a meeting, there must be two or more individuals. The number of members‬

‭attending the meeting may be small, large, or extremely large, depending on‬
‭the type of meeting. In the case of a committee meeting, the total count of‬
‭members may be small, whereas in the case of an annual general meeting of‬
‭any public company, the total number may be large, and in the case of public‬
‭meetings, the total count may be very huge.‬

‭Definite place‬

‭ here must be a specific place for the meeting. In the case of official meetings,‬
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‭the meeting must be conducted in the office. Further, in the case of big‬
‭meetings that entail a huge involvement of members, like the annual general‬
‭meeting of a public company, the meeting can be held in a public hall. Also,‬
‭public meetings can be held in public halls, on open grounds, or even on roads,‬
‭if required.‬

‭Fixed date and time‬

‭ hile conducting a meeting, it is necessary to decide on a date and time. In the‬

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‭case of official meetings, the date chosen to conduct the meeting is often a‬
‭working day, and the time is within office hours; however, there can be‬
‭restrictions in matters related to the date and time under the Companies Act.‬

‭Discussion‬

‭ here has to be some discussion while conducting the meeting, meaning the‬
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‭individuals in the meeting must put forth their viewpoints and opinions on the‬
‭agenda of the meeting.‬

‭Predetermined topics‬

‭ sually, in company meetings, the topics or subject matter of the meeting are‬
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‭already notified to the participants, so they can come prepared with their‬
‭viewpoints on the same.‬

‭4‬
‭Decisions‬

‭ he decisions for the agenda are generally taken in the meeting itself, as getting‬
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‭to a conclusion is the main objective of conducting the meeting. The decisions‬
‭occurring in the meeting are binding on the members of the company,‬
‭irrespective of whether they were able to attend the meeting or not, were‬
‭present or not, or even if they agree with or oppose the inference thus reached.‬

‭ he decisions are taken either through votes or in the form of resolutions. Also,‬
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‭there are distinct ways of voting. Usually, decisions are not taken at public‬
‭meetings, and if they are, they are not binding in any manner whatsoever.‬

‭Types‬

‭Meetings can be of different types, namely:‬

‭ .‬ ‭Private,‬
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‭2.‬ ‭Public, or‬
‭3.‬ ‭International (like U.N.O.)‬

‭ he types of company meetings, which can be private or public, are discussed in‬
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‭depth below.‬

‭General notes‬

‭1.‬ ‭The meeting does not take place automatically. A meeting has to be‬
‭called or convened. In simple words, a notice has to be sent to every‬
‭individual with the authority to attend the meeting.‬
‭2.‬ ‭In the case of a public meeting, general publicity is necessary. Every‬
‭type of meeting has its own procedure to be followed.‬
‭3.‬ ‭An accidental meeting of two or more individuals will not be referred to‬
‭as a meeting.‬
‭4.‬ ‭The secretary is responsible for calling and informing the members and‬
‭conducting the meeting.‬

‭Importance of company meetings‬

‭ eetings hold great value in our daily social lives. This is a democratic process‬
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‭that is quite essential in the decision making of any organisation, be it a‬

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‭ ompany, a club, or even an association. Further, group discussions play a‬
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‭major role in:‬

‭ .‬ ‭Introducing changes in the company,‬

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‭2.‬ ‭Decision making, and‬
‭3.‬ ‭Improves the relations between an employer and his employee.‬

‭ he object and methods of conducting different types of meetings are different.‬

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‭Each of them is discussed in detail in the upcoming passages.‬

‭ urther, the following are some noteworthy‬‭pointers‬‭on the importance of‬

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‭holding company meetings:‬

‭1.‬ ‭Meetings are a crucial part of managing a company, as stated under‬

‭the‬‭Companies Act, 1956.‬
‭2.‬ ‭The consent of the members of the company, commonly known as‬
‭shareholders, is obtained at the general meetings held by the‬
‭company.‬
‭3.‬ ‭If any mistake is committed by the board of directors, the shareholders‬
‭have the authority to rectify it at the meetings of the company.‬
‭4.‬ ‭Shareholder’s meetings are held by the shareholders to give a final say‬
‭on their decisions on the measures taken by the board of directors.‬
‭5.‬ ‭Meetings help enlighten the shareholders to know about the recent‬
‭happenings and procedures of the company and enable them to‬
‭deliberate on some matters.‬
‭6.‬ ‭There are several criteria that have to be fulfilled in matters relating to‬
‭the calling, convening, and conduct of the meetings.‬

‭Components of a valid company meeting‬

‭A company meeting generally consists of the following:‬

‭Participants‬

‭ he first and foremost requirement of a meeting is to have participants. In the‬

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‭case of a private meeting, only the individuals having the authority to attend‬
‭the meeting, like the members of the organization, the committee, the‬
‭sub-committee and the people who have received an invitation, can participate.‬
‭At times, in the event of the non-availability of such a person, he has the right‬

‭6‬
t‭ o send his representative or proxy on their behalf. Whereas, in the case of‬
‭public meetings, the general public has the authority to attend them.‬

‭Chairman‬

‭ or a valid company meeting, there has to be a chairman at every meeting who‬

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‭has the authority and duty to carry on the meeting effectively.‬

‭Secretary‬

‭ he secretary of the organisation, committee, sub-committee etc., is entrusted‬

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‭with several duties right from the beginning to the very end of the meeting. He‬
‭plays a crucial role in carrying out such meetings.‬

‭Invitees‬

‭ part from those who have the authority to attend the meeting, there are some‬
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‭people who are invited, for instance, the press reporters.‬

‭Material elements‬

‭ nother major component of the meeting involves material elements. The‬

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‭material elements include:‬

‭ .‬ ‭The sitting arrangement,‬

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‭2.‬ ‭The materials for writing, etc.‬

‭General provisions to know about conducting valid‬

‭company meetings‬

‭Proper authority to convene meetings‬

I‭ n order for a meeting to be regarded as valid, it must be called by a proper‬

‭authority, like the board of directors. In a valid board meeting, the decision to‬
‭convene a general meeting and issue notice in this regard must be taken by‬
‭passing a resolution.‬
‭7‬
‭Notice‬

‭ or a meeting to be conducted properly, a proper notice must be issued by the‬

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‭proper authority. It means that such a notice must be drafted properly‬
‭according to the provisions laid down under the Companies Act, 2013. Also,‬
‭such a notice must be duly served on all the members who are entitled to‬
‭attend and vote at the meeting. Moreover, the valid notice of the company must‬
‭specifically mention the place, the day, the time, and the statement of the‬
‭business to be transacted at the meeting.‬

‭Quorum‬

‭ quorum is defined as the minimum number of members that are required to‬
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‭be present as mentioned under the provisions of a particular meeting. Any‬
‭business transaction carried out at a meeting without a quorum shall be deemed‬
‭to be invalid. The main object of having a quorum is to avoid taking decisions by‬
‭a small minority of members that may not be accepted by the vast majority.‬
‭Every company meeting has its own number of quorum, the same has been‬
‭discussed under separate headings in the upcoming passages.‬

