Voting: U/s (47) & Proxy: U/s (105)

Key Points:

1. Voting Rights
2. Polling Methods.
3. Demand for Poll Counting Under Section (109).
4. Time of Poll.
5. Postal Ballot: Under Section (110).
6. Meaning of Proxy U/s (105)
7. Statutory Provisions Regarding Proxy.

 

Link : https://smckk14.blogspot.com/2023/07/quorum-under-section-103-resolution.html

Voting: Under Section (47)

1. Voting Rights:

(i) Voting Rights in case of Equity Shareholders -

Every member who has equity share has the right to vote on every resolution in the meeting of the company.

(ii) Voting Rights for Preference Shareholders –

Preference Shareholders have limited voting rights. A preference shares has the voting rights only if a resolution affects his rights. He will have proportionate voting rights on the basis of his share in paid up preference share capital.

Following Resolution directly affect the Rights of Preference Shareholders -

(a) In case of liquidation of company.

(b) Rate of change in dividend.

(c) Change in repayment period of capital.

(d) Agreement or rearrangement of company including amalgamation.

(e) Redemption or repayment of his share capital.

(iii) Preference Shareholders are entitled to vote on any resolution passed or moved in a meeting if on such preference shares, dividend for two or more years are in arrears.

(iv) Section 47 shall not apply to a private company where MOA or AOA of the company so provide.

2. Polling Methods:

(i) By Acclamation of Voice - (Aye, No) -

This method is used when decision is expected unanimously or almost unanimously.

(ii) By Show of Hands -

Most used method. One member can cast only one vote irrespective of his shareholding. If authorised by AOA, proxy may also vote in this method.

(iii) By Division -

In this method, to know the consent of members, the Chairman divides them into two categories.

(iv) By Ballot.

(v) By Electronic means U/s 108 -

This method is made available by Central Government to certain class of companies.

3. Demand for Poll Counting Under Section (109):

Chairman of the meeting may, at his own will or on demand of members, may order for counting. Demand for counting maybe raised before or after declaration of result by show of hands.

In following conditions, it is compulsory for the Chairman to order for counting -

(a) In case of Public company, on demand of 5 members present physically or proxy, who have right to participate in meeting.

(b) In case of Private company, if demand made by one member or one proxy, and number of members present is 7 or less. If number of present members is more than 7, and 2 members demand for poll.

(c) On demand of members present who have at least 10% of total voting power.

(d) According to companies (amendment) Bill, 1987, owner (s) of at least 50000 shares may also demand either present or proxy.

(e) On demand of members present who have at least 10% of total paid up capital.

4. Time of Poll:

If demand for poll made regarding adjourned or election of Chairman, arrangement of counting to be made at once. In other matters within 48 hours.

5. Postal Ballot: Under Section (110):

(i) Regarding those matters, in which Government of India permits.

(ii) In other matters, the ordinary business in which director's may take the decisions. Such transaction made be dealt by postal ballot in place of passing in General Meeting.

(iii) If in any resolution, consent is given by required majority of shareholders through postal ballot, the resolution shall be considered as duly passed in General Meeting called for this purpose.

(iv) Circulation of Member’s Resolution under section (111)

(v) Restrictions on Voting Rights under section (106)

(vi) Rights of member to use his votes differently.

(vii) Matter of taking Poll and Scrutiny of Poll.

Proxy: Under Section (105):

6. Meaning of Proxy U/s (105):

Proxy is a person appointed by a member to attend and vote at a meeting in the absence of member.

Proxy also refers to the instrument by which a person is appointed as proxy.

A proxy is not entitled to speak in meeting.

7. Statutory Provisions Regarding Proxy:

(i) To be appointed by a member -

Proxy need not be member of the company.

In the following conditions, provisions of proxy is not applicable, unless otherwise provided by AOA -

(a) Member of the company without share capital has no right to appoint proxy.

(b) Member of a private company cannot appoint more than one proxy in one meeting.

(c) Proxy has power to vote in the meeting in which counting of votes is required.

(d) Member of a public company may appoint more than one proxy, if that member has right to give more than one vote in the meeting.

(ii) Description of appointment of proxy in notice of meeting under section 105 (2) -

Notice of meeting must contain the statement that a member who is entitled to attend and vote in the concern meeting may appoint a proxy, and that the proxy need not be a member of company. The statement must appear with reasonable prominence in the notice.

This is applicable to companies having a share capital, or those companies whose articles permit voting through proxy. A member of a company can only appoint another member of the same company as a proxy.

Any violation with requirement of the statement in the notice of meeting would attract penalty of ₹ 5000 on each defaulting officer of company.

