Company Meetings

A meeting may be generally defined as a gathering or assembly or getting together of a number of persons for transacting any lawful business. It is to be noted that every gathering or assembly does not constitute a meeting. Company meetings must be convened and held in perfect compliance with the various provisions of the Companies Act, 2013 and the rules framed thereunder.

The meetings of the company divided into two types:

1. Meetings of the Board of Directors and
2. Meetings of the Members of the Company

The decision making powers of a company are vested in the members and the directors. They exercise their respective powers through resolutions passed by them. General meetings of the members provide a platform to express their will in regard to the management of the affairs of the company.

“Meeting of Board” means a duly convened, held and conducted meeting of the Board or any Committee thereof.

Meetings of the board are significant in the light of running of the company more efficiently and effectively. Companies Act, 2013 mandates a company to hold minimal number of meetings of the board for its proper functioning. Board meetings are crucial for a company’s development as these formal meetings are held to devise policies, drive the management, strategize and evaluate the expectations of the stakeholders.

The meetings play an important role in a corporate democracy. Directors of the Company have to exercise most of their powers or duties at periodical meetings of the Board or Committee of the Board. Therefore, Companies Act, 2013 and the rules framed thereunder contained detailed provisions relating to frequency, convening and conduct of the meeting.

Section 173 of the Companies Act, 2013 provides that the first board meeting should be held within thirty days of the date of incorporation. Thereafter, there shall be minimum number of four board meetings every year and not more than one hundred and twenty days shall intervene between two consecutive Board Meetings.

The Board of directors of Equity Listed Company shall meet at least four times in a year, with a maximum time gap of one hundred and twenty days between any two meetings. (Regulation 17(2) of SEBI (LODR) Regulations, 2015).

In case of one-person company (OPC), small company, dormant company and private company which is start- up, at least one Board meeting should be conducted in each half of the calendar year and the gap between two meetings should not be less than ninety days. However, this provision would not apply to a one-person company in which there is only one director on its Board.

In case of Section 8 Company, the board of directors shall hold at least one meeting within every six calendar months.

Specified IFSC Public Company shall hold the first meeting of the Board of Directors with in sixty days of incorporation and thereafter hold at least one meeting of the Board of Directors in each half of a calendar year.

Meetings of the Board Committees: If authorized by articles, the directors have power to delegate their authority to a committee unless prohibited or limits prescribed in the Act. Committees should meet as often as required and at least as often as stipulated by the Board while constituting the Committee.

Any Director of a company may, at any time, summon a Meeting of the Board, and the Company Secretary or where there is no Company Secretary, any person authorized by the Board in this behalf, on the requisition of a Director, shall convene a Meeting of the Board, in consultation with the Chairman or in his absence, the Managing Director or in his absence, the Whole-Time Director, where there is any, unless otherwise provided in the Articles.

Directors may participate in the meeting either in person or through video conferencing or other audio visual means as prescribed, which are capable of recording and recognizing the participation of the directors and of the recording and storing the proceedings of such meetings along with date and time.

“Quorum” means the minimum number of Directors whose presence is necessary for holding of a Meeting. One third of total strength or two directors, whichever is higher, shall be the quorum for a Board meeting. For the purpose of determining the quorum, the participation by a director through Video Conferencing or other audio visual means shall also be counted.

Leave of absence shall be granted to a Director only when a request for such leave has been communicated to the Company Secretary or to the Chairman or to any other person authorized by the Board to issue Notice of the Meeting.

The office of the director shall become vacant in case the director absents himself from all the meetings of the Board held during a period of twelve months with or without seeking leave of absence of the Board.

If any default is made in complying with the provisions of section 118 of the Companies Act, 2013 in respect of any meeting, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty off rupees five thousand.

The decision making powers of a company are vested in the members and the directors. They exercise their respective powers through resolutions passed by them. General meetings of the members provide a platform to express their will in regard to the management of the affairs of the company. Convening of one such meeting every year is compulsory. Holding of more general meetings is left to the choice of the management or to a given percentage of shareholders to exercise their power to compel the company to convene a meeting.

The meetings of the members of the company are two types:

1. Annual General Meeting (AGM)
2. Extra Ordinary General Meeting (EGM)

Annual general meeting (AGM) is an important annual event where members get an opportunity to discuss the activities of the company. Section 96 provides that every company, other than a one-person company is required to hold an annual general meeting every year.

The meeting to be held annually for seeking approval to certain ‘ordinary business’ is called Annual General Meeting. Convening of one such meeting every year is compulsory:

1. Annual general meeting should be held once in each calendar year.
2. First Annual General Meeting of the company should be held within 9 months from the closing of the first financial year. Hence it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation.
3. Subsequent annual general meeting of the company should be held within 6 months from the date of closing of the relevant financial year.
4. The gap between two annual general meetings shall not extend 15 months.

Note: One Person Company exempted from holding Annual General Meeting (AGM).

In case, it is not possible for a company to hold an annual general meeting within the prescribed time, the Registrar may, for any special reason, extend the time within which any annual general meeting shall be held. Such extension can be for a period not exceeding 3 months. No such extension of time can be granted by the Registrar for the holding of the first annual general meeting.

An annual general meeting can be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday. It should be held either at the registered office of the company or at some other place within the city, town or village in which the registered office is situated.

Annual general meeting of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance.

Punishable with a fine of Rs. 100,000/-

There are so many matters relating to the business of a company, which require approval or consent of members in general meeting. It is not always possible for consideration of such matters to wait until the next annual general meeting. The articles of association of the company make provisions for convening general meeting other than the annual general meeting. All general meetings other than annual general meeting are called extra-ordinary general meetings (EGM).

The EGM can be called and held by the board of directors Suo Motu or by on requisition of members or by requisitionists or by Tribunal.

Quorum refers to the minimum number of members required to constitute a valid meeting. Following are the minimum numbers provided in section 103, for various categories of companies. However, the Articles of Association of the company may provide for a higher number.

Public Company

1. 5 members personally present if the number of members as on the date of meeting is not more than 1000;
2. 15 members personally present if the number of members as on the date of meeting is more than 1000;
3. 30 members personally present if the number of members as on the date of the meeting exceeds 5000.

Quorum for General Meetings

2 members personally present, shall be the quorum for a meeting of the company.