‭Agenda‬

‭ he agenda can be described as the list of businesses to be transacted while‬

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‭conducting any meeting. An agenda is important for carrying out a business‬
‭meeting in a systematic manner and in a proper, predetermined order. An‬
‭agenda, along with a notice of the meeting, is usually sent to all the members‬
‭who are entitled to attend a meeting. The discussion in the meeting has to be‬
‭conducted in the same manner as stated in the agenda, and changes can be‬
‭made in the order only with the proper consent of the members at the meeting.‬

‭Minutes‬

‭ he minutes of the meetings contain a just and accurate summary of the‬

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‭proceedings of the meeting. Minutes of the meetings have to be prepared and‬
‭signed within 30 days of the conclusion of the meeting. Further, the minutes‬
‭books must be kept at the registered office of the company or any place where‬
‭the board of directors has given their approval.‬

‭8‬
‭Proxy‬

‭ he term ‘proxy’ can be used to refer to a person who is chosen by a‬

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‭shareholder of a company to represent him at a general meeting of the‬
‭company. Further, it also refers to the process through which such an individual‬
‭is named and permitted to attend the meeting.‬

‭Resolutions‬

‭Business transactions in company meetings are carried out in the form of‬
‭resolutions. There are two kinds of resolutions, namely:‬

‭ .‬ ‭Ordinary resolution, and‬

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‭2.‬ ‭Special resolution.‬

‭Types of company meetings‬

‭ ompany meetings are majorly divided into three categories, and the three‬
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‭categories are further divided into subcategories, which are again divided into‬
‭some categories. Let us have a look at the categories.‬

‭ .‬ ‭Meetings of shareholders or members‬

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‭2.‬ ‭General meeting which is further divided into:‬
‭1.‬ ‭Statutory meeting,‬
‭2.‬ ‭Annual General Meeting,‬
‭3.‬ ‭Extraordinary General Meeting.‬
‭4.‬ ‭Class meeting.‬

‭Meetings of Directors‬

‭ .‬ ‭Board of directors meeting,‬

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‭2.‬ ‭Committee of directors meeting.‬

‭Other meetings that are categorized as:‬

‭ .‬ ‭Debenture holders meeting,‬

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‭2.‬ ‭Creditors meeting, and‬

‭9‬
 ‭3.‬ ‭Creditors and contributors meeting.‬

‭ efore we dive deep into the nitty-gritty of each of the categories, here is a‬
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‭pictorial representation of the types of company meetings for your better‬
‭understanding-‬

‭ ow that we have seen the pictorial representation of company meetings, let us‬
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‭have a look at each of the meetings in a more detailed manner.‬

‭Meetings of shareholders or members‬

‭ he first main type of meeting is a meeting of shareholders or members of the‬

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‭company. It is further divided into two categories, namely:‬

‭ .‬ ‭General meeting, and‬

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‭2.‬ ‭Class meeting.‬

‭10‬
‭ he first category is further divided into three subcategories, each of which is‬
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‭discussed in detail below.‬

‭General meeting‬

‭ he general meeting is subdivided into three categories. Let us have a look at‬
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‭the nitty-gritty of each of them.‬

‭Statutory meeting‬

‭ lease note: Before the enactment of the Companies Act, 2013, the‬
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‭requirements laid down for statutory meetings and reports under‬
‭Section 165 were legit. However, after its enactment, the same has‬
‭been dropped.‬

‭The following is just for the readers’ information.‬

‭What is statutory meeting‬

‭ statutory meeting is a type of general meeting that must be held by every‬

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‭company limited by shares and every company limited by guarantee with a‬
‭share capital within not less than a month and not more than six months from‬
‭the date it was incorporated. Private companies are exempt from conducting a‬
‭statutory meeting. In this meeting, a report known as the ‘statutory report’ is‬
‭discussed by the directors of the company.‬

‭Which companies do not need to conduct a statutory meeting‬

‭ he following companies do not have any obligation to conduct a statutory‬

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‭meeting:‬

‭ .‬ ‭Private company,‬
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‭2.‬ ‭Company limited by guarantee having no share capital,‬
‭3.‬ ‭Unlimited liability company,‬
‭4.‬ ‭A public company that was registered as a private company earlier,‬
‭5.‬ ‭A company that has been deemed as a public company under Sec. 43‬
‭A.‬

‭What is notice of the meeting‬

‭11‬
‭ he board of directors of a company is duty-bond to forward a notice of the‬
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‭meeting to all the shareholders or members of the company. This has to be‬
‭done at least 21 days prior to holding the meeting, and an explicit mention of‬
‭‘statutory meeting’ of the company has to be made in the notice. If the board of‬
‭directors does not name it the ‘statutory meeting’, it will be a breach of the‬
‭provision.‬

‭What is statutory report‬

‭ ow that a mention of the statutory report was made above, you might wonder,‬
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‭what exactly is it? Let’s find out.‬

‭ he board of directors is obliged to forward a report known as the ‘statutory‬

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‭report’ at least 21 days before the date of the statutory meeting. A copy of the‬
‭report has to be forwarded to the registrar for registration. This report has to be‬
‭drafted by the board of directors of the company and certified and amended by‬
‭at least two of them.‬

‭What are the particulars of a statutory report‬

‭ nder Section 165(3) of the Companies Act, 1956, a prior mention of the‬
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‭contents of a statutory report has been made; it says the report must‬‭contain‬‭:‬

‭ .‬ ‭The total number of fully paid-up and partly paid-up shares allotted‬
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‭2.‬ ‭The sum of the amount of cash received by the company with respect‬
‭to the shares;‬
‭3.‬ ‭Information on the receipts, distinguishing them on the basis of their‬
‭sources and mentioning the amount spent for commission, brokerage,‬
‭etc.‬
‭4.‬ ‭The names of the directors, auditors, managers and secretaries along‬
‭with their address and occupation, and changes of their names and‬
‭addresses, if any.‬
‭5.‬ ‭The particulars of agreements that are to be presented in the meeting‬
‭for approval, with suggested amendments, if any.‬
‭6.‬ ‭The justifications in cases where any underwriting agreement was not‬
‭executed.‬
‭7.‬ ‭The arrears due on calls from directors and other individuals.‬
‭8.‬ ‭The details on the amount of honoraria paid to the directors, managers‬
‭and others for selling shares or debentures.‬

‭What is the procedure to carry out a statutory meeting‬

‭12‬
‭ ow that we know about the statutory report and its particulars, you might‬
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‭wonder what the proper procedure is for conducting a statutory meeting. The‬
‭answer is in the below pointers.‬

‭ he board of directors has to send a statutory report to every member of the‬

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‭company, as mentioned above. The members who attend this meeting may‬
‭carry out discussions on matters relating to the formation of the company or‬
‭matters that are incorporated in the statutory report. Below are some of the‬
‭points one must note:‬