(iii) Period of submitting the form of proxy under section 105 (4) -

Any provisions contained in AOA which specifies or require a longer period than 48 hours before meeting, for depositing with the company or any other person any instrument appointing a proxy or any other document necessary to show the validity or otherwise relating to the appointment of a proxy in order that the appointment maybe effective at such meeting, shall have effect as if a period of 48 hours had been specified in or required by such provisions for such deposit.

(iv) Inviting any person to be appointed as proxy is punishable -

If, for meeting, invitation to appoint as proxy, a person or one of persons specified in the invitations are issued at expenses of company to any member entitled to have a notice of the meeting sent to him and to vote there at by proxy, every office who issues invitation or permits their issue shall be liable to penalty of rupees 15000.

An officer shall not be liable by reason only of the issue to a member at his request in writing of a form of appointment naming the proxy, or of a list of persons willing to act as proxies, if the form or list is available on request in writing to every member entitled to vote at the meeting by proxy.

(v) Proxy form must be written and signed -

The institution appointing a proxy shall -

(a).be in writing and (b) be signed by the appointer or his attorney duly authorised in meeting or, if the appointer is a body corporate, be under its seal or be signed by an officer or attorney duly authorised by it.

(vi) Format of proxy form should be as per schedule II.

(vii) Inspection of proxy form -

Each member who has Right to Vote, may inspect the proxy forms before 24 hours of beginning the meeting till the end of meeting, during business hours, if he has informed the company in this respect to the company at least before 3 days of meeting.

(viii) Other Provisions -

(a) First right to vote belongs to shareholder –

If member and his proxy both present in the meeting. If proxy votes in presence of member, it will be treated as the member had no objection.

(b) Vote by proxy on insanity or death of the member is valid –

Valid only if the company has not any information regarding insanity or death of member.

(c) Rights of proxy representing the company –

If a company is the member of another company, it can appoint its proxy to present and vote in the meeting. Such proxy has right to speak in addition to voting.

(d) Proxy appointed by the president or governor is considered as a member –

Such proxy can appoint any person as his proxy.

(e) A person cannot be appointed as proxy for more than one meeting under one proxy form. i.e. for different meetings, different proxy forms to be submitted in the company. 

Quorum: Under Section (103) & Resolution/Motion: Under Section (114 to 117).

Key Points:

A. Quorum Under Section (103): Rules & Regulations.
B. Resolution / Motion: Under Section (114 to 117)
1. Meaning of Resolution / Motion.
2. Types of Resolution.
   (A) Ordinary Resolution.
3. Business (matters) considered with Ordinary Resolution.
   (B) Special Resolution.
4. Business (matters) with Special Resolution.
5. Resolution Requiring Special Notice.
6. Procedure for Special Notice.

Link : https://smckk14.blogspot.com/2023/07/meetings-of-creditors-debenture-holders.html

 

A. Quorum U/s (103): Rules & Regulations

1. Unless the AOA provides for a large number -

(a) In case of Public Company -

(i) 5 members personally present if number of members as on the date of meeting is not more than 1000,

(ii) 15 members personally present if number of members as on the date of meeting is more than 1000 but up to 5000,

(iii) 30 members personally present if number of members as on the date of meeting exceeds 5000.

(b) In case of Private Company, two members personally present.

2. If Quorum is not present within 30 minutes from the time appointed -

(a) The meeting shall stand adjourned to the same day in next week at same time and place, or to such other date and such other time and place as the board may determine, or

(b) The meeting, if called by requisitions under section (100), shall stand cancelled.

Provided that in case of an adjourned meeting or of a change of day, time or place of meeting under clause (a), the company shall give not less than 3 days' notice to the members individually or by publishing an advertisement in newspapers (one in English and one in vernacular, any) which is in circulation at the place where the registered office of the company is situated.

3. If at the adjourned meeting also, quorum is not present within 30 minutes from the time appointed, the members present shall be the quorum.

While calculation of quorum, proxy is not considered. AOA may determine the quorum but not less or more than provisions of Companies Act.

Exception - In following case, quorum will be accepted as it is -

(i) Meeting called by Central Government.

(ii) Class Meetings.

4. Quorum for meeting of Board of Directors -

If otherwise provided in AOA, 1/3rd of total directors or 2 directors, whichever is more shall be the quorum.

B. Resolution / Motion: under section (114 to 117):

1.Meaning of Resolution / Motion:

When a proposed resolution or motion is accepted with required majority of shareholders, it converts into resolution. i.e. Accepted motion is resolution.

2. Types of Resolution: Under section (114 to 115):

(A) Ordinary Resolution:

When a resolution is passed by simple majority of votes, it is called "Ordinary Resolution".

