ESSENTIALS OF A VALID

MEETING
PRESENTED BY,
ANCEL K VELLANCHERIL – T2 – ROLL.NO: 8
ANJALY THERESA JOHN – T2 – ROLL.NO: 9
 The word ‘meeting’ literally means a coming together of
two or more persons.
 Company meetings are gatherings of the shareholders or
the creditors or the debenture holders of a company for
discussing and taking certain decisions affecting the
company.
 Essentials of a Valid Meetings

 A general meeting of the shareholders is said to be valid

when it is properly and legally constituted
 Sec 171 – 186 of the companies act, 1956 deals with the
provisions relating to the holding of a valid general
meeting
1) Proper Authority
2) Notice
3) Agenda
4) Chairman
5) Quorum
6) Minutes
 Proper Authority (sec.171)

 A valid meeting must be called by the right person.

 Board of Directors
 Directors on the requisition of members
 The tribunal
 The company Law Board
 Notice (sec.172)

 All those who are concerned with the business of the

meeting and are entitled to attend it should be
communicated of the details of the meeting. Such
communication is called the notice of the meeting
o Requirements of a valid notice
• Proper Authority
• Issue of notice
 a company shall issues a notice to :
a) Every member of the company
b) Every auditor or auditors of the company
c) Every directors of the company
d) Every legal representatives of a deceased shareholders
e) One of the joint owners of shares whose name appears
first on the register of members
f) Public trustees
• Length of the period of notice
• Day, date, time and place of meeting
• Business to be done
 Deliberate omission to give notice to a single member
may invalidate the meeting.
 But an accidental omission to give notice to any person
shall not invalidate the proceedings of the meeting
 Agenda (sec.173)

 Agenda means things to be done at meeting.

 Secretary is responsible for preparing the agenda in
consultation with the chairman of the meeting.
 Ordinary business firs and then the special business
 Sec 172 requires the copy of agenda is supplied to all
members when a notice is sent
 Ordinary business
In the case of an annual general meeting:
 The consideration of A/Cs, Balance sheet, reports of
BOD and Auditors
 The declaration of dividend
 Appointment of directors in place of those retiring
 Appointment of and fixation of remuneration of auditors
 Special Business
In the case of an AGM any business other than the
ordinary business, and in the case of any other meeting,
all business are deemed special.
The act further provides that when any special business is
to be transacted, the notice must contain a statement
setting out all materials facts concerning each of such
items.
 Chairman (sec.175)

 Chairman preside over and conduct the proceedings of

the meeting
 He is elected to act as guide and leader at a meeting
 He enjoys the right to control and regulate the speeches
of members at the meeting.
 Appointment
The chairman is usually appointed by the articles. But if
the article do not designate any person as chairman,
sec.175(1) states that the members personally presented at
the meeting must elect one of them to b the chairman
thereon of a show of hands or by poll
 Qualification of a chairman
Any person who is not disqualified under the general law
of the country may be appointed as chairman.
 Power of the chairman
1. To maintain order and decorum
2. To decide point of order
3. To decide priority of the speakers
4. To close the discussion on a matter, if sufficient time has been given
5. To adjourn a meeting
o if the meeting has become disorderly; od
o If the quorum for the meeting is not present; or
o If the majority of the members so desire
6. To give a casting vote
7. To reject a decision
8. To grant a poll
9. To admit or reject an amendment to a motion
10.To expel unruly members
11.To arrange for fair voting on every resolution
12.To exclude from the minutes any matter which in his opinion is
immaterial and detrimental to the interest of the company.
Duties of the chairman
• To act bonafide and in the interest of the company as a
whole
• To see whether he is legally appointed to preside preside
over the meeting
• To ensure that the meeting is properly conducted
• To see whether the quorum is present before the
commencement of the business in the meeting
• To ensure that the provisions of the act and the articles with
regard to meeting are observed
• To see that order is maintained at the meeting
• To see that the items in the agenda are discussed according
to the order set out in the agenda
• To see that the business transacted is within the scope of the
meeting
• To see that the motions are moved properly
• To protect the interests of the minority
• To see that a discussion is permitted only after a motion or
proposition is duly seconded and proposed
• To allow time to the mover of the motion to reply to the
debate
• To exercise correctly his powers of adjournment and of
granting a poll
• To exercise his casting vote bonafide and in the interest of
the company
 Casting vote
 The chairman has 2 votes
 One in his own capacity and another in his capacity as
chairman
 Quorum (sec.174)

 It is the minimum number of members who must be

present at a meeting in order that the business of the
meeting may be validly transacted.
 The quorum is usually fixed by the articles of the
company. if the articles do not fix any quorum, the
company act lays down that :-
1. Members must be personally present , Five in case of
public and 2 in case of any other company
2. In the case of ‘requisitioned meetings’ if the quorum is not
present within half an hour, the meeting shall stand
dissolved
3. In the case of other meetings, if the quorum is not present, it
shall stand adjourned to the same day in the next week at the
same time and place
4. If at the adjourned meeting also a quorum is not present, the
members present shall form the quorum
5. The quorum for the meetings of the directors shall be 1/3rd of
the total strength of the directors or two directors whichever
is higher
6. Normally one member cannot constitute a meeting and
cannot fulfull the requirements of a quorum.
 Minutes
 Minutes are the short notes of the proceedings at a
meeting of any company o society. They contain the
business transacted and the decisions taken there at, in a
correct and precise manner.
Uses
 As they record the business transacted and the decisions
taken at a meeting, they can b further referred to.
 Since they are written, they remain as permanent records
of the proceedings of a meeting
 They are acceptable by the court as an evidence of the
proceedings of a meeting
 They are concise records of the decisions arrived at a
meeting
KINDS OF MINUTES OF MEETING
1. Minutes of decisions or resolution
2. Minutes of narration
3. Combination method
CONTENTS
I. The kind of meeting with its number, date, place
II. The name of the chairperson, directors, secretary, the number of members
present etc.
III. The reference of confirmation of meeting of past meeting
IV. Description of resolution passed, business transacted and decisions taken at the
meeting
V. Brief descriptions of appointments approved and budget sanctioned for the
same
VI. Contract approved, if any
VII. Special resolution passed with no. of votes for and against each such resolution
VIII. Signature of the chairman and date of confirmation of minutes.
Alteration of minutes

 Minutes once written cannot be materially altered. But if

there is a clerical error it can be rectified and must be
initiated by the chairman. If the error is a material one, it
must be nearly ruled out and initiated by the chairman.
When a decision taken at an early meeting is to be changed,
then a fresh resolution altering the previous resolution must
be passed
THANK YOU…