‭ .‬ ‭While conducting the statutory meeting, no resolution can be taken.‬

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‭2.‬ ‭The main motive of conducting such a meeting is to familiarize all the‬
‭members of the company with matters relating to the development and‬
‭origination of the company.‬
‭3.‬ ‭The shareholders, perhaps, the members of the company, will receive‬
‭particulars relating to the following:‬
‭●‬ ‭Shares taken up,‬
‭●‬ ‭Money received,‬
‭●‬ ‭Contracts entered into,‬
‭●‬ ‭Preliminary expenses incurred, etc.‬
‭4.‬ ‭The members or shareholders also have the opportunity to carry out a‬
‭discussion on several business ideas and ways to prosper the business,‬
‭along with the future prospects of the company.‬
‭5.‬ ‭Moreover, if a decision is not reached at the statutory meeting, an‬
‭adjournment meeting is called.‬
‭6.‬ ‭According to Section 433 of the Companies Act, 1956, if the company‬
‭errs in submitting the statutory report or in conducting the statutory‬
‭meeting within the specified time, it may be subjected to winding up.‬
‭7.‬ ‭However, the court, instead of directly winding up the company, has‬
‭the authority to instruct the company to submit a statutory report and‬
‭conduct a statutory meeting, along with levying a fine on the‬
‭individuals who erred in conducting the meeting.‬

‭What will be the effect of non-compliance with the provisions on conducting a‬

‭statutory meeting‬

‭ he following are the repercussions of not complying with the provisions on‬
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‭conducting a statutory meeting:‬

‭1.‬ ‭If there is any mistake in complying with the provision for holding a‬
‭statutory meeting under Section 165, the directors or other officers of‬

‭13‬
 t‭ he company who are at fault will be liable to pay a fine that is‬
‭extendable up to ₹500.‬
‭2.‬ ‭Under Section 43(6) of the Companies Act, 1956, in case the company‬
‭errs in conducting the statutory meeting or if the statutory report is not‬
‭in compliance with the provisions of the Act, the company may be‬
‭compulsorily wound up if the court orders the same. However, under‬
‭Section 443(3) of the Companies Act, 1956, the court may pass an‬
‭order to conduct a statutory meeting or to send the statutory report,‬
‭as the case may be, instead of winding up the company.‬

‭ efore we study the annual general meeting (AGM) and extraordinary‬

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‭general meeting (EGM), let us have a look at the key differences‬
‭between them in a tabular format. This is done for a better‬
‭understanding of the topics.‬

‭Basis‬ ‭Annual general meeting (AGM)‬ ‭ xtraordinary general‬

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‭meeting (EGM)‬

‭What is it?‬ ‭ n annual general meeting,‬

A ‭ n extraordinary‬
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‭commonly known as an AGM, is‬ ‭general meeting (EGM),‬
‭a regular meeting held annually.‬ ‭is a meeting other than‬
‭an AGM.‬

‭Applicability‬ ‭ GMs are applicable to all the‬

A ‭ imilarly, EGMs are‬
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‭companies.‬ ‭applicable to all‬
‭companies.‬

‭ ime of holding‬ A
T ‭ n AGM has to be held within six‬ ‭An EGM can be held at‬
‭the meeting‬ ‭months of the close of the‬ ‭ ny time.‬
a
‭financial year.‬

‭Purpose‬ ‭ n AGM is held to serve the‬

A ‭ hereas, an EGM is to‬
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‭following purposes: Electing the‬ ‭be held for any matter‬
‭directors of the company,Passing‬ ‭for which a proper‬
‭of annual accounts, Declaring‬ ‭notice is given.‬
‭the dividends, and Appointing‬
‭auditors.‬

‭14‬
 ‭ ho may call‬
W ‭ he board of directors has the‬
T ‭ he board of directors,‬
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‭such a‬ ‭authority to call such a meeting.‬ ‭along with‬
‭meeting?‬ ‭requisitionists, have the‬
‭authority to call such a‬
‭meeting.‬

‭ epercussions‬
R ‭ he tribunal may call and‬
T ‭ imilarly, the tribunal‬
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‭of default in‬ ‭impose a fine in case a company‬ ‭may call and impose a‬
‭conducting‬ ‭defaults in holding an AGM in a‬ ‭fine in case a company‬
‭such a meeting‬ ‭requisite manner.‬ ‭errs in holding an EGM‬
‭in the prescribed‬
‭manner.‬

‭Annual General Meeting (AGM)‬

‭ he annual general meeting is defined under‬‭Section 96‬‭of the Companies Act,‬

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‭2013. As the name suggests, an annual general meeting is one of the general‬
‭meetings held once a year. As per Section 96 of the Companies Act, 2013, all‬
‭companies have to hold an AGM within the stipulated time. An AGM provides a‬
‭chance for the members of the company to review the workings of the company‬
‭and express their opinions on the management and workings of the company.‬

‭Purpose of conducting an annual general meeting‬

‭The main purpose of conducting an AGM is to transact the ordinary business of‬
‭the company. Ordinary business includes the following:‬

‭1.‬ ‭Consideration of financial statements and reports from the directors‬

‭and auditors.‬
‭2.‬ ‭Making declarations on dividends.‬
‭3.‬ ‭Appointing a replacement of director or directors in place of those who‬
‭have retired.‬
‭4.‬ ‭Appointing and setting up the amount of remuneration for the auditors‬
‭of the company.‬
‭5.‬ ‭It also includes annual accounts, crucial reports, and audits.‬

‭Importance of conducting an annual general meeting‬

‭15‬
‭ nder corporate law, an annual general meeting is regarded as one of the most‬
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‭important institutions for protecting the members of the company. It is at this‬
‭meeting— even though it is held only once in a fiscal year- that the members of‬
‭the company get the opportunity to question the management on matters‬
‭relating to the following:‬

‭ .‬ ‭The affairs of the company,‬

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‭2.‬ ‭The business of the company, and‬
‭3.‬ ‭The accounts of the company.‬

I‭ t is only at this meeting that the members of the company have the chance not‬
‭to re-elect those directors in whom they have lost faith or confidence. Further,‬
‭as auditors also retire at this meeting, members of the company have another‬
‭opportunity to think about the re-election of these auditors.‬

‭ ast but not least, it is at the AGM that members disclose the amount of‬
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‭dividend payable by the company. While talking about dividends, it may be‬
‭noted that the board of directors makes recommendations on the amount of‬
‭dividend, whereas the members at the AGM declare the dividend. Further, the‬
‭dividend cannot surpass the recommended amount by the board of directors.‬

‭The three rules of conducting an annual general meeting‬

‭ .‬ ‭The meeting must be conducted on an annual basis.‬

1
‭2.‬ ‭A maximum duration of 15 months is permitted between holding two‬
‭annual general meetings.‬
‭3.‬ ‭The meeting must be conducted within six months of preparing the‬
‭balance sheet.‬

I‭ f any of these rules are not complied with, the same will be said to be an‬
‭offence under the Companies Act, 2013. It has been discussed in the upcoming‬
‭passages.‬

