This article is written by Shristi Suman, a second-year student of Symbiosis Law School, Hyderabad. In this article, the laws relating to meetings under the Company Law have been discussed.

Annual General Meeting

An Annual general meeting refers to the meeting which is held annually by the companies. It is important for every type of company whether it is a private company or a public company, limited by shares or guarantee to conduct an annual general meeting once in a year. There shouldn’t be a gap of more than 15 months between two annual general meetings. An exception is given when a company is incorporated, in such a case the company may not conduct an annual general meeting in the year at all. After incorporation, the company needs to conduct an annual general meeting within 18 months.

According to Section 166 of the Companies Act, the first meeting after incorporation of the company must be held within 18 months. Subject to the exception of incorporation, there shouldn’t be a gap of more than 15 months between two annual general meetings. Except for in the case of the first annual general meeting, the Registrar has the power to extend the annual general meeting for a time period which should not be more than 3 months. A notice must be given for annual general meeting specifying details such as date, place of the meeting. The notice served must specify that the meeting is the annual general meeting and the time and date assigned for it must be during business hours, and on a date which isn’t a public holiday. The place of the meeting should be the registered office of the company and if not so, then it must be within the town, city or village in which the company is officially registered.

According to Section 167 of the Act, in case there is a default by the company in conducting the annual general meeting and any member of the company files an application for the contravention of the said default, the Regional Director of the Company Law Board may call for a meeting or direct holding of a meeting and then that meeting would be counted as the annual general meeting. Where the provisions of Section 166 and 167 of the Act are contradicted, then in such a case, a fine can be imposed on the Company and every officer of the company responsible. A notice is to be served in advance of 21 days for the annual general meeting but in case the notice is not served before 21 days and all the members who are entitled to vote in the meeting agree for an annual general meeting, then the meeting can be called with shorter notice.

The matters which are taken up to be discussed in an annual general meeting are known as ordinary business. These are the matters which are discussed in every annual general meeting. Ordinary business constitutes of discussion on annual accounts, important reports such as director’s report and auditor’s report, declaration of dividend, the appointment of directors, etc. Apart from ordinary business, a special business can also be discussed in annual general meeting.

Extraordinary General Meeting

The matters which constitutes to be the ordinary business of the company is discussed in a statutory meeting and annual general meeting. To discuss the matters apart from ordinary business i.e. special business extraordinary general meeting is called for. Any meeting which is called apart from statutory meeting and annual general is called an extraordinary meeting. Extraordinary general meeting is usually called for discussing matters which are urgent and can’t wait to be discussed in the annual general meeting. The extraordinary general meeting can be called by the directors of the company as well as by the shareholders who hold at least one-tenth of the paid-up share capital of the company. Shareholders can make a requisition to the board of directors of the company to call a meeting. If the meeting is not arranged for even after requisition by Shareholders then the Shareholders may convene the meeting.

According to Section 186 of the Companies Act, Company Law Board has the power to call an extraordinary general meeting but not an annual general meeting. Shareholders of the company are empowered to convene a meeting within 3 months if it is not convened within 21 days of requisition by the Company Law Board.

In an extraordinary general meeting matters like alteration of clauses of Memorandum of Association, changes in the Articles of Association, schemes in relation to share capital are usually discussed. Any matter which needs to be discussed upon in urgent also calls for extraordinary general meetings.

In case, the extraordinary general meeting can’t be held due to some reasons then, the Company Law Board may call the meeting on its own initiative. A notice is to be served in advance and it should include details like the cause of such meetings, the interest of directors, managers or shareholders in the matters which caused need to call for the meeting. The special resolution which is passed in the meeting has to be filed to the Registrar within 15 days.

Power to Call Board Meetings

The Secretary or a director of a company has the power to call board meetings. The board meetings can be called by the Secretary or a director by following the procedure which is laid down by the Companies Act, 2013. The meeting can be called on the direction of the Chairman/Managing Director. Any director can requisite to convene a board meeting and then on such requisition, the Manager, Secretary or any Director can summon a board meeting. Notice for such a meeting is to be served in advance and it should be done under the company’s authority. If a notice for a board meeting is sent without any authority, then it will be considered to be an improper notice. In case, a director wants to convene a board meeting to discuss some urgent matters, then he must do so with the permission of the Managing director of the company.

