Requisites of a Valid Company Meeting

In the context of a company, the word ‘meeting’ implies
The coming together of a certain number of members;
For transacting the business in the agenda;
For which a previous notice has been issued.

1. COMPANY MEETINGS Presented by: Mamta Bhola

2. Meaning of Meeting In the context of a company, the word ‘meeting’ implies The coming together of a certain number of members; For transacting the business in the agenda; F or which a previous notice has been issued.

3. Requisites of a valid meeting I. Meeting which is properly convened III. Meeting which is properly conducted II. Meeting which is legally constituted

4. A . Meeting which is properly convened

5. Proper Authority: Board of directors: The Articles of Association of a company normally empower the board of directors to convene general meting. An individual director has no power to al general meeting. Members: If directors do not call the meeting then members u/s 100 are eligible to call EGM. The Tribunal: u/s 97 tribunal can also call AGM and EGM.

6. I. Meeting which is properly convened: (cont.) 2. Notice: A notice of meeting is required to make a meeting valid. A valid notice of a company meeting is one which complies with the general rules, Articles and companies act rules in relation to notice. It should be given to: (i) Every member of the company. (ii) Every person entitled to a share in consequence of the death or insolvency of a member. (iii) Auditor or auditors of the company. a) Length of Notice : 21 days (  The notice shall be deemed to have been received by a member at the expiry of 48 hours from the time of posting)

7. I. Meeting which is properly convened: (cont.) 2. Notice: b) Mode of sending Notice: Notice can be given in writing or by electronic mode, in prescribed manner. Deliberate omission to give notice to a member can invalidate the meeting, however, an accidental omission will not invalidate the meeting. Notice can be sent through electronic mode or through E-mail provided it is readable and is sent with an electronic link or URL

8. I. Meeting which is properly convened: (cont.) 2. Notice: c) Business to be transacted at meeting: Ordinary or specific business. The  Ordinary Business es as prescribed in the Section 102(2) of the Companies Act, 1956 are as follows: the consideration of financial statements and the reports of the Board of Directors and auditors; the declaration of any dividend; the appointment of directors in place of those retiring; the appointment of, and the fixing of the remuneration of, the auditors; Any businesses except the above four businesses shall be deemed to be ‘Special Businesses ’.

9. 9 B. Meeting which is properly constituted

10. PROPER QUORUM (SECTION 103) II. CHAIRMAN (SECTION 104): A general meeting of the company shall be presided over by a chairman who regulates and supervises the proper conduct of the business at a meeting. Unless the articles of the company otherwise provide, the members personally present at the meeting shall elect one of themselves to be the chairman thereof on a show of hands. The chairman should be present within fifteen minutes after the time appointed for holding the meeting. Present no. of members Quorum Required < 1000 (Less than 1000) 5 > 1000 (More than 1000) 15 > 5000 (more than 5000) 30

11. Powers of the Chairman He conducts the proceedings of the meet­ing according to rules and regulations. He can suspend or adjourn a meeting in or­der to maintain order and decorum even if some participants protest. He can give a ruling settle at any point of order and his ruling shall be binding on all members present in the meeting. He has the authority to decide the priority of the speakers in the meeting. He has full authority to restrain irrelevant language used by the members. he can stop prolonged discussion on a matter. He has the power to adjourn the meeting in accordance with the rules. He has the power to expel an unruly mem­ber and get him ejected. He has the power to appoint two scrutinizers to scrutinize the votes given on the poll and to de­clare the result of poll. He can give a casting vote if the Articles of Association so provides.

12. Duties of the Chairman 1. He should see that the meeting is duly con­vened and properly constituted . 2 . He should check that his own appointment is in orders . 3 . He should see that the proceedings of the meeting are conducted in accordance with the rules and in the order set down in the agenda. 4. He should ensure that the business con­ducted is within the scope of the meeting . 5. Unless there is a specific motion before the meeting he should not allow any discussion. Irrelevant discussions must always be stopped by him. He must see that proper order is maintained in the meeting. He must ensure a fair hearing from the minorities. Equal opportunities should be given to all the speakers but he may fix a time limit for each of them . 6. He should see that the motions and amend­ments are within the scope of the notice . 7. He must see that the order is maintained during the meeting. 8. He must exercise his casting vote in the in­terest of the company. 9. In case of a General Meeting, the Chairman should deliver a speech .

