Company Meetings

Types of Company Meetings

4 Main Types of Company Meetings

This article throws light upon the four main types of company meetings.

The types are:

1. Statutory Meeting

2. Annual General Meeting

3. Extraordinary General Meeting

4. Class Meeting

Company Meeting Type # 1. Statutory Meeting:

Every public company limited by shares—and every company limited by guarantee and having a share capital—must, within a period of not less than one month and not more than six months from the date at which the company is entitled to commence business, hold a general meeting of the members which is to be called the Statutory Meeting. In this meeting the members are to discuss a report by the Directors, known as the Statutory Report, which contains particulars relating to the formation of the company.

Private companies are exempted from holding this meeting.

Statutory Report:

The nature of business con­ducted at the statutory meeting involves consid­eration and adoption of the Statutory Report. The Statutory Report is drafted by Directors and certi­fied as correct by at least two of them. A copy of the report must be sent to every member at least 21 days before the date of the meeting. A copy is also to be sent to the Registrar for registration.

ADVERTISEMENTS:

Section 165(3) provides that the Statutory Report must con­tain the following particulars:

(i) The total number of fully paid-up and partly paid-up shares allotted;

(ii) The total amount of cash received by the company in respect of the shares;

(iii) An abstract of the receipts, classifying them according to source and mention­ing the expenses incurred for commis­sion, brokerage etc.

(iv) The names, addresses and occupations of directors, auditors, managers and sec­retaries and changes of the names, ad­dresses etc.

(v) Particulars of contracts which are to be submitted to the meeting for approval, with proposed modifications, if any;

(vi) If any underwriting contracts have not been carried out, the reasons therefor;

(vii) The arrears due on calls from directors and others;

ADVERTISEMENTS:

(viii) Particulars of commissions and broker­ages paid to directors and managers.

Particulars as regards cash in the Statutory Report are to be certified as correct by the auditors of the company.

The members of the company who are present in the Statutory Meeting are at liberty to discuss any matter relating to the formation of the com­pany or arising out of the Statutory Report, whether previous notice has been given or not. But no reso­lution can be passed of which notice has not been given in accordance with the provisions of the Act.

If default is made in complying with the pro­visions of Section 165, every Director or any other officer of the company who is in default shall be punishable with a fine which may extend to Rs. 500.

Company Meeting Type # 2. Annual General Meeting:

General Meeting of a company means a meet­ing of its members for specified purposes.

There are two kinds of General Meetings:

(i) The Annual General Meeting and

(ii) Other General Meetings.

The statutory provisions regarding the Annual Gen­eral Meeting are:

(a) Section 166:

The first Annual General Meeting of a company may be held within a period of not more than 18 months from the date of its incorpora­tion. If such a meeting is held within the period, it is not necessary for the com­pany to hold any annual general meet­ing in the year of its incorporation or in the following year.

Subject to the above-mentioned provi­sion, a company must hold an Annual General Meeting each year. Not more than 15 months shall elapse between the date of one Annual General Meeting and the next. The Registrar may, for any special rea­son, extend the time of holding an An­nual General Meeting (other than the first Annual General Meeting) by a pe­riod not exceeding 3 months.

The notice, by which an Annual General Meeting is called, must specify it as such. Every Annual General meeting shall be called during business hours, on a day which is not a public holiday, at the Reg­istered Office of the company or at some other place within the town or village where the Registered Office is situated. The Central Govt. may exempt any class of companies from the provisions men­tioned in this paragraph.

The time of holding of the Annual Gen­eral Meeting may be fixed by the arti­cles of the company. A public company or a private company which is a subsidi­ary of a public company, may, by a reso­lution passed in one general meeting, fix the time for its subsequent general meet­ings. Other private companies may do so by a resolution agreed to by all the members thereof.

(b) Section 167:

If default is made in hold­ing an Annual General Meeting in ac­cordance with Sec. 166, the Regional Di­rector of the Company Law Board may, on the application of any member of the company, call or direct the calling of a general meeting. He may also give di­rections regarding the calling, holding and conducting the meeting. Such a meeting shall be deemed to be an An­nual General Meeting of the company

(c) Section 168:

If the provisions of Sections 166 and 167 are not complied with, the company and every officer of the com­pany be fined.

(d) Section 171:

A general meeting may be called by giving not less than 21 days’ notice in writing. The Annual General Meeting may be called with a shorter no­tice if it is agreed to by all the members entitled to vote in the meeting. The Court has no power to direct the calling of the Annual General Meeting.

Company Meeting Type # 3. Extraordinary General Meeting:

Any general meeting of the company which is not an Annual General Meeting or a Statutory Meet­ing is called Extraordinary General Meeting. An Extraordinary General Meeting is held for dealing with some business of special or extraordinary na­ture and which is outside the scope of the Annual General Meeting.

This meeting is also held to trans­act some urgent business that cannot be deferred till the next Annual General Meeting. This meeting may be called by the Directors or requisitioned by the member’s according to Sec.169 of the Companies Act, 1956. The Board of Direc­tors can be compelled to hold

Extraordinary Gen­eral Meeting upon request or requisition made for it, under the following conditions:

(a) The requisition must be signed by mem­bers holding at least 1/10th of the paid- up capital of the company, in the case of companies having a share-capital; and by members holding at least 1/10th of the total voting power in other cases.

(b) The requisition must set out the matters which will be considered at the meeting.

(c) The requisition must be deposited at the Registered Office of the company.

The Board must, within 21 days of the receipt of a valid requisition, issue a notice for the holding of the meeting on a date fixed within 45 days of the receipt of the requisition. If the Board does not hold the meeting as aforesaid, the requisitionists can call a meeting to be held on a date fixed within 3 months of the date of requisition.

Resolutions, properly passed at a meeting called by the requisitionists, are binding on the com­pany.

 (viii) Notice is not the same as a circular. No­tice is given to members but circulars are given to customers and public.

Company Meeting Type # 4. Class Meeting:

These meetings are held by a particular class of shareholders for the purpose of effecting varia­tion in the Articles in respect of their rights and privileges or for conversion of one class into an­other.

The provision for variation must be contained in the Memorandum or Articles and this variation must not be prohibited by the terms of issue of shares of that particular class. Such resolutions are to be passed by three-fourth majority of the mem­bers of that class.