Kinds of Company Meetings and Procedure- Corporate law

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1. CORPORATE LAW KINDS OF COMPANY MEETINGS & PROCEDURE By- SPARSH AGARWAL MAIMS (GGSIPU)

2. COMPANY MEETING The word “meeting” is not defined anywhere in the Companies Act. Ordinarily, a company may be defined as gathering, assembling or coming together of two or more persons (by previous notice or by mutual arrangement) for discussion and transaction of some lawful business. In the case of Sharp vs. Dawes (1971), the meeting is defined as “An assembly of people for a lawful purpose” or “the coming together of at least two persons for any lawful purpose.” According to P.K. Ghosh “Any gathering, assembly or coming together of two or more persons for the transaction of some lawful business of common concern is called meeting.” According to K. Kishore, “A concurrence or coming together of at least a quorum of members by previous notice or mutual agreement for transaction business for a common interest is meeting.” Thus, f rom the above definitions of meeting, it can be concluded that meeting is the congregation of several persons in a particular place for the purpose of discussing some important matters and expressing their opinion on the questions raised.

3. KINDS OF COMPANY MEETINGS The meetings of a company can be broadly classified into four kinds: 1. Meetings of the Board of Directors and their Committees. 2. Meetings of the Shareholders. 3. Meetings of the Debenture Holders. 4. Meetings of the Creditors.

4. BOARD MEETING Meetings of Directors are called Board Meetings. These are the most important as well as the most frequently held meetings of the company. It is only at these meetings that all important matters relating to the company and its policies are discussed and decided upon. Since the administration of the company lies in the hands of the Board, it should meet frequently for the proper conduct of the business of the company. The Companies Act therefore gives wide discretion to the directors to frame rules and regulations regarding the holding and conduct of Board meetings. The directors of most companies frame rules concerning how, where and when they shall meet and how their meetings would be regulated. These rules are commonly known as Standing Orders.

5. MEETING OF SHAREHOLDERS 1. STATUTORY MEETING The statutory meeting is the first general meeting of the company. It is conducted only once in the lifetime of the company. A private company or a public company having no share capital need not conduct a statutory meeting. 2. ANNUAL GENERAL MEETING The Annual General Meeting is one of the important meetings of a company. It is usually held once in a year. AGM should be conducted by both private and public ltd companies whether limited by shares or by guarantee; having or not having a share capital. The meeting of the shareholders can be classified into four categories

6. MEETING OF SHAREHOLDERS 3. EXTRA-ORDINARY GENERAL MEETINGS Statutory Meeting and Annual General Meetings are called the ordinary meetings of a company. All other general meetings other than these two are called Extraordinary General Meetings. As the very name suggests, these meetings are convened to deal with all the matters which fall outside the usual business of the Annual General Meetings. 4. CLASS MEETINGS Class meetings are those meetings, which are held by the shareholders of a particular class of shares e.g., preference shareholders or debenture holders. Class meetings are generally conducted when it is proposed to alter, vary or affect the rights of a particular class of shareholders.

7. MEETINGS OF DEBENTURE HOLDERS The debenture holders of a particular class conduct these meeting. They are generally conducted when the company wants to vary the terms of security or to modify their rights or to vary the rate of interest payable etc. Rules and Regulations regarding the holding of the meetings of the debenture holders are either entered in the Trust Deed or endorsed on the Debenture Bond so that they are binding upon the holders of debentures and upon the company.

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

9. PROCEDURE OF COMPANY MEETINGS Notice Agenda Quorum Conducting a board meeting Recordings of the proceedings of the meeting Resolution of the meeting

10. PROCEDURE OF COMPANY MEETINGS 1. NOTICE Before the beginning of the Board Meeting, a notice for the same should be given to every Director in the Company. A failure to give notice for the meeting would invalidate the meeting and the matters debated or approved upon in the meeting would be null and void. Section 286 of the Company Act states that there is a penalty imposed on the concerned officer if the notice for the meeting is not given. 2. AGENDA It is wise to send the agenda of the meeting before the meeting so that the Directors’ can ponder and jot down their notes before the meeting. The Act does not lay down any provision that the Agenda of the Meeting should be sent to the Directors’ attending the meeting before the start of the meeting as mentioned above.

11. PROCEDURE OF COMPANY MEETINGS 3. QUORUM   The quorum for a Board Meeting is one-third of the total number of the directors of the company or two directors, whichever is higher. If the quorum is not present then, the meeting will be adjourned to the same time and place on the same day in the following week. 4. CONDUCTING A BOARD MEETING The Articles of Association of a Company provides for the manner or procedure in which an item or business must be conducted at a Board Meeting. Most votes resolves all debates, questions, or resolutions and if a consensus is not obtained than the Chairman of the Board of Directors has the casting vote in case of an equality of votes. 5. RECORDING OF THE PROCEEDINGS OF THE MEETING The proceedings of the meeting are to be recorded within thirty days from the conclusion of the meeting in a Minutes book. The minutes of the meeting should contain the names of the Directors attending the meeting, resolutions taken in the meeting, dissent on any issue, solution for the issue, etc. It should provide a fair and accurate summary of the meeting and contain evidence of every issue discussed at the meeting.

12. PROCEDURE OF COMPANY MEETINGS Section 289 of the Company Act states that a resolution can be passed either at the meeting of the Board of Directors or by Circulation. If a resolution must be passed through circulation, then a draft of the resolution along with the necessary papers should be given to each director. The resolution by circulation should be approved by most of the directors on the board. Under Section 292, the following six powers can be exercised by the Board of Directors, with regards to passing of resolutions in a Board Meeting and not by Circulation: Make calls on shareholders in respect to money which is unpaid on their shares. Authorize buy-back of the shares of the Company (the Buy-back should be less than 10% of the total paid-up equity capital and free reserves of the company. Issuance of debentures. Borrowing of Money other than on debentures. Investing funds of the company. Make loans. 6. RESOLUTION OF THE MEETING

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