13. III. Presence of Directors and Auditors Directors: If any director is unable to attend the meeting, the chairman shall explain such absence at the meeting. Any other member authorized by the chairman may attend the meeting on his behalf. Auditors: The auditors, unless exempted by the company, shall either by themselves or their authorized representative should attend the general meeting. Secretarial Auditor: The chairman may invite the secretarial auditor or his authorized representative to attend any other general meeting, if he feels necessary. The secretarial auditors , unless exempted by the company, shall either by themselves or their authorized representative should attend the general meeting.

14. c. Meeting which is properly convened

15. 1. PROXY The Term Proxy Has Two Meanings A personal representative of the member at A meeting i.e. The person authorises to act or vote for another at A meeting of the company The instrument by which A person is appointed to act for another at A meeting Law entitles every member of A company to appoint A person as his proxy to attend and vote at company meeting instead of himself. Restrictions on appointment of proxy: The central government may prescribe a class or classes of companies whose members shall not be entitled to appoint person as a proxy A person can act as proxy on behalf of members I. Not exceeding 50 and ii. Holding in the aggregate not more than 10% of the total share capital of the company carrying voting rights. A member holding more than 10% of the total share capital of the company carrying voting rights. May appoint A single person A proxy. Provided that such person shall not act as proxy for any other person or shareholder.

16. Other provisions regarding appointment of a proxy Every notice of the company regarding company meeting should prominently contain a statement that a member entitled to attend and vote is authorised to appoint a proxy to attend and vote on his behalf. It should also be mentioned that the proxy need not to be a member of the company. Proxy must be appointed by an instrument in writing and the instrument appointing a proxy must be deposited with the company within 48 hours before the meeting. Disabilities of a proxy : a) has no right to speak at the meeting. B) cannot vote on a show of hands.. C) does not have right to inspect proxy forms or minutes of the company. D) is jot counted for the purpose of quorum. Rights of a proxy : a) has right to attend the meeting. B) has right to vote in case of poll. C) a proxy if eligible under section 109, has a right to demand a poll. Revocation of proxy : a) if the member himself attend the meeting after appointing a proxy, the appointment of proxy automatically stands cancelled. B) if the proxy exercises his right to vote, it cannot be cancelled. C) death of the shareholder appointing a proxy will, in the absence of provision in the articles revoke the authority of the proxy.

17. 2. resolutions Ordinary Resolution Special Resolution Resolution Requiring Special Notice Passing Resolution Through Postal Ballot

18. i. Ordinary resolution A resolution passed in a general meeting which is passed by a simple majority of the eligible members and present during the meeting. To be a valid resolution, the notice of 21 days is required of a general meeting. The votes cast in the favour of resolution should exceed the number of votes cast against the resolution. Votes may be cast by way of show of hands, by poll, electronically or by postal ballot and votes may be cast by the proxies also (where they are allowed). The votes cast shall include the casting vote of the chairman.

19. ii. Special resolution The resolution will be a special resolution if: The notice of general meeting has been duly given. ( 21 days) The intention to propose the resolution as a special resolution has been duly specified in the notice of general meeting. The votes cast in favour of resolution are required to be not less than 3 times the votes cast against the resolution. (i.e. 3/4 th majority) AOA should contain certain businesses requiring special resolutions. A copy of every special resolution should be filed with the registrar within 30 days of passing of such resolution. (Section 117, companies act, 2013).

20. iii. Resolutions requiring special notice Any provision contained in the act may provide that a special notice shall be required to move a resolution at a general meeting. Similarly any provision contained in the articles of a company may provide that special notice shall be required to move a resolution at a general meeting Matters requiring special notice as per the provisions of the act: A resolution for appointing a person, other than the retiring auditor, as an auditor at the AGM. A resolution for expressly providing that the retiring auditor shall not be reappointed at the agm . A resolution for removing a director before the expiry of his term of the office. A resolution for appointing a director (in place of a director removed before the expiry of his period of office) at the meeting at which the director is removed.

21. iii. Resolutions requiring special notice (Cont.) Communication of notice: the company shall give notice of intension to move the resolution to all its members at least 7 days prior the general meeting. (Excluding the day on which such notice was given and the day of meeting) If it is not practicable to give the notice then the notice should be published in an English or vernacular newspaper at least 7 days before the general meeting. Such notice should also be placed on the website of the company if it has any such.

22. iv. Passing resolution through postal ballot Postal ballot means voting by post or through any electronic mode. Every company is required to transact such items of business by postal ballot as the central government may by notification declare to be transacted only by postal ballot. Postal ballot is mandatory for the following business: Alteration of object clause of moa and insertion or removal in the provisions of AOA . Change in the place of registered office of the company. Issue of shares with differential rights as to voting or dividend or otherwise. Buy back of the shares of the company. etc .