In the case of Sanjiv Kothari v Vasant Kumar Chordia, it was observed that if a meeting is convened by the Managing director on requisition by the director on the same date at the registered office to discuss the same matters which was brought forward by the director then, the director must attend that meeting and should not arrange any other meeting on the same date at some different place.

Procedure of Meetings

It is the responsibility of the director of the company to ensure that the procedure followed for conducting the meetings of the company is valid and in accordance with the Companies Act. The decisions that are taken in the meeting should be according to the sections of the Companies Act. It is the duty of the director to ensure that the members of the meeting are notified of the details of the meeting like the place, time and date of the meeting, type of the meeting, the business that will be considered at the meeting and the notice should also include motions and resolutions that will be put forward to the members during the meeting.

It is important to confirm that there is a quorum present before the meeting commences and also it is important to ensure that the quorum is maintained during the process of meeting as it is necessary for a valid motion to pass. If the quorum is achieved, the meeting may commence and all the voting and passing of resolutions during the meeting should be in conformation with the rules under the Companies Act and it should be accurately recorded in the minutes of the meeting. If the meeting is not conducted in accordance with the rules of the Companies Act, then the directors of the company will be held responsible and be liable for a fine.

A meeting must be chaired by a chairperson. The chairperson is responsible to control the proceedings of the meeting. He introduces and concludes the meeting. The chairperson has to ensure that proper notice is served to the members of the meeting and go through the minutes of the last meeting. He ensures that the meeting takes place and gets over within the time prescribed for it. He keeps order and facilitates the meeting, ensures everyone gets an equal opportunity to share their views. The chairperson receives motions and puts a vote on such motions. In case of a tie, the chairperson has to cast a final vote and declare the result.

Notice

A notice of a meeting is served to all the members of the meeting to discuss the business at the meeting. A notice is to be served to the members of the meeting in a manner which is prescribed under the Companies Act. Notice for the general meetings must also be served to directors, auditors, and to any such member who is entitled to a share in case a member of the meeting dies. In case, a company accidentally fails to serve a notice to a person who is entitled to receive it, the meeting would not be considered invalid. All the members of the meeting are entitled to vote in the matters raised in the meeting.

The contents of the notice depends on the type of meeting which is called for, if the company has called for annual general meeting, it will include all ordinary business which will be discussed in the meeting and if extraordinary general meeting is called by the company, then the notice will include the special business and resolutions which will be discussed in the meeting. Annual general meeting needs a notice to be served to the members of the meeting in advance of 21 days whereas, in the extraordinary general meeting notice is needed to be served in advance of 14 days.

In the case of Parker and Cooper Ltd v Reading, it was observed that when the notice which was served to the members of the meeting is improper but still the members of the meeting attended the meeting, then the notice can be made good and the meeting can be considered to be a valid meeting irrespective of the fact whether notice which was served for the meeting was proper or improper.

Contents of notice

The notice must contain the following contents:

• Place where the meeting will be conducted
• Date, day and time on which the meeting will be conducted
• The business which will be discussed in the meeting
• Brief of business 
• The date on which notice is served
• Signature of the convener of the meeting

Quorum

Section 103 of the Companies Act lays down the Quorum which is required for the meeting. The quorum refers to the minimum number of members required to conduct a meeting. According to Section 174 of the Companies Act, one-third of the total number of members to the meeting constitutes a quorum for the meeting. In a meeting, a minimum of two directors are required to attend the meeting but where the company is owned by a single person then, in that case, the condition does not apply. 

According to Section 174(1) of the Companies Act, It is possible for a director to attend a meeting through a video conference call. A director attending a meeting through video conference will also be considered while counting for a quorum.

A quorum of the meeting has to be maintained throughout the meeting. In order to ensure that quorum is present throughout the meeting, a roll call is to be made by the chairperson before the commencement, in between after every break and at the time of when the meeting is being concluded. In case the quorum is not present then the meeting will be called off.

