Different Meetings of Companies (A Business Labor Laws Topic)

Meeting of the companies are of three kinds:

1. Meetings of Members
2. Meetings of Directors
3. Meetings of Creditors

Meetings of members are general meetings as they are attended by all the members. The management of the company is undertaken through meetings of the company’s shareholders where major decisions are to be taken. The meetings are usually called by directors, but may also be called by the shareholders. In case of default the Commission may call a meeting, either of its own accord or on the application of members. There are three types of meetings of members: the Statutory Meeting, the Annual General Meeting, And Extra Ordinary General Meeting.

A Board of Directors generally must conduct a Board meeting to make company decisions,frame the general policy of the company, direct its affairs, appoints the company officers, ensures that they carry out their duties and recommend to the share holders regarding distribution of dividend.

The Meeting where a bankruptcy trustee's studies the debtor's filing for bankruptcy and questions the debtor under oath.  All of the debtor's creditors are invited to attend the meeting and can ask questions, although they rarely attend.

Meaning:

• Meeting: Get together of individuals or persons with some plan is known as meeting.
• Business meeting: When two or more persons gathered as per given notice to discuss some business matters is known as business meetings.
• Company meeting: When the members of a company gather at a certain time and place to discuss business affairs it is called company meeting.

Meetings of Companies:

Meetings of the company are of three kinds:

1).  Meetings of Members

These meetings are general meetings as they are attended by all the members. The management of the company is undertaken through meetings of the company’s shareholders where major decisions are to be taken. The meetings are usually called by directors, but may also be called by the shareholders. In case of default the Commission may call a meeting, either of its own accord or on the application of members. Get together of individuals or persons with some plan is known as meeting.

The meetings of the shareholders are of three types

• The Statutory Meeting

The statutory meeting is the first meeting of the members of the company after it commences business. It is held once in lifetime of the company.

Section 157(1) states that

“ every company limited by shares and every company limited by guarantee and having a share capital shall , within a period of not less than three months, nor more than six months, from the date at which the company is entitled to commence business, hold a general meeting of the members of the company, which shall be called ‘the statutory meeting’ ”.

Sub section (12) states that this section shall not apply to a private company. Thus the following companies are required to hold the statutory meeting:

Every public company limited by shares.

Every company limited by guarantee and having a share capital.

Occasion:

This meeting must be held after 3 months, but before 6 months of obtaining the certificate of commencement of business.

Notice of Meeting:

The directors will send a notice of the meeting to all the members of the company at least 21 days before the meeting. And also send a copy of statutory report to the shareholders and ROC.

Objectives:

• To win Confidence
• To Provide Latest Information
• To Discuss Future Plans
• To Discuss Statutory Report

               Total number of shares issued

               Total receipts and total payments

               Cash received against shares allotted

               Details of the shares allotted

Requirements of Statutory Meeting:

Following are the requirements of statutory meeting:

• It is to be held within a period of three to six months after the commencement of business.
• Twenty one days before the date on which the meeting is held, the director shall forward a report, “the Statutory Report” to every member. The report is to be certified by the CEO and two other directors. After certification a copy is to be sent to the registrar and the auditors. The Annual General Meeting, Extra Ordinary General Meeting

The Statutory report includes the following:

• List of Members
• Shares allotted and the amount received from them
• Particulars of the directors, managers and secretary
• Particulars of contracts that have to be approved
• The detail of company’s affairs along with fees and brokerage paid.
• The members present at meeting are at liberty to disclose any matter relating to the formation of the company.

• Annual General Meeting (AGM)

The Annual General Meeting (AGM) is a required meeting under the ordinance. It is an annual meeting through which the shareholders control the affairs of the company. They may raise questions about the affairs of the company including its accounts. It is, therefore, the annual general meeting of the company that protects the interest of the shareholders. 

“Every public company will hold Annual General Meeting of its members every year. This meeting is to be call and held by the directors of the company “.

Occasion:

The first annual general meeting must be held within 18 months from the date of its incorporation. The next meeting must be held once in every calendar year within 4 months after closing of its financial year. The interval between the two meetings must not exceed than 15 months.

Notice of the Meeting:

The directors will send a notice of the meeting to all the members of the company at least 21 days before the meeting. It should also be published in newspaper.

Requirements of AGM:

It must be held every year. The first AGM is to be held within eighteen months of incorporation. Every subsequent (coming) AGM is to be held within four months of the closing of the company’s annual financial year. Notice of the date of the meeting is to be send twenty one days before such date to the shareholders whereas in case of a listed company the notice is also required to be published in the newspaper. In case of default in complying with any of these requirements all officers party to such default shall be held liable. The gap between two AGMs should not be more than fifteen months.

Agenda of AGM:

• In this meeting the following matters are usually considered.
• Annual accounts of the company
• Declaration of dividend
• Retirement and appointment of auditors
• Retirement and appointment of Directors.