23. 3. voting The decisions at the meeting are taken by way of passing resolutions. Every proposed resolution is discussed by the members of the company. Members have a right to move amendments to the proposed resolutions. After a proposed resolution has been discussed it is put to vote. Every member has a right to vote on such resolutions. Shareholders may exercise their voting rights in their best interests with complete freedom. Persons entitled to vote: Equity shareholders: every member of a company limited by shares and holding equity shares is entitled to vote in respect of every resolution placed before the company. The voting rights of members is in the proportion to his paid up capital in the company. Preference shareholders: they are entitled to vote on resolutions which directly affect them. Holders of share warrants: they can vote only if the aoa o the company so provide. Joint holders: in case where shares are held in joint names by 2 or more shareholders, the senior most among them will be entitled to vote.

24. Voting (cont.) 5. Insolvent: an insolvent can exercise his right to vote if his name appears in the register of members. 6. Representatives of corporations: according to companies act, a body corporate can appoint a representative who will wield all powers of a regular member and he can appoint a proxy to attend and vote at the meeting at his place. 7. Representatives of the president or governor: the president of India or the governor of a state may appoint a representative to attend and vote on his behalf in meetings of companies in which he is a member.

25. Voting (Cont.) Manner of voting in general meeting: Voting by show of hands: every resolution at general meeting shall be decided by show of hands unless a poll is demanded under section 109 of companies act, 2013. On a show of hands each member has one vote and the proxy is not entitled to vote. Voting by poll: poll is a method of voting in which votes are cast by a member in person or by proxy in proportion to the number of shares held by him. Suo motu action of chairman: the chairman can order a poll before a resolution i put to vote on a show of hands or on the declaration of the result of voting by a show of hands. Demand for poll: i

26. Voting (cont.) 3. The poll shall be taken at such time as may be directed by the chairman but within 48hours of demand for poll. The chairman can appoint any number of scrutinizers as he thinks is necessary for the conduct of poll. 4. Result of the poll shall be deemed to be the decision of the meeting on the resolution on which the poll was taken. 5. Voting by electronic mode: where a process of recording votes by the members using a computer based machine is known as voting by electronic mode. Under this, an electronic ballot is displayed and votes are recorded and the number of votes polled in favour or against is registered and counted in an electronic registry.

27. 4. Maintaining minutes Meeting minutes are  the written or recorded documentation that is used to inform attendees and non attendees about what was discussed or what happened during a meeting. Meeting minutes or notes are generally taken by a designated meeting minutes recorder during the proceedings so that an accurate record exists of what transpired during the meeting. According to section 118, every company is required to prepare and maintain duly signed minutes of every general or other meeting and every resolution passed by postal ballot. Manner of preparation: minutes should contain a summary of meeting recorded fairly, correctly and completely written in past tense and third person. The pages of the minutes book should be properly numbered. Signing the minutes: each page of the minutes book should be signed and last page should be dated and signed in the following manner: # Minutes of board meetings and committee meetings: the chairman of the same or next meeting. # Minutes of general meeting and resolutions passed by postal ballots: the chairman of the same meeting or in the event of death or inability of the chairman, it should be duly signed by the director authorised by the boar for these purposes.

28. Time limit for maintaining minutes: Minutes shall be prepared within 30 days of the conclision of the meeting or passing of the resolution by postal ballot. Contents: i. The minutes should contain a summary of the proceedings of the meeting. ii. Names of the directors present in the meeting. iii. Names of the directors not concurring with the resolution. Chairman's discretion: The chairman has the absolute discretion/ freedom to include or exclude any matter in the minutes, if he thinks it is irrelevant or immaterial to the interests of the company. Evidence: minutes will serve as the evidence for the proceedings in a meeting. Presumptions: If the minutes are maintained fairly, it will be presumed that the meeting was called and held and all the proceedings in the meeting have duly taken place. Maintaining minutes (cont.)

29. Punishment for contravention: in this case the company shall be liable to a penalty of rs . 25,000 and every officer in default shall be liable to a penalty of rs . 5,000. Punishment for tampering with minutes: any person found guilty of tampering with the minutes shall be punishable with imprisonment up to 2 years and fine ranging from rs . 25,000 to rs . 1 lakh. Maintaining minutes (cont.)

30. Thank you!!!