‭Notice of conducting the annual general meeting‬

‭ he company has to send a clear 21 days’ notice to its members to conduct the‬
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‭annual general meeting. The notice must mention the day, date, and location of‬
‭the meeting, along with the hour at which it is decided to be held. The notice‬
‭should explicitly mention the business to be conducted at the AGM. A company‬
‭is obligated to send the AGM notice to the following:‬

‭16‬
 ‭1.‬ ‭All the members of the company, including the legal representatives of‬
‭a deceased member and the assignee of an insolvent member.‬
‭2.‬ ‭The statutory auditors of the company.‬
‭3.‬ ‭All the directors of the company.‬

‭ he notice can be sent either by speed or registered mail or even through‬

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‭electronic means like email.‬

‭Date, time, and place of conducting an annual general meeting‬

‭ sually, an annual general meeting can be conducted at any time, provided it is‬
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‭during business hours (between 9 am and 6 pm) and the day of the meeting is‬
‭not a national holiday. Now, talking about the location of the meeting, it can be‬
‭held either at any pre-decided place within the area of the jurisdiction of the‬
‭registered office or at the registered office itself.‬

‭ elow are some of the noteworthy pointers in context to the date, time, and‬
B
‭place of holding an annual general meeting:‬

‭1.‬ ‭A public company or a private company that acts as a subsidiary of a‬

‭public company may determine the timing of the meeting as per the‬
‭articles of association.‬
‭2.‬ ‭At a general meeting, a resolution can also be passed for determining‬
‭the time of holding subsequent meetings.‬
‭3.‬ ‭In the case of private companies, the time and location are determined‬
‭by passing a resolution at any of the meetings.‬
‭4.‬ ‭For a private company meeting, the location may not be within the‬
‭area of jurisdiction of the registered office of the company.‬

‭ urther, as per‬‭Section 101‬‭of the 2013 Act, if any‬‭member files an application‬

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‭in case a company errs in holding an annual general meeting, the time frame‬
‭for notice to call for the meeting can be reduced to less than 21 days (21 days‬
‭is the time frame to send a notice to call for an annual general meeting) with‬
‭the agreement of members who are entitled to vote.‬

‭First annual general meeting and relaxations‬

‭ s per Section 96 of the Companies Act, 2013, a general meeting must be held‬
A
‭annually, as the name suggests. It is mandatory that all companies hold such‬
‭meetings at regular intervals. When the annual general meeting is held for the‬
‭first time after the company’s incorporation, it has to be held within a period of‬

‭17‬
‭ ine months from the date of the closing of the financial year of the company,‬
n
‭and in other cases, within six months from the date of the closing of the‬
‭financial year. Further, as per Section 96 of the Companies Act, 2013, a‬
‭company has no obligation to hold any general meetings until it holds its first‬
‭annual general meeting. Such a relaxation is provided so that the company can‬
‭set up its final reports for a longer duration. Another provision that is provided‬
‭under Section 166(1) is that, with proper authorization from the registrar, the‬
‭company can postpone the date of the annual general meeting. The registrar‬
‭has the authority to postpone the date for a further three months at the most,‬
‭however, such a relaxation does not apply in the case of the company’s first‬
‭annual general meeting. Further, a company may not hold an annual general‬
‭meeting in a year provided the registrar has consented to it, however, the‬
‭justification for such an extension should be reasonable and genuine.‬

‭Gaps between two annual general meetings‬

‭ ccording to Section 96 of the Companies Act, the gap between two annual‬
A
‭general meetings must not exceed fifteen months. Further, Section 210 of the‬
‭Act states that a company must provide a report on the accounts of all the‬
‭profits and losses of the company, and if the company does not have any‬
‭profits, an income and expenditure report must be submitted.‬

‭ urthermore, the following pointers are crucial to note in cases of gaps‬

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‭between two annual general meetings:‬

‭1.‬ ‭When a company presents its report on profits and losses incurred, it‬
‭has to mention all the profits and losses endured by the company‬
‭right from the day of incorporation.‬
‭2.‬ ‭The account shall have an update of at least 9 months from the date of‬
‭the last annual general meeting.‬
‭3.‬ ‭A balance sheet along with the account report has to be submitted, as‬
‭well.‬

‭ lso, after conducting the first annual general meeting, the next AGM must be‬
A
‭held within 6 months from the end of the financial year. If, due to any‬
‭unforeseeable circumstance, the company fails to hold the meeting, the tribunal‬
‭may grant an extension of 3 months.‬

‭Quorum‬

‭Public company‬
‭18‬
‭The quorum in the case of a public company shall consist of the following:‬

‭ .‬ ‭5 if the company has less than 1000 members,‬

1
‭2.‬ ‭15 if the members are between 1000 and 5000, and‬
‭3.‬ ‭30 if the number of members exceeds 5000.‬

‭Private company‬

I‭ n the case of a private company, only two members who are present will‬
‭constitute the quorum.‬

‭Proxy in annual general meetings‬

‭ ny member of the company who has the authority to vote at a meeting will be‬
A
‭entitled to appoint a proxy, i.e., another person to attend and vote instead of‬
‭himself. The appointment of a proxy shall be in‬‭Form‬‭No. MGT.11‬‭. Further, an‬
‭individual cannot act as a proxy on behalf of members exceeding a total of 50‬
‭and holding in aggregate not more than 10% of total capital with the authority‬
‭to vote.‬

‭Procedure to be followed after conducting the annual general meeting and‬

‭penalty if the company fails‬

‭ fter conducting the annual general meeting, a report in the form of MGT-15‬
A
‭within a period of 30 days has to be filed. Further, under‬‭Section 121‬‭, the report‬
‭will include how the meeting was convened, held, and conducted as per the‬
‭provisions of the 2013 Act. If the company errs in doing so, a penalty of ₹1 lakh‬
‭shall be imposed. Further, on every officer who has erred in following the‬
‭procedure of the meeting, a penalty of ₹25,000 minimum shall be imposed, and‬
‭in case the issue persists, a penalty of ₹500 for every day after the failure‬
‭persists can be imposed, and the same shall be for a maximum of ₹1 lakh.‬

‭Penalty for not holding an annual general meeting‬

I‭ f a company errs in holding an annual general meeting in accordance with‬

‭Section 99‬‭of the Companies Act, 1956, the act shall‬‭be considered a serious‬
‭offence in the eyes of the law. Every member of the company who is at fault‬
‭shall be deemed to be a defaulter.‬

‭ urther, a fine extendable to ₹100,000 may be levied on the defaulters.‬

F
‭Moreover, as per Section 99 of the Companies Act, if the defaulters persist with‬

‭19‬
t‭ he same mistakes, and if the provisions under Sections 96 and 97 are not‬
‭complied with, a fine of ₹5000 will be imposed on the defaulter until the‬
‭problem continues.‬