A resolution shall be an ordinary resolution in the notice required under this Act has been duly given and it is required to be passed by the votes cast, whether on a show of hands, or electronically or on a poll, as the case maybe, in favour of the resolution including the casting vote, if any, of the Chairman, by members who, being entitled so to do, vote in person, or where proxies are allowed, by proxy or by postal ballot, exceed the votes, if any, cast against the resolution by members, so entitled and voting.

If provided in articles, information about passing Ordinary Resolution to members is essential otherwise not ordinary resolution are passed in General Meetings and notice in this regard is sent at least before 21 days but there is no motion about Ordinary Resolution in the notice.

In case of statutory General Meeting, all the resolution to be passed must be pre-informed to the members whether it is ordinary resolution or special resolution.

3. Business (matters) considered with Ordinary Resolution:

(I) Ordinary Business -

(i) Adoption of final accounts of company.
(ii) Adoption of reports of directors and auditors.
(iii) Declaration of Dividend.
(iv) Appointment of auditor and determining their remuneration.
(v) Appointment of new directors in place of retiring directors.

(II) Special Business -

(i) Accepting a statutory report.
(ii) Issue of shares at discount.
(iii) Alteration in share capital.
(iv) Increase or decrease in number of directors as given in AOA.
(v) Removal of Director.
(vi) Appointment of sole selling agent.
(vii) Authorizing directors to sell the business of company.
(viii) Voluntary winding up in specific cases.
(ix) Any other business according to provisions of AOA.

(B) Special Resolution -

A resolution is known as "Special Resolution", when -

(i) In the notice of General Meeting, it has been clearly mentioned that this (such) resolution shall be presented with intention of being Special Resolution.

(ii) Notice of General Meeting has been sent in according to Companies Act, (21 days before).

(iii) 3/4th or more votes must be in favour of resolution.

There is no provisions for vote of Chairman. A copy of Special Resolution must be sent to the ROC within 30 days of passing it.

4. Business (matters) with Special Resolution:

(i) Alteration in MOA.

(ii) Alteration in AOA.

(iii) Creation of Reserve capital.

(iv) Redemption in share capital.

(v) Keeping registers and returns at another place other than registered office.

(vi) Appointment of sole selling agent for the company having paid up capital of rupees 50 lacks or more.

(vii) Payment of interest out of capital.

(viii) Determining the liability of directors or other officers of the company.

(xi) To demand for investment.

(x) Providing a director any office of profit.

(xi) For appointment or reappointment of auditors, if the government or public financial institution have ownership on 25% or more in subscribed share capital.

(xii) Granting of loan to the companies come under same management.

(xiii) To apply in the court for compulsory liquidation.

(xiv) Determining remuneration of directors (if given in AOA)

(xv) For voluntary liquidation.

(xvi) Implement of Table 'F' of Scheme I.

(xvii) In case of voluntary liquidation, giving right to accept the share of other companies in return to sale of assets of company.

(xviii) Alteration in rights of any Class of shareholders.

(xix) Alteration in basic structure of company.

(xx) Any other business, for which, special resolution is compulsory as provided in AOA.

5. Resolution Requiring Special Notice:

When members of a company want to move any resolution in a General Meeting then members with prescribed (1%) voting power of shares, give notice to the company at least 14 days before the date of the meeting at which the resolution is to be moved. Such notice by members to the company is called "Special Notice".

6. Procedure for Special Notice:

(i) Signing of special notice

(ii) Notice to the company

(iii) Receipt of notice

(iv) Publication of notice -

If it is not practicable to give the notice in same manner as it gives notice of any General Meeting, the notice shall be published in English and vernacular language, newspapers, both have wide circulation in the state where registered office of the company is situated.

Such notice shall also be posted on the website of company. The notice shall be published at least 7 days before the meeting, exclusive of the day of publication of the notice and day of the meeting.

Special Notice can be given by such number of member (s) -

(i) Holding not less than 1% of total voting power, or

(ii) Holding shares on which an aggregate sum of not less than rupees 5 lakh has been paid up on the date of the notice.

Special Notice Shall be sent by members to the company not earlier than 3 months but at least 14 days before the date of meeting at which the resolution is to be moved.

After receipt of Special Notice, the company shall give its members the notice of resolution at least 7 days before the meeting. 

Meetings of Creditors, Debenture holders and Contributories:

Key Points:

1. Meetings of Creditors.
2. Notice of Meeting of Creditors.
3. Procedure of Meeting of Creditors.
4. Meeting of Debenture holders.
5. Notice of Meeting Under Section (101).
6. Who can send the Notice?
7. Period of Notice.
8. Contents of notice Under Section 100 (2).
9. Persons to whom Notice must be given Under Section 101 (3).
10. Method of Service (giving) of Notice.
11. Duties of Secretary regarding Notice.
12. Statement to be Annexed with Notice Under Section (102).

