Law meetings (companies act)

Statutory Meeting
A public company limited by shares or a guarantee
is required to hold a statutory meeting.

• Statutory meeting is held only once in the lifetime
of the company.
• Such a meeting must be held within a period of
not less than one month or within a period not
more than six months from the date on which it is
entitled to commence business i.e. it obtains
certificate of commencement of business.

Purpose
• The purpose of the meeting is to enable
members to know all important matters
pertaining to the formation of the company
and its initial life history.

Notice Period
• A notice of at least 21 days before the meeting
must be given to members unless consent is
accorded to a shorter notice by members.

Contents
• The Board of Directors must prepare and send to every
member a report called the "Statutory Report" at least
21 days before the day on which the meeting is to be
held.
• The report should be certified as correct by at least two
directors, one of whom must be the managing director,
where there is one, and must also be certified as
correct by the auditors of the company.
• A certified copy of the report must be sent to the
Registrar for registration immediately after copies have
been sent to the members of the company.

Breach
• If default is made in complying with the above
provisions, every director or other officer of the
company who is in default shall be punishable
with fine upto Rs. 500. The Registrar or a
contributory may file a petition for the winding
up of the company if default is made in delivering
the statutory report to the Registrar or in holding
the statutory meeting on or after 14 days after
the last date on which the statutory meeting
ought to have been held.

B. Annual General Meeting

• Must be held by every type of company, public or
private, limited by shares or by guarantee, with or
without share capital or unlimited company, once
a year.
• Every company must in each year hold an annual
general meeting. Not more than 15 months must
elapse between two annual general meetings.
However, a company may hold its first annual
general meeting within 18 months from the date
of its incorporation

Contents
• A notice of at least 21 days before the meeting must be
given to members. The notice must state that the meeting
is an annual general meeting. The time, date and place of
the meeting must be mentioned in the notice. The notice
of the meeting must be accompanied by a copy of the
annual accounts of the company, director’s report on the
position of the company for the year and auditor’s report
on the accounts. Companies having share capital should
also state in the notice that a member is entitled to attend
and vote at the meeting and is also entitled to appoint
proxies in his absence. A proxy need not be a member of
that company. A proxy form should be enclosed with the
notice. The proxy forms are required to be submitted to the
company at least 48 hours before the meeting.

• The AGM must be held on a working day during
business hours at the registered office of the
company or at some other place within the city,
town or village in which the registered office of
the company is situated. The Central Government
may, however, exempt any class of companies
from the above provisions. If any day is declared
by the Central government to be a public holiday
after the issue of the notice convening such
meeting, such a day will be treated as a working
day.

• In case of default in holding an annual general
meeting, the following are the consequences :-
• Any member of the company may apply to the
Company Law Board. The Company Law Board
may call, or direct the calling of the meeting.
• Fine which may extend to Rs. 5,000 on the
company and every officer of the company who is
in default may be levied and for continuing
default, a further fine of Rs. 250 per day during
which the default continues may be levied.

Business to be Transacted at Annual
General Meeting :
• At every AGM, the following matters must be discussed and
decided. Since such matters are discussed at every AGM,
they are known as ordinary business. All other matters and
business to be discussed at the AGM are special business.
• The following matters constitute ordinary business at an
AGM :-
• Consideration of annual accounts, director’s report and the
auditor’s report
• Declaration of dividend
• Appointment of directors in the place of those retiring
• Appointment of and the fixing of the remuneration of the
statutory auditors.

C. Extraordinary General Meeting

• Every general meeting (i.e. meeting of
members of the company) other than the
statutory meeting and the annual general
meeting or any adjournment thereof, is an
extraordinary general meeting.

• Such meeting is usually called by the Board of
Directors for some urgent business which
cannot wait to be decided till the next AGM.
Every business transacted at such a meeting is
special business. An explanatory statement of
the special business must also accompany the
notice calling the meeting.

• The Articles of Association of a Company may
contain provisions for convening an extraordinary
general meeting. Eg. It may provide that "the
board may, whenever it thinks fit, call an
extraordinary general meeting" or it may provide
that "if at any time there are not within India,
directors capable of acting who are sufficient in
number to form a quorum, any director or any
two members of the company may call an
extraordinary general meeting".

• A meeting cannot be held unless a proper
notice has been given to all persons entitled
to attend the meeting at the proper time,
containing the necessary information. A notice
convening a general meeting must be given at
least 21 clear days prior to the date of
meeting.

Requisites of a Valid Meetings
• It must be properly convened. The persons calling the
meeting must be authorised to do so.
• Proper and adequate notice must have been given to all
those entitled to attend.
• The meeting must be legally constituted. There must be a
chairperson.
• The rules of quorum must be maintained and the
provisions of the Companies Act, 1956 and the articles
must be complied with.
• The business at the meeting must be validly transacted..
The meeting must be conducted in accordance with the
regulations governing the meetings.

Chairman of the meeting
• The chairman is the head of the meeting. Generally,
the chairman of the Board of Directors is the Chairman
of the meeting. Unless the articles otherwise provide,
the members present in person at the meeting elect
one of themselves to be the chairman thereof on a
show of the hands. If there is no Chairman or he is not
present within 15 minutes after the appointed time of
the meeting or is unwilling to act as chairman of the
meeting, the directors present may elect one among
themselves to be the chairman of the meeting.

Duties of the chairman

• Without a chairman, a meeting is incomplete.
The chairman is the regulator of the meeting. His
duties include the following :-
• He must ensure that the meeting is properly
convened and constituted i.e. that proper notice
has been given, that the required quorum is
present, etc.
• He must ensure that the provisions of the act and
the articles in regard to the meeting and its
procedures are observed.

• He must ensure that business is taken in the
order set out in agenda and no business which
is not mentioned in the agenda is taken up
unless agreed to by the members.
• He must impartially regulate the proceedings
of the meeting and maintain discipline at the
meeting.

• He may exercise his powers of adjournment of
the meeting, should he in good faith feel that
such a step is necessary. The chairman has the
power to adjourn the meeting in case of
indiscipline at the meeting. A chairman however
does not have the power to stop or adjourn the
meeting at his own will and pleasure. If he
adjourns the meeting prematurely, the members
present may decide to continue the meeting and
elect another chairman and proceed with the
business for which it was convened.

Law meetings (companies act)

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