‭Power of NCLT (National Company Law Tribunal)‬

‭ he National Company Law Tribunal, commonly known as NCLT, has the‬

T
‭authority to call or direct a meeting under‬‭Section‬‭97‬‭of the Companies Act,‬
‭2013, in case an application is filed by a member in matters relating to the‬
‭failure to conduct the meeting.‬

‭Extraordinary general meeting (EGM)‬

I‭ n a company, there are certain matters that are so crucial to be discussed that‬
‭they need to be addressed immediately to the members, which is where an‬
‭extraordinary general meeting comes into play. Such meetings are discussed‬
‭under‬‭Section 100‬‭of the Companies Act, 2013. An extraordinary‬‭general‬
‭meeting is any general meeting apart from the statutory meeting, an annual‬
‭general meeting, or any adjournment meeting. Such a meeting is held to‬
‭discuss special business, especially those businesses that do not fall under the‬
‭ordinary business that is discussed at annual general meetings. Such meetings‬
‭are usually called for matters that are urgent and for those that cannot be‬
‭discussed at annual general meetings. Extraordinary general meetings are‬
‭usually called by the following:‬

‭ .‬ ‭The directors or the board of directors of the company,‬

1
‭2.‬ ‭The shareholders of the company who hold 1/10th of the paid-up‬
‭shares.‬

‭Calling of extraordinary general meeting‬

‭ hile dealing with the above heading, one might wonder when and by whom an‬
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‭extraordinary general meeting can be called. Let’s find out.‬

‭ n extraordinary general meeting can be called in the following‬

A
‭circumstances:‬

‭By the board of directors suo moto‬

I‭ n cases when the board of directors has some urgent matters to discuss and‬
‭such matters cannot be postponed until the next general meeting, the board of‬

‭20‬
‭ irectors may hold an extraordinary general meeting if need be. The same is‬
d
‭discussed under Section 100 (1) of the 2013 Act.‬

‭By the Board on the requisition of members‬

‭ he board of directors may call an extraordinary general meeting on the‬

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‭requisition of the following number of members:‬

‭1.‬ ‭In case of a company having a share capital‬

‭ embers who own 1/10th of the paid-up share capital of the company on the‬
M
‭date of receipt of the requisition on the date of exercising the voting rights.‬

‭2.‬ ‭In case of a company not having a share capital‬

‭ embers who own 1/10th of the paid-up share capital of the company on the‬
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‭date of receipt of the requisition on the date of exercising the voting rights.‬

‭By requisitionists‬

‭ nder Section 100(4) of the Company Act, 2013, if a board does not, within 21‬
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‭days from the date of receipt of a valid requisition in relation to any matters‬
‭thereto, take any steps to call a meeting to consider the matter not later than‬
‭forty-five days from the date of receiving such a requisition, then the meeting‬
‭may be called upon and conducted by the requisitionists themselves within a‬
‭time span of three months from the date of the requisition.‬

‭ urther, it is important to note the following pointers for a better understanding‬

F
‭of the topic:‬

‭●‬ ‭Notice‬

‭ he notice must specify the date, day, time, and place of holding the meeting,‬
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‭and must be held in the same city as the registered office and on a working day.‬

‭●‬ ‭Notice to be signed‬

‭ he notice has to be duly signed by all the requisitionists or on behalf of those‬

T
‭requisitionists who have permission to sign in place of the requisitionists,‬

‭21‬
‭ rovided the permission is in writing. This can also be done via an electronic‬
p
‭request attached to a scanned copy to give such permission.‬

‭●‬ N
‭ o need of an explanatory statement to be attached to the‬
‭notice‬

‭ here is no need for any explanatory statement under Section 102 to be‬
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‭attached with the notice of an extraordinary general meeting that is convened‬
‭by the requisitionists and the requisitionists.‬

‭●‬ ‭Serving notice of the meeting‬

‭ he notice of the meeting has to be served on all those members whose names‬
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‭are on the list of registered members of the company. It should be served within‬
‭three days of the requisitionists depositing a valid request for conducting an‬
‭EGM in the company.‬

‭●‬ ‭Method of serving the notice‬

‭ he notice of the meeting can be sent through speed mail, registered mail, or‬
T
‭even electronic means like emails. If there is an issue with serving the notice or‬
‭if some member does not receive the notice for any reason, the meeting shall‬
‭not be‬‭invalidated‬‭by any member.‬

‭By the tribunal‬

‭ ccording to‬‭Section 98‬‭of the Companies Act, 2013,‬‭if it is not possible to‬
A
‭conduct a meeting in the company, the tribunal may either‬‭suo moto‬‭or through‬
‭an application submitted by any director or member of the company who has‬
‭the authority to vote at the meeting-‬

‭1.‬ ‭Instruct to hold and conduct a meeting in a manner the tribunal thinks‬
‭fit, and‬
‭2.‬ ‭Provide‬‭ancillary‬‭or‬‭consequential‬‭instructions as‬‭the tribunal deems fit,‬
‭including any directives thus amending or supplementing in matters‬
‭relating to the calling, holding and conducting the meeting, the‬
‭operation of the clauses of the Act or articles of the company.‬

‭ uch instructions may also incorporate any command that a member of the‬
S
‭company present in person or via proxy shall be deemed to compose a meeting.‬

‭22‬
‭ he meeting held pursuant to such orders shall be referred to as a meeting of‬
T
‭the company that is duly called, held, and conducted.‬

‭Place of conducting an extraordinary general meeting‬

‭ n extraordinary general meeting can be held at the registered office or any‬

A
‭other location in the city where such a registered office is located.‬

‭Notice for extraordinary general meeting‬

‭ he notice of an extraordinary general meeting must be served in writing or‬

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‭through an electronic mode in at least 21 days of conducting such a meeting.‬

‭Penalty for not holding an extraordinary general meeting properly‬

I‭ n cases where an extraordinary general meeting is not conducted properly, a‬

‭fine of ₹10,000 within a prescribed time can be levied on the defaulters.‬
‭Moreover, in case the issue persists, a fine of ₹1000 per day shall be levied.‬
‭Additionally, the maximum fines in cases of erring in conducting an EGM‬
‭successfully are:‬

‭ .‬ ‭₹50,000 for a member of the company, and‬

1
‭2.‬ ‭₹200,000 for the company itself.‬

‭Class meeting‬

‭Company meetings come under two broad categories, namely:‬

‭ .‬ ‭General meetings, and‬

1
‭2.‬ ‭Class meetings.‬

‭ e have already talked about the different types of general meetings above,‬
W
‭let’s now discuss what these class meetings are!‬

‭ lass meetings, as the name suggests, are meetings conducted for shareholders‬
C
‭of the company that hold a particular class of shares. Such a meeting is‬
‭conducted to pass a resolution that is binding only on members of the‬
‭concerned class. Also, only members belonging to that particular class of shares‬
‭have the right to attend and vote at the meeting. Usually, the voting rules are‬
‭applicable to class meetings as they govern voting at general meetings.‬

