The statutory meeting is the inaugural gathering of the shareholders of a publicly traded corporation. The holding period must be between one month and six months from the day when the company is authorized to begin operations. The event occurs only once during the lifespan of a firm. A privately-owned firm and a non-profit company that is limited by guarantee and does not have any shares are not required to conduct such a meeting.
According to Section 165 of the Companies Act, any public limited company that has shares or is limited by guarantee and has share capital is required to hold this meeting. This meeting is conducted on a singular occasion during the lifespan of a corporation. It is not necessary for a private corporation to conduct this meeting.
Meeting objectives:
- In order to adhere to the requirements outlined in section 165 of the Companies Act of 1956
- To authorize the official report
- The purpose of this communication is to apprise the shareholders of the establishment of the firm and its accomplishments.
- The purpose is to notify the shareholders about the preliminary expenses incurred by the promoters prior to the establishment of the firm.
- To notify the shareholders of any contractual agreements made by the company.
- Designate individuals to hold positions of authority.
- Legal Provisions of statutory meeting
Companies eligible to conduct such meetings: Statutory meetings can only be held by corporations that are either limited by shares or limited by guarantee and have share capital.
- Companies exempt from holding the meeting:
- A private corporation, whether it is an autonomous entity or a subsidiary of a public company.
- A public business without any issued shares or share capital
- A firm that is not limited in terms of its public ownership.
- This is a type of company that is publicly traded and does not have any shares of stock.
- A state-owned enterprise.
The time restriction for the meeting is determined by legislative regulations, which specify the period within which the meeting must be held.
- At minimum, a duration of one month.
- Within a maximum period of 6 months.
- Annual General meeting
An Annual General Meeting (AGM) is convened to facilitate communication and engagement between the company’s management and its shareholders. According to the Companies Act, 2013, it is mandatory to convene an annual general meeting to deliberate on the annual financial statements, appointment of auditors, and other related matters. In order to conduct the Annual General Meeting (AGM), a business must adhere to the rules outlined in the Companies Act of 2013.
Corporations are obligated to conduct an Annual General Meeting (AGM).
Every company, with the exception of One Person Company (OPC), is required to conduct an Annual General Meeting (AGM) at the conclusion of each fiscal year. A corporation is required to conduct its Annual General Meeting (AGM) within six months after the conclusion of the financial year, namely by September 30th each year. Please be aware that the duration between two consecutive annual general meetings must not exceed a period of 15 months.
However, during the first annual general meeting, the company has the option to conduct the AGM within a period of nine months following the conclusion of the initial financial year. If the first Annual General Meeting (AGM) has already taken place, it is unnecessary to have any further AGMs in the year of incorporation.
Steps to Conduct an Annual General Meeting (AGM)
The corporation is required to provide a conspicuous notice of 21 days to its members in order to convene the Annual General Meeting (AGM). The notification must include the location, date, and day of the meeting, as well as the scheduled time for the meeting. The announcement should include specify the agenda for the Annual General Meeting (AGM). The corporation is required to dispatch the notice of the Annual General Meeting (AGM) to the following recipients:
All individuals associated with the company, including the legal representative of a deceased member and the assignee of an insolvent member.
The company’s statutory auditor(s).
The individuals who have the position of director in the company.
The notice can be provided in written form using either speed post, registered post, or electronic means. The notice should be dispatched to the address of the member in accordance with the company’s data.
For electronic communication, the notice should be delivered to the member’s email address as recorded by the company. The notice might be either the body of an email or an attachment to an email. The notification for the Annual General Meeting (AGM) must be posted on the company’s website or any other website specified by the government.
If a minimum of 95% of the eligible voting members agree, an Annual General Meeting (AGM) can be scheduled with a notice period that is less than 21 days. The consent can be provided either in written form or by technological means.
What is the purpose of an Annual General Meeting (AGM)?
- The topics addressed or activities conducted during an Annual General Meeting (AGM) include the examination and approval of the audited financial statements.
- Examination of the Director’s report and auditor’s report.
- Announcement of dividend distribution to shareholders.
- Selection of new directors to succeed the departing directors.
- Selection of auditors and determination of the auditor’s compensation.
