Kinds Meetings Companies Act 2013: A meeting is generally a gathering of the members of a company; a meeting plays a vital role in the overall functioning of a company. A meeting must be constituted by two persons at least, but under exceptional circumstances, it can be done by one.
‘Company Meeting’ is generally a coming together of at least two persons to either transact any ordinary or special business for the purpose of the law. These meetings are classified based on who holds the meeting, which is further discussed in this article.
- Meetings Held by Shareholders
- Meetings Held by Directors
- Meetings Held by Creditors
- Meetings Held by Debenture Holders
Every public company with a share capital must convene a general meeting of the shareholders within not less than 1 month and not more than 6 months after the date on which it is authorised to commence its business. This is the first meeting of the company’s shareholders, and it is held once in the company’s whole life.
Annual General Meeting
In Section 96 of Companies Act 2013, the Annual General Meeting of companies, every public or private company other than a one-person company shall conduct an annual general meeting other than any other form of meeting, and the company shall ensure that there is no gap of 15 months or more between two annual general meetings.
It is required to convene the first AGM within 9 months from the end of the first financial year to decide the overall progress of the company as well as to plan future courses of action.
- Venue: Such meeting is held at a Registered Office of the Company or any other such place in the city where such Registered Office is situated.
- Timings: The meetings are held between 9.00 am – 6:00 pm and not on any public holiday declared by the Central or State Government.
- Quorum of the Meeting:
- For a Public Company: The quorum of the company shall be 5 directly present in the event if the overall number of members at the meeting date does not surpass 1000, 15 in the case of more than 1000 but less than 5000, and 30 in the event of more than 5000 members at the meeting date.
- For a Private Company: Only 2 members can make up the quorum of the meeting if they are directly present.
- Time Difference Between Meetings: The gap between the two consecutive meetings should not be more than 15 months. After conducting the first AGM, the subsequent AGMs need to be conducted within 6 months from the end of the financial year. If any urgent circumstances or emergencies arose when the company wasn’t able to perform the AGM, the Tribunal then may grant the extension of 3 months but said extension is not available in the first AGM. Therefore, the first AGM must be conducted within 9 months from the end of the financial year.
- NCLT’s Powers: May call or direct to conduct such meeting u/s 97 of CA’13 when an application is filed by a member if meeting not conducted in due time.
- Penalty for Defaulters: Under section 99 – For Company and every such defaulting Officer – Rs. 1 Lakh, and if the default continues, then Rs. 1000 per day.
Extraordinary General Meeting
A statutory meeting and an annual general meeting of a company are called ordinary meetings.
Any meeting other than these meetings is called an extraordinary general meeting which can be called under section 100 of CA’13. It is held to transact some urgent or special business that cannot be postponed until the next annual general meeting.
It can be called through the following ways –
- By Board: On a Suo-moto basis, the same can be held in any part of the country.
- By requisition of eligible members: If the company has Share Capital, then members holding at least 1/10th of such Share Capital, and if not having Share Capital, then members holding at least 10% of the total voting powers in that company can request to call for such meeting. Such notice has to be well written and specify the nature of business, and duly signed by all the members or anyone authorised person acting on behalf of all. And Board needs to call a meeting within 21 days of getting such request or a maximum of 45 days by giving such notice to such members before 3 days of conducting such meeting.
- By Requisitionists (provided if Board fails to do so): If Board failing to conduct meeting within 45 days, then the members can call for a meeting within 3 months from the original request made to Board at first instance, and here the members have all the rights to have their name on the main list of members and Board can’t deny this, and also need to accept such changes that might have occurred between 21st to 45th day of the date of the notice provided to Board at first instance.
- By Tribunal under section 98: In which it can conduct the meeting on its own or any request received by the member of such company.
Venue: At Registered Office or any such place in the city where such Registered Office is situated.
Under the Companies Act, 2013, various kinds of shareholders and creditors hold class meetings under different circumstances. Such meeting is convened by a particular class of shareholders only and only if they think that their rights are being altered or if they want to vary their attached rights, as mentioned under section 48 and 232 of CA’13 also if, under the Mergers and Amalgamation scheme, meetings of particular shareholders and creditors can be convened if their rights or privileges are being varied to their interests in any such company.
Meetings of Board of Directors
The directors of a company exercise most of their powers in a joint meeting called the meeting of the Board.
In the case of every company, a meeting of the Board of Directors must be held:
- At least once in every three months, and
- At least four such meetings shall be held every year. [Sec. 285]
In other words, no three months should pass without directors’ meetings being held, and no year should expire without at least four directors’ meetings having been held in it.
The object of this section is to ensure that the Board meetings are held at reasonably frequent intervals so that the directors may be in touch with the management of the company’s affairs.
Meetings of the Committees of Directors
The Board of Directors form certain committees and entrust some of its powers to them. These committees consist of only directors. The delegation of powers to such committees is to be authorised by the Articles of Association and should be according to the provisions of the Companies Act, 2013.
In a large company, routine matters like Allotment, Transfer, and Finance are handled by the Board of directors’ sub-committees. The meetings for such committees are held in the same way as those of Board Meetings.
The meetings of the creditors are held when the company proposes to make a scheme for an arrangement with the company’s creditors. Section 391 to 393 of the Companies Act 2013 gives powers to the company to compromise with the creditors and lay down the procedure of the action.
Meetings of the debenture holders are held as per the conditions contained in the debenture trust deed. These meetings are called from time to time where the interests of debenture holders are involved at the time of reorganisation, reconstruction, amalgamation, or winding up of the company.
The rules and regulations entered in the trust deed relating to the notice of the meeting, the appointment of a chairman of the meeting, passing the resolutions, quorum of the meeting and the writing and signing of minutes.