Chapter Five: MEETINGS AND RESOLUTIONS
WHAT IS MEETING?
An assembly of people especially the members of a society or committee for discussion.
(Wikipedia)
OBJECTIVES OF MEETING
The corporate system of business organization is essentially democratic in structure. The
business of the company is carried on by officials acting under the orders of the board of
directors, which is the executive head of the company. But the Directors are elected by the
Board by the shareholders of the company and must abide by the wishes of the shareholders
and expressed in Resolution passed in meeting concerned for the purpose.
TYPES OF MEETINGS
The Companies Act provides for the following types of Meetings;
1. Meeting of the Shareholders
2. Statutory Meeting
3. Annual General Meeting
4. Extraordinary General Meeting
5. Class Meeting
6. Meeting of the Creditors, Debenture holders, Directors
RULES OF PROCEEDING REGARDING MEETINGS
The general rules of procedures as regards shareholders meeting can be summarized as follows:
1. Paper Authority: The Board of Directors is the proper authority to pass a resolution at a
duty convened Board meeting to convene a meeting.
2. Notice: Notice of every meeting must be given to all members entitled to vote upon the
matters, decreased or insolvent members coming under the category and the auditors of
the company. Notice must be given at least 21 days before the meetings.
3. The Agenda – The Explanation Statement: The statement must contain all the material
facts relating to each item of the business, indicating the nature and extent of the interest
of every director and the managers of the company.
4. The Quorum: Quorum means the minimum number of members required to hold a
meeting. Quorum is constituted by 5 members personally present in the board meeting and
2 members, personally present in the case of other companies.
5. Chairman: The members shall elect a Chairman form amongst themselves.
6. Proxy: Any member entitled to attend and vote in a meeting can appoint another person to
attend and vote on his behalf.
7. Method of Voting: Resolutions are to be voted upon in the first instance, by show of hands.
The Chairmen’s declaration of the results of voting by show of hands is conclusive.
ANNUAL GENERAL MEETING
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 shall not be
necessary for the company to hold any annual general meeting in the year of its incorporation
or in the following year.
PURPOSES OF ANNUAL GENERAL MEETING (WIKIPEDIA)
An organization may conduct its business at the annual general meeting. The purposes of
annual general meeting are discussed below:
1. The Board of Directors make important decisions regarding the organization and inform the
members of previous and future activities at the annual general meeting.
2. At this meeting, the shareholders receive copies of the company’s accounts, review fiscal
information, ask any questions regarding the directions the business will take in the future.
3. At the annual general meeting, the president or chairman of the organization presides over
the meeting and may give an overall status of the organization.
4. The secretary prepares the minutes and ask to read important papers.
5. The treasurer present a financial report.
WHAT IS RESOLUTION?
The act of finding an answer to a conflict in the organization. (Merriam-Webster)
PROCEDURES FOR PASSING A SPECIAL RESOLUTION
A Special Resolution must be passed in a general meeting of members called in the usual way
with the usual notice.
1. The notice calling the general meeting must specify that a special resolution will be moved.
2. The number of votes casts in favor of the resolution whether by show of hands or by poll,
must be at least three times the number cast against it.
Special Resolution is required for the following issues:
a) Alteration of Memorandum for changing the place of registered office from one state to
another.
b) Change of name of the company with the consent of the Central Government.
c) Alteration of the Articles of the company.
d) Reduction of share capital.
e) Variation of shareholder’s right.
f) Payment of interest out of capital.
g) Winding up a company voluntarily.