Chairman

A meeting is chaired by a chairperson. The chairperson is also known as the chairman and is responsible to control the proceedings of the meeting. He introduces and concludes the meetings. The chairperson has to ensure that proper notice is served to the members of the meeting and has to go through the minutes of the last meeting in the beginning of each meeting. He ensures that the meeting takes place and gets over within the time prescribed for it. He keeps order and facilitate the meeting. It is the duty of the chairman to ensure that each member of the meeting gets an equal opportunity to share their views. The chairperson receives motions and puts votes on such motions. The chairperson also has a right to cast a vote in the meetings. In case there is a tie, the chairman can cast his final vote and declare the result. The chairman of the company is also the chairman of the Board and in case if there isn’t a chairman in a company then the directors may choose one of them to be a chairman.

Voting Rights

In case, there is a matter which needs to be decided on in the meeting, it is done by the votes of the members of the meeting. According to Section 50(2), every member who is limited by company shares and holds equity share capital will have a right to vote on all the resolutions which lie before the company. Section 188(1) states that the members who are entitled to vote shall have voting rights on a poll in proportion to the shares held by him to the paid-up equity share capital of the company.

The members of the company who are limited by shares and holds preference share capital have a right to vote on polls in which the resolution that is placed before the company directly affects the right of the member related to his preference shares. The members of the company also have a right to vote on resolutions such as winding up of the company, for repayment or for reduction of the company’s equity or preference share capital. Voting polls are conducted in a meeting to pass a resolution. The procedure is preceded by the chairman. The common methods used for voting is by showing or raising hands, voice votes, raising method (by standing for votes in against or for the motion), ballot, a proxy or postal votes, etc.

Resolutions by Postal Ballot

According to Section 110 of the Companies Act, a postal ballot is a method of voting which is used when a member who is entitled to vote cannot be physically present to vote. In such a circumstance, the member who is entitled to vote can send his vote by posting it. Postal ballot refers to the method of voting by post. This method enables members to vote, who otherwise would not have been able to because of their physical absence.

The postal ballot can be used for voting in meetings except for when the poll is for deciding on ordinary business or in a case where a business in which it is important to attend and hear directors or auditors in the meeting. When it is decided that the resolution placed before the company will be passed by postal ballot, it shall send a notice regarding it to all the members of the meeting annexed with a draft resolution in which reasons for the poll are explained. They are requested to send their votes on the motion. The method of postal ballot includes voting by post or through any electronic means. The vote shall be sent within 30 days from the date on which the notice for the passing of the resolution was sent to the members.

The vote can be sent through a registered post, courier service, speed post or by electronic means such as email. Postal ballot can’t be used in a case where the company is a one-person company or in case the company has up to 200 members.

Electronic Mode

Voting for a resolution by electronic means is known as casting vote by electronic mode or electronic voting. Voting by electronic mode includes voting by punched cards, optical scan voting system and specialized voting kiosks, telephones, private computer networks, internet, etc. Section 108 of the Companies Act includes the provision for electronic mode of voting. A company listed under the Companies Act, 2013, having 1000 or more shareholders should provide to its members, the facility of casting vote through electronic mode. A member gets the right to vote even if they are not physically present in a meeting through electronic modes. The electronic mode of voting can be used in place of the postal ballot. The electronic mode of voting is more convenient and time-saving.

Representation of Government in Meetings of the Companies

A member can be appointed by the Government to attend meetings of the company in case the Government is a member of the company. The member appointed can be any person who the Government thinks to be fit to attend the meeting. The person who is appointed as a representative of the Government shall attend the meeting as any other member of the meeting and shall exercise similar rights and powers.

Kinds of Resolution

A resolution can be defined as a decision which is taken by limited company directors or shareholders and is legally binding. A resolution can be passed by the members of the meeting if a majority of votes are received in favour of the resolution. There are three kinds of resolutions namely, ordinary resolutions, special resolutions and written resolutions.

• Ordinary resolutions: refers to the resolutions that can be passed by a simple majority. It can be used for all kinds of matters unless there’s a need to for special resolution. The ordinary resolutions are generally filed with a government body i.e. Companies House.
• Special resolutions: the resolutions which are needed to be passed by a majority of at least 75% of the total votes in favour of the resolution at a general meeting is referred to as special resolutions. It is generally used in cases where a resolution can’t be passed by an ordinary resolution and consists of special or extraordinary matters.
• Written resolutions: it is used when the resolution which needs to be passed is an ordinary resolution or a simple resolution but doesn’t need a general meeting for it. It is done by shareholders by simply signing and casting their votes for a resolution. In case the resolution is an ordinary resolution then it can be passed by a simple majority and in case of a special resolution, 75% of votes are needed.