‭23‬
‭ uch class meetings can be conducted whenever there is a need to alter or‬
S
‭change the rights or privileges of that class as stated in the articles of‬
‭association. In order to execute such changes, it is crucial that these‬
‭amendments be approved in a separate meeting of the shareholders and‬
‭supported by passing a special resolution. Under‬‭Section‬‭48‬‭of the Companies‬
‭Act, 2013, which talks about variations in shareholders’ rights, class meetings of‬
‭the holders of the different classes of shares must be conducted in case there‬
‭are any variations. Similarly, under‬‭Section 232‬‭,‬‭which discusses mergers and‬
‭amalgamations of companies, where a scheme of arrangement is proposed,‬
‭there is a requirement that meetings of several classes of shareholders and‬
‭creditors be conducted.‬

‭Meetings of directors‬

‭Board of directors‬

‭Board meetings‬

‭ s per‬‭Section 173‬‭of the Companies Act, 2013, a company has to hold the‬
A
‭meeting of board of directors in the following manner:‬

‭1.‬ ‭The first board meeting has to be conducted within a span of thirty‬
‭days from the date of incorporation.‬
‭2.‬ ‭In addition to the above meeting, every company has to hold a‬
‭minimum of four board meetings annually, and there shall not be a gap‬
‭of more than one hundred and twenty days between consecutive two‬
‭meetings.‬

‭ lease note:‬‭With the issuance of Secretarial Standard‬‭1 (SS-1), a circular by‬

P
‭ICSI, a clarification was given that the board shall conduct a meeting at least‬
‭once every six months with a maximum gap of one hundred and twenty days‬
‭between two consecutive board meetings. Further, the SS also specified that it‬
‭will be sufficient if a company holds one meeting in every renaming calendar‬
‭quarter in the year of its incorporation in addition to the first meeting, which is‬
‭to be held within thirty days from the date of incorporation.‬

‭3.‬ ‭In matters relating to Section 8 of the Companies Act, with an‬
‭exemption by MCA dated 5.06.2015, it was held that the sub clause (1)‬
‭of Section 173 will be applicable only to the extent that the board of‬
‭24‬
 ‭ irectors of such companies hold at least one meeting in every six‬
d
‭months.‬

‭Purpose of holding a board meeting‬

‭Board meetings are held for the following purposes:‬

‭ .‬ ‭For
1 issuing shares and debentures.‬
‭2.‬ ‭For making calls on shares.‬
‭3.‬ ‭For forfeiting the shares.‬
‭4.‬ ‭For transferring the shares.‬
‭5.‬ ‭For fixing the rate of dividend.‬
‭6.‬ ‭For taking loans in addition to debentures.‬
‭7.‬ ‭For making an investment in the wealth of the company.‬
‭8.‬ ‭For pondering over the difficulties of the company.‬
‭9.‬ ‭For making decisions of the policies of the company.‬

‭Notice of board meetings‬

‭As per Section 173(3) of the Companies Act, 2013-‬

‭1.‬ ‭A notice of not less than seven days must be sent to every director at‬
‭the address that is registered with the company.‬
‭2.‬ ‭Such notice can be sent either via speed post, by hand delivery, or‬
‭through any electronic means.‬
‭3.‬ ‭The SS-1 (mentioned above) states that if the company sends the‬
‭notice by speed post, or registered post, or by courier, an additional‬
‭two days shall be added to the notice served period.‬
‭4.‬ ‭In situations when the board meeting is called at shorter notice, it has‬
‭to be conducted in the presence of at least one independent director.‬
‭5.‬ ‭Further, if the independent director is absent, the decision occurred at‬
‭must be circulated to all the directors, and it shall be final only after‬
‭ratification of decision by at least one independent director.‬
‭6.‬ ‭Moreover, in cases where a company does not have its own‬
‭independent director, the decision shall be said to be final only if it is‬
‭ratified by a majority of directors, unless a majority of directors gave‬
‭their approval at the meeting itself.‬

‭Some important pointers on the requirements and procedures for‬

‭convening and conducting a valid board meeting‬
‭25‬
‭ .‬ ‭Directors can join the meeting-‬
1
‭1.‬ ‭In person,‬
‭a.‬ ‭Through video conferencing, or‬
‭b.‬ ‭Other audio visual means.‬
‭2.‬ ‭Rule 3 of the‬‭Companies (Meetings of Board and its Powers) Rules,‬
‭2014‬‭, has provisions related to the requirements and procedures,‬
‭along with the procedures needed for board meetings in person for‬
‭matters relating to conveying and conducting board meetings via video‬
‭conferencing.‬
‭3.‬ ‭While conducting virtual meetings, it is necessary that companies make‬
‭proper arrangements to avoid any issues at the last moment.‬
‭4.‬ ‭The chairperson and the secretary of the company have to ensure that‬
‭they take necessary precautions in matters relating to video‬
‭conferencing, like proper security, recording the proceedings and‬
‭preparing the minutes of the meeting, having proper audio visual‬
‭equipment, etc.‬
‭5.‬ ‭The notice for holding the meeting must be in accordance with the‬
‭provisions laid under Section 173, subsection 3 of the Act.‬
‭6.‬ ‭While beginning the meeting, the chairperson has the duty to roll call‬
‭every director participating through video conferencing or other such‬
‭means to record the following:‬
‭1.‬ ‭Name of the director;‬
‭2.‬ ‭The place from where the director is participating;‬
‭3.‬ ‭An affirmation that the director can completely see, listen, and‬
‭communicate with the other participants in the meeting;‬
‭4.‬ ‭A confirmation that the director has received the agenda and all‬
‭the relevant material related to the meeting;‬
‭5.‬ ‭A proclamation that no other individual other than the director is‬
‭attending or has access to the proceedings of the meeting at the‬
‭palace mentioned in pointer (b).‬
‭7.‬ ‭After the roll call, the chairperson or the secretary has to inform the‬
‭board about the names of the members who are attending the meeting‬
‭at the request or with the authorization of the chairman and affirm that‬
‭the required quorum is complete.‬
‭8.‬ ‭There are some matters that must not be dealt with through video‬
‭conferencing or other audiovisual means, namely:‬
‭1.‬ ‭An approval of the annual financial statements;‬
‭2.‬ ‭An approval of the report of the board;‬
‭3.‬ ‭An approval of the prospectus;‬
‭4.‬ ‭The audit committee meetings for consideration of statements‬
‭related to finance, including a consolidated financial statement, if‬
‭any, that needs an approval from the board under subsection (1)‬
‭of Section 134 of the Act; and‬
‭26‬
 ‭5.‬ ‭An approval on matters related to the amalgamation, merger,‬
‭demerger, acquisition, and takeover.‬