In addition to the regular business mentioned above, the corporation may also operate any additional business as a special endeavor.
- Extra ordinary meeting
An Extraordinary General Meeting (EGM) is a gathering convened by a corporation or organization to discuss and make decisions on urgent concerns that demand the immediate attention of high-ranking executives, the board of directors, and all shareholders. These matters cannot be postponed until the next regularly scheduled annual general meeting. The Extraordinary General Meeting (EGM) is scheduled at an unconventional time in order to discuss and resolve a critical situation.
Extraordinary General Meeting.
All actions conducted at an Extraordinary General Meeting (EGM) are considered to be of a special nature. For instance, the dismissal of a high-ranking executive could be the main topic of discussion at a special general assembly. An EGM, also known as a special/emergency general meeting, is a term used to refer to a specific type of meeting.
Convening an Extraordinary General Meeting (EGM)
As per the provisions of the Indian Companies Act of 2013, an extraordinary general meeting can be called by certain individual members or groups of members of a company who meet the specified criteria outlined below:
- If the company possesses a capital that is divided into shares
An Extraordinary General Meeting (EGM) can only be called by shareholders who possess at least 10% of the company’s paid-up capital. They are required to possess voting powers pertaining to the agenda at the time of filing the request.
- If the corporation lacks share capital
An Extraordinary General Meeting (EGM) can be convened by members who together possess a minimum of 10% of the overall voting authority of all eligible members on the date the request is made.
A request for an Extraordinary General Meeting (EGM) by the members is deemed valid if it explicitly explains the precise matter for convening the meeting, is properly signed by the members, and is submitted at the registered office of the company.
Upon receipt of a legitimate request, the company’s board of directors is obligated to convene an extraordinary general meeting within a period of three weeks. If the board fails to take action, the members have the authority to convene an Extraordinary General Meeting (EGM) within three months after submitting the request. An EGM meeting that meets the specified criteria can also be postponed to a later date.
The process of conducting an Extraordinary General Meeting (EGM)
Prior to convening an Extraordinary General Meeting (EGM), the board of directors concludes the resolutions that will be discussed by the members and/or shareholders during the meeting. Prior notice should be given to the members of the resolutions and their significance, allowing them ample time to study the subject and articulate their viewpoints and apprehensions during the meeting.
Unless explicitly specified in the company’s rules, a minimum of five members must be physically present at an Extraordinary General Meeting (EGM) for a public company, and a minimum of two members for any other type of corporation.
Typically, the chairman presides over the EGM and recites the resolutions. The board, who is anticipated to have a comprehensive understanding of the situation, evaluates the advantages of the decision to the members and responds to their inquiries.
Members cast votes in the shareholders’ and company’s best interests, and the outcome is announced. Members who are unable to attend the Extraordinary General Meeting (EGM) have the option to transfer their voting authority to another member, referred to as a “proxy.” Proxy voting regulations differ among organizations.
- Board meeting
A Board Meeting is a formal meeting of the board of directors of an organization and any invited guests, held at definite intervals and as needed to review performance, consider policy issues, address major problems and perform the legal business of the board. Presided over by a chairperson of the organization, the quorum, rules, and responsibilities for board meetings will be documented in the organization’s operating agreements and may need to meet government requirements. The finalized and approved record for a board meeting is called the minutes, a legal document published according to the rules governing that board’s operations.
What You Need to Do to Hold a Legal Board Meeting
- The appropriate governing body: The board meeting must be called by someone with the right amount of power. Of course, the company clerk (CS) is there to give permission for the board meeting. In the event that the company secretary is not available, the approved person who was chosen ahead of time will lead the board meeting.
- Enough Members: For a meeting to be effective, there must be a quorum, which is the minimum number of Directors needed to run the meeting.
- Giving the Right Notice : One of the most important things that needs to be done when planning a board meeting is giving enough notice. Before a board meeting can happen, formal notice has to be sent to every member.
- The right presiding officer: There must always be a chairman of the board present at the meeting.
- The Right Agenda: There is a set schedule for every board meeting that everyone must follow. The agenda lists the things that will be talked about at the board meeting. Anything else that wasn’t talked about in the meeting shouldn’t be taken into account.