Circulation of Members’ Resolutions

The chairperson who is elected by the board precedes the meeting. In case, the chairperson is not available then, the meeting is to be preceded by the Managing Director. Where it is agreed by at least one-third of the total directors of the company to propose a resolution under circulation in order to be decided in a meeting, it is the chairperson’s responsibility to put the resolution for consideration. The proposed resolution should be sent in a draft together with other necessary documents to all the members of the meeting on the same day. The draft of the proposed resolution can be passed and circulated to the members of the meeting by handing it over to them, by speed post, by courier, by email or any other recognized electronic means. The resolution which is proposed to be passed should be explained in a note and sent along with the draft of the resolution to the members of the meeting. When the resolution is approved by a majority then the resolution is passed.

Minutes

The minutes of a meeting is an essential document in which all the points, discussions, decisions which were taken in the meeting are recorded. It is an official document and is mandatorily referred to before starting a new meeting. Minutes are final when it is approved by the members of the meeting and signed by the chairperson. Minutes are written in a factual manner which gives the gist of the meeting. It generally comprises of details of meeting such as the date of the meeting, members who attended or failed to attend the meeting, proposed motions and amendments in the meeting, the proposer of such motion and members who approved it, details of the procedure of voting, recommendations and decisions taken in relation to the motion, etc.

Publication of Reports and Proceedings

According to Section 121 of the Companies Act, every public listed company is needed to prepare a report for each annual general meeting. The report is further needed to be filed with the Registrar within 30 days of the annual general meeting. 

The other companies also have to inform the registrar about the proceedings of meetings and contracts which they entered into under Section 193(2) under the Companies Act, 2013.

Service of Documents on Members

A document can be served on members or officers of the company according to Section 20 of the Companies Act, 2013. The document which needs to be served can be sent to the member or officer of the company at the registered office of the company. The document needs to be served by registered post, courier service, by manually dropping it in the office, or by a recognized electronic means. If the member prescribes a mode of delivery of the documents, then the documents should be delivered to him through that mode. The cost of delivery is to be paid by the member in an annual general meeting for the prescribed mode of delivery.

Service of Documents on the Company

The service of documents on the company is included under Section 20 of the Companies Act, 2013. A document can be served to a company by sending it to the company at the registered office through a registered post, courier service, by dropping it at the registered office or by a recognized electronic means. Electronic means includes transmission of documents by registered email id, or such other means by which the identity of the sender can be recognized.

Meeting of Audit Committee

An audit committee consists of board of directors of each listed company and the companies similar to such listed companies that are prescribed under the Companies Act. The committee must mandatorily have a minimum of three directors with independent directors forming a majority. The members of the audit committee and the chairperson must be in a condition to read and understand the financial statements that are put before the committee.

Section 177 of the Companies Act, 2013 deals with the Audit Committee. 

It is desirable for the Audit Committee to meet at least 4 times a year. The meetings are preceded by the chairman. The quorum exists when the chairperson and at least one other member is present in the meeting. The Group’s Chief Financial Officer (CFO) serves as the secretary of the meetings. All the members of the Board and the Chief Executive Officer of the company are entitled to attend meetings of the audit committee. It is the Audit Committee’s responsibility to prepare a schedule for an annual meeting. The schedule prepared must include the main issues of the agenda that is decided to be taken up in the meeting. The financial statements and interim reports which is related to resolution or matter discussed in the meeting have to be given to the members of the meeting at least before 24 hours from the meeting. Minutes of the Audit Committee’s meetings are required to be drawn up without any delay and it should be signed by the Chairman and the secretary.

Conclusion 

A company is an association of persons. All the matters of the company have to be decided by the members of the company. The discussions which take place in order to decide on the matters of the company are known as meetings of the company. The Companies Act contains many provisions in relation to the meetings of the company. The meetings of the company for deciding on ordinary business and special business or extraordinary business takes place by following separate procedures and rules. The meetings may take place at different levels of the company to decide on matters which lie before the company. Shareholders as owners of the company have a right to convene a meeting to pass a resolution. The chairperson of the meeting precedes the meetings. A mandatory quorum is needed for the convention of a meeting. The discussions which take place in order to decide on the matters of the company are known as meetings of the company. The Companies Act contains many provisions in relation to the meetings of the company.