‭Agenda‬

‭ he word “agenda” can be described as things to be done. In the case of‬

T
‭company meetings, it can be said to be a statement of the business that must‬
‭be transacted at a meeting, along with the order in which the business must be‬
‭dealt with. Even though there is no explicit mention or provision in the‬
‭Companies Act, 2013, for the secretary to send an agenda or include the same‬
‭in the notice of the board meeting, it is necessary by convention for the agenda‬
‭to be mentioned with the notice served to conduct the meeting. When an‬
‭agenda is attached to the notice, the director is aware of the proposed business‬
‭and the objects of conducting the meeting, thus, he can come duly prepared for‬
‭the discussion to be held in the meeting.‬

‭Quorum‬

‭ s we know, every company needs to have a proper quorum to conduct a valid‬

A
‭company meeting. Now, the quorum for a board meeting under Section 174 of‬
‭the Act is one third of the total strength or two directors, whichever is higher. It‬
‭must be noted that, any director participating through video conferencing or any‬
‭other audiovisual means must also be considered to determine the quorum.‬

‭ urther, if the number of directors is reduced or there is any removal of a‬

F
‭director or directors, the directors who continue may act on behalf of the‬
‭missing number of directors to fill the missing gap for the quorum or for‬
‭summoning a general meeting of the company; however, they shall not act for‬
‭any other purpose. Moreover, in cases where the number of directors interested‬
‭surpasses or is equal to two-thirds of the total strength of the board of‬
‭directors, the number of directors who are not interested and are there to‬
‭attend the meeting, the number not being below two, shall be the quorum at‬
‭such times.‬

I‭ t is pertinent to note that the quorum has to be present not only at the time of‬
‭commencement of the meeting but also at the time of transacting business with‬
‭the company.‬

‭Committee of directors‬

‭27‬
‭ he board of directors has the authority to form committees and delegate‬
T
‭powers to such committees; however, it is crucial that such a committee only‬
‭consist of directors and no other members. Further, it is mandatory for such‬
‭committees to be authorised by the articles of association of the company and‬
‭be in lieu of the provisions set out in the Companies Act. The meetings of all‬
‭these committees are held in the same manner as board meetings.‬

I‭ n large companies, the following routine matters are looked after by the‬
‭sub-committees of the board of directors:‬

‭ .‬ ‭Allotment,‬
1
‭2.‬ ‭Transfer,‬
‭3.‬ ‭Finance.‬

‭Other meetings‬

‭Debenture holders meeting‬

‭ company is entitled to issue debentures, and to further implement the same,‬

A
‭a meeting for debenture holders can be called. This meeting is between the‬
‭board of directors and the debenture holders. These meetings are usually called‬
‭to discuss the rights and responsibilities of debenture holders.‬

‭ eetings of debenture holders are conducted in accordance with the provisions‬

M
‭laid down in the debenture trust deed. The rules and regulations mentioned in‬
‭the trust deed are related to the following:‬

‭ .‬ ‭Notice of the meeting,‬

1
‭2.‬ ‭Appointment of a chairman of the meeting,‬
‭3.‬ ‭Passing resolutions,‬
‭4.‬ ‭Quorum of the meeting, and‬
‭5.‬ ‭Writing and signing of minutes of the meeting.‬

‭ ebenture holder meetings are generally conducted from time to time to‬
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‭discuss matters where the interest of debenture holders is involved, like at the‬
‭time of:‬

‭ .‬ ‭Reconstruction,‬
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‭2.‬ ‭Reorganisation,‬
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 ‭ .‬ ‭Amalgamation, or‬
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‭4.‬ ‭Winding up of the company.‬

‭Creditors meeting‬

‭ eetings of creditors is a term used to‬‭describe‬‭a‬‭meeting setup by the‬

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‭company to conduct a meeting of the company’s creditors. Under the Company‬
‭Act, 2013, companies are not only entrusted with the power to negotiate with‬
‭creditors but also set up a procedure to do so. Such meetings are always‬
‭arranged in matters where a creditor decides to voluntarily wind up.‬

‭ oreover,‬‭Section 108‬‭of the Companies Act, 2013, discusses the holding of‬
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‭meetings of creditors. It also states that meetings be held in accordance with‬
‭the provisions laid down under the following sections of the said Act:‬

‭ .‬ ‭Section 109‬‭that discusses demand for poll,‬

1
‭2.‬ ‭Section 110‬‭that talks about postal ballot, and‬
‭3.‬ ‭Section 111‬‭that has provisions in relation to the‬‭circulation of‬
‭members’ resolutions.‬

I‭ n the creditors meeting, the creditors can decide to either approve, amend, or‬
‭reject the repayment plan. Further, the resolution professional must make sure‬
‭that any sort of changes or modifications suggested by the creditors of the‬
‭company are approved by the directors of the company before carrying out that‬
‭particular change. Furthermore, the resolution professional also has the‬
‭authority to adjourn the meeting of the creditors for a period of not more than‬
‭seven days at a time.‬

‭Notice of meetings of creditors‬

I‭ f a company is voluntarily winding up, a meeting of creditors must be called to‬

‭propose a resolution for voluntary winding up. Such a meeting has to be called‬
‭either on the day of taking such a decision or the subsequent day, and a general‬
‭meeting must be conducted to propose the resolution.‬

‭ he notice to creditors must either be sent by post along with the notices‬
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‭regarding the general meeting of the company for winding up. Additionally, with‬
‭the notice to the creditors, the company also has to advertise at least once in‬
‭the official gazette and once in two newspapers that are circulated in the district‬
‭where the company’s registered office or principal place of business is situated.‬

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‭Procedure for conducting a company meeting‬

‭ hile discussing the procedure for consulting the meeting of the creditors, the‬
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‭following pointers are noteworthy:‬

‭Obligation of the board of directors‬

‭ hile conducting a meeting, the board of directors must submit a statement on‬
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‭the position of the company’s affairs along with a list of the company’s creditors‬
‭and the estimated amount of their claims. The director who is entrusted with‬
‭the duty to conduct the meeting of creditors or who is in charge of the same‬
‭must attend the meeting and hold it at the same time.‬

‭Next course of winding up of the company‬

‭ ased on the decision that occurred at the meeting of creditors, the company‬
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‭shall decide its next course of action. The decision could be one of the following:‬

‭1.‬ ‭The company would wind up on a voluntary basis if all the parties‬
‭agree to it unanimously.‬
‭2.‬ ‭In case the company is not able to repay all the debts from the assets‬
‭sold in the voluntary winding up of the company, then a resolution can‬
‭be passed from winding up the company by involving the tribunal.‬

‭Passing the notice of resolution‬

‭ hen a notice of resolution is passed in the meeting of creditors, the same‬

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‭must be filed with the registrar within 10 days of passing such a resolution. If‬
‭the company does not adhere to the set provisions of company law under the‬
‭Companies Act, 2013, a penalty with a fine that will not be less than fifty‬
‭thousand rupees and extendable up to two lakh rupees shall be imposed.‬
‭Further, the director of the company who errs in following the procedure, will‬
‭also be penalised with an imprisonment for a term extendable to six months or‬
‭with a fine not less than fifty thousand rupees and extendable up to two lakh‬
‭rupees.‬