Objective:

• To check Annual Accounts
• Declaration of Dividend
• Election of Directors
• Appointment of Auditor

• Extra Ordinary General Meeting

“All general meetings other than annual general meeting and statutory meeting are known as Extra-Ordinary General Meetings. This meeting is held on the special occasions or you can say in the emergency situations when directors think that it necessary “. For example; at the plan of merger etc"

 According to section 159
All general meetings of a company, other than AGM and the statutory meeting are called Extra Ordinary General Meeting. Such meetings are called to deal with some urgent special business that can not be postponed till the AGM. These meetings are called by two ways:
Calling of Extra Ordinary General Meeting by Directors.
The directors may at any time call the Extra Ordinary General Meeting of the company to consider any matter which requires the approval of the company in general meeting.
Calling of Extra Ordinary General Meeting on the Requisition of Members.
The directors shall, on the requisition of members representing the one tenth of the voting power on the date of deposit of requisition, forthwith to proceed to call an extra ordinary general meeting.

Requirements of Calling Extra Ordinary General Meeting on the Requisition of Members. 

The requisition shall state the objects of the meeting.

• It will be signed by the requisitionists.
• The requisition will be deposited at the registered office of the company.
• If the directors do not proceed within the twenty-one days from the date of the requisition being so deposited to call a meeting, the requisitionists may themselves call the meeting.
• The meeting so called shall be held within three months from the date of depositing such requisition.
• The meeting will be called in the same manner as the meetings are called by directors.

Notice of an Extra Ordinary General Meeting:

The notice of an Extra Ordinary General Meeting shall be send to the members at least twenty one days before the date of the meeting and in case of a listed company it shall also be published in a newspaper. A shorter notice period will require approval of the registrar.

Occasion:

This meeting is held on the special occasion and in the emergency situation.

Notice of the Meeting:

The directors will send a notice of the meeting to all the members of the company at least 21 days before the meeting.

2).   Meetings of Directors

A Board of Directors generally must conduct a Board meeting to make company decisions,frame the general policy of the company, direct its affairs, appoints the company officers, ensures that they carry out their duties and recommend to the share holders regarding distribution of dividend. 

A quorum represents the minimum amount of directors is 2 directors. There are also essentially 2 types of directors’ meetings:

• Special: A special meeting is one called by a majority of the director for a particular purpose or purposes.
• Scheduled: A scheduled meeting is generally set forth in the corporation’s Bylaws or Articles of Incorporation. 

Advisory boards merely act as advisers for the Board of Directors. It is therefore the Board of Directors that holds responsibility for the overall success and failure of the corporation.

Requisites of a valid meeting:

• Proper Authority:

The proper authority to convene a general meeting of a company is the Board of Directors.  The Board should pass a resolution to call the general meeting. If the directors do not call the meeting, the member or the Company Law Board may call the meeting.

• Notice of meeting:

Proper notice of the meeting should be given to all the members and all others who are entitled to attend the meeting. A general meeting may be called by giving a notice of less than 21 days. If the notice of a meeting is not given to every person entitled to receive notice, then any resolution passed at the meeting will of no effect but accidental omission may be valid. 

• Quorum for meeting:

Quorum means the minimum number of members who must be present to constitute a valid meeting. The quorum is generally fixed by the Articles. 5 members personally present in the case of Public Company and 2 in the case of any other company. 

• Chairman of meeting:

A chairman is necessary to conduct a meeting. He is the presiding officer of the meeting. Unless the Articles of a company otherwise provide, the members personally present at the meeting shall elect one of themselves to be the chairman of the meeting on a show of hands.  

• Minutes of meeting:

Minutes are a record of what the company and directors do in meetings. The book in which the record of the proceedings of a meeting is kept is known as the minute book. Separate minute books are required to be kept. Each page of the minute book which records proceedings of a Board meeting shall be initialed or signed by the chairman of the same meeting or the next succeeding meeting.

The Proxy refers to a person who is authorized by a member of a company to attend and vote at a meeting of the co on his behalf.

Resolution:

• Ordinary resolution:

Company Act, an ordinary resolution is one which is passed by a simple majority of votes of members present in person or by proxy at a properly constituted & convened general meeting.

• Special resolution:

Company Act, a special Resolution is one which is passed by at least 3/4th majority of votes of members present in person or proxy at a properly constituted & convened G.M.

3).  Meetings of Creditors

The Meeting where a bankruptcy trustee's studies the debtor's filing for bankruptcy and questions the debtor under oath.  All of the debtor's creditors are invited to attend the meeting and can ask questions, although they rarely attend. Sometimes, a company, either as a running concern or in the event of winding up, has to make certain arrangements with its creditors. Meetings of creditors may be called for this purpose.

Under section 393,

A company may enter into arrangements with creditors with the sanction of the Court for reconstruction or any arrangement with its creditors. The court, on application, may order the holding of a creditor’s meeting. If the scheme of arrangement is agreed to by majority in number of holding debts to value of the three-fourth of the total value of the debts, the court may sanction the scheme. A certified copy of the court's order is then filed with the Registrar and it is binding on all the creditors and the company only after it is filed with Registrar. Similarly, in case of winding up of a company, a meeting of creditors and of contributors is held to ascertain the total amount due by the company and also to appoint a liquidator to wind up the affairs of the company.