‭Quorum of creditors‬

‭ meeting cannot be commenced unless the creditors of the company, known as‬
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‭quorum attend the meeting. The requisite‬‭quorum‬‭is‬‭as follows:‬

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‭Quorum in case of creditors‬

I‭ n the case of creditors, at least one creditor entitled to vote must be in the‬
‭quorum.‬

‭Creditors and contributors meeting‬

‭ reditor and contributor meetings are usually‬‭conducted‬‭when the company has‬

C
‭gone into liquidation to calculate the total amount due by the company to its‬
‭creditors. The main motive of holding such meetings is to seek the approval of‬
‭the contributors to the scheme of compromise or rearrangement to save the‬
‭company from economic difficulties.‬

‭ t times, even a court can pass an order to conduct such a meeting. It should‬
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‭be noted that the term “contributory” encompasses every individual who is‬
‭accountable for making contributions to the assets of the company at the time‬
‭of winding up.‬

‭Quorum in case of contributors‬

I‭ n the case of a meeting of contributors, at least one creditor is entitled to vote,‬

‭or all the contributors if their number does not exceed two.‬

‭Requisites of a valid company meeting‬

I‭ f the business carried on in a company is valid and legally binding, it is‬
‭necessary that the meeting called to conduct such business also be held in a‬
‭valid manner. To understand the same, there are some pointers one must‬
‭understand to consider a meeting valid. The following are the‬‭requisites‬‭for‬
‭conducting a valid company meeting:‬

‭ .‬ ‭The meeting is convened by proper authority.‬

1
‭2.‬ ‭The announcement of holding the meeting is served through a proper‬
‭notice. The same has been discussed under Section 101 and 102 of the‬
‭Companies Act, 2013.‬
‭3.‬ ‭While holding the meeting, it is crucial that a proper quorum is‬
‭present.‬
‭4.‬ ‭To conduct the meeting, it is important that it must be presided over‬
‭by a proper chairman.‬
‭5.‬ ‭At the meeting, business must be validly transacted.‬

‭31‬
 ‭6.‬ ‭It is crucial that proper minutes of the meeting must be prepared.‬

‭Relevance of different company meetings‬

‭ very company has its own importance. Let’s quickly take a look at each of the‬
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‭company law meetings’ relevance.‬

‭Annual general meeting (AGM)‬

‭ n AGM is conducted to transact the ordinary business of the company.‬

A
‭Ordinary business includes the following:‬

‭1.‬ ‭Consideration of financial statements and reports from the directors‬

‭and auditors.‬
‭2.‬ ‭Making declarations on dividends.‬
‭3.‬ ‭Appointing a replacement of directors in place of those who have‬
‭retired.‬
‭4.‬ ‭Appointing and setting up the amount of remuneration for auditors of‬
‭the company.‬
‭5.‬ ‭It also includes annual accounts, crucial reports, audits.‬

‭Extraordinary general meeting (EGM)‬

‭ n EGM is conducted to discuss special businesses, usually those that do not fall‬
A
‭under the category of ordinary businesses, which are discussed at AGMs. These‬
‭meetings are generally called only in cases of urgent matters or for those‬
‭matters that are not discussed at AGMs.‬

‭Class meetings‬

‭ lass meetings are conducted for shareholders belonging to a particular class.‬

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‭These meetings are held to gain approval via a special resolution of all such‬
‭members belonging to the particular class to seek their approval on important‬
‭matters or amends in any field related to their interests.‬

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‭Board of directors meeting‬

‭ board of directors is held for several purposes, namely, for making calls on‬
A
‭shares, issuing shares and debentures, forfeiting the shares, for discussing the‬
‭difficulties of the company, etc.‬

‭Committee of directors meeting‬

‭ committee of directors meeting can be held for issues relating to the‬

A
‭allotment or transfer of any share or asset of the company, or even for any‬
‭issues relating to the finances of the company.‬

‭Debenture holders meeting‬

‭ ebenture holders meetings are conducted to decide upon matters relating to‬
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‭the reconstruction, reorganisation, amalgamation, or winding up of the‬
‭company.‬

‭Creditors meeting‬

‭ reditors meetings are usually conducted for the creditors to either approve,‬
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‭change, or deny the repayment plans of a company when it decides to wind up‬
‭voluntarily.‬

‭Creditors and contributors meeting‬

‭ imilar to the aforementioned meeting, a contributors meeting is conducted for‬

S
‭the calculation of the total amount due by the company to repay creditors or‬
‭contributors when the company has gone into liquidation.‬

‭What happens if there is a breach in‬

‭conducting company law meetings‬
‭33‬
 ‭ s discussed under each heading (wherever relevant), in case a company errs in‬
A
‭conducting a meeting, a penalty in the form of fine, is imposed by the tribunal.‬
‭The penalty is either imposed on the company or its members, or both. The‬
‭penalty keeps recurring up to a certain amount in case of continuation of the‬
‭blunder.‬

‭Conclusion‬
‭ nder the Companies Act, 2013, it is important that companies conduct‬
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‭requisite meetings throughout the year as and when necessary. These meetings‬
‭play a major role in shaping the company, as major decisions relating to the‬
‭company and its future are taken in such meetings.‬

‭ here are three main categories of meetings in company law, and each meeting‬
T
‭has its own significance. Also, these meetings are further divided into‬
‭subcategories. For a recap, let us again take a look at the categories.‬

‭ .‬ ‭Meetings of shareholders or members‬

1
‭2.‬ ‭General meeting which is further divided into:‬
‭1.‬ ‭Statutory meeting,‬
‭2.‬ ‭Annual General Meeting,‬
‭3.‬ ‭Extraordinary General Meeting.‬
‭4.‬ ‭Class meeting.‬
‭5.‬ ‭Meetings of Directors‬
‭1.‬ ‭Board of directors meeting,‬
‭2.‬ ‭Committee of directors meeting.‬
‭a.‬ ‭Other meetings‬
‭1.‬ ‭Debenture holders meeting,‬
‭2.‬ ‭Creditors meeting, and‬
‭3.‬ ‭Creditors and contributors meeting.‬

‭ urther, for every meeting to be valid, it is integral that it must be duly‬

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‭convened, properly constituted and effectively conducted under the requisite‬
‭provisions of the Companies Act and the rules framed thereunder.‬

‭ n annual general meeting can be‬‭held‬‭at any place that is within the‬
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‭jurisdiction of the city, town or village in which the registered office is situated.‬

‭34‬
‭ urther, a government company also has the authority to hold an AGM at any‬
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‭place approved by the Central Government.‬

‭ o answer the second question, yes, a company can hold an AGM outside India,‬
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‭however, a prior permission from the Central Government is required to carry‬
‭out such an activity.‬

‭Which companies are not obliged to hold an AGM?‬

‭ ll companies except one person company, commonly known as OPC, are‬

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‭obliged‬‭to hold an AGM at the end of each financial‬‭year. Further, a company‬
‭has the duty to hold an AGM within a period of six months from the end of the‬
‭financial year.‬

‭35‬