 

Link : https://smckk14.blogspot.com/2023/07/company-meetings-meetings-of-directors.html

1. Meetings of Creditors:

This meeting is meant by a meeting arranged by the company to discuss any plan / scheme for arrangement with its creditors.

Creditors Meetings are also organised in case of Creditors Voluntary Winding up. In such a case, the company calls meeting on the day at which the resolution for voluntary winding up is to be proposed. The notice is sent by the post to the creditors and published in at least two newspapers informing where the meeting to be conducted.

(i) Meeting of Creditors is conducted according to provision under section 108, 109, 110 and 111. (Voting)

(ii) In this meeting, the creditors may decide to approve, modify or reject the plan of repayment.

(iii) If modifications are suggested by the creditors, consent of the debtor is obtained for each modification.

(iv) On sufficient reason, the creators meeting may be adjourned for a period of not more than 7 days at a time.

2. Notice of Meeting of Creditors:

Notice is hereby given that, a meeting of the creditors (name of company) will be held at (address) on (date and time).

The winding up of the company commenced on (date) and I was appointed liquidator by resolution of the members of the company. As the directors declared that the company would be able to pay its debts in full within a period of (period) offer commerce winding up, the liquidation is proceeding as a member’s voluntary winding up.

I have formed the opinion that the company will not be able to pay its debts in full within that period and this meeting is summoned in order that the creditors may, if they so wish, exercise their right, the appoint some person other than myself to be liquidators of the company for the purpose of winding up the affairs and distributing the assets of the company.

A statement of the assets and liabilities of the company will be laid before the meeting.

3. Procedure of Meeting of Creditors:

In the meeting, the Board of Director (s) must present a statement of the financial position of the company along with a list of creditors and the projected payment of creditors.

Following steps may be taken with 2/3rd majority –

(i) If it is in the interest of all parties that the company wound up on the voluntary basis, the company would wound up voluntarily.

(ii) If the company may not be able to pay in full, then a resolution can be passed for winding up of the company by a Tribunal.

The notice of any resolution passed in meeting of the creditors must be filed with the registrar within a period of 10 days.

In case of violation by the company, it will be punished with fine of minimum ₹ 50,000 and maximum ₹ 2 lakh and director who is in default with 6 months of Jail along with minimum ₹ 50000 and maximum ₹ 2 lakhs or with both.

4. Meeting of Debenture holders:

Companies have the right to issue debentures and to implement the process of Meeting of Debenture holders. It is between Board of Directors and debenture holders to discuss rights and responsibilities related to debentures. This meeting is conducted as per provisions mentioned in ‘Debenture Trust Deed’. This meeting is called from time to time when the interest of debenture holders are involved at the time of reorganisation, amalgamation, reconstruction or winding up of the company. The rules and regulations mentioned in the deed are related to the notice of meeting, appointment of chairman of the meeting, passing resolution, quorum signing and minutes of the meeting.

5. Notice of Meeting under section (101):

Meaning –

It is necessary for a meeting to be valid that its notice must be sent through appropriate authority in proper format. Notice must be given to the persons who are eligible to attend meeting. In the notice, the concerned persons are informed about date, time, place and agenda of the meeting.

6. Who can send the Notice?  

Normally, the Board of Director sends the notice of meeting but this may be delegated by the Board to the Secretary. If the secretary sends the notice on the basis of order of board, he /she must mention ‘By order of Board’ or ‘On behalf of Board’ before signing the notice. If the Board makes any default in calling AGM, the central government may call it or Central government may direct the Board to conduct the meeting.

In such condition, The Central Government, at its own, may send the notice or any official of the company may send the notice obeying the order of government.

The members may also call the meeting, if the Board, does not call the meeting within 45 days after submitting the requisition of the Board.

In certain circumstances, the Government of India may call the meeting directly.

7. Period of Notice:

Notice of General Meeting must be sent at least before 21 days of meeting. In the period of 21 days, the day of receipt of notice and day of meeting are not included i.e. the company should send the notice before 23 days.

In the following cases, notice days may be less than 21 days –

(i) In case of AGM, if all the members entitled to present and to vote give their consent.

(ii) In case of other General Meeting, (a) If company has share capital at least 95% of members of paid up share capital who have voting rights. or (b) If company has not share capital, on the consent of the members who have 95% voting rights in total votes.

8. Contents of Notice Under Section 100 (2):

The notice should contain following information –

(i). Date, Time and Place,

(ii) Nature and Type,

(iii) Objective,

(iv) Agenda,

(v) Resolution to be passed, (if any)

(vi) Information of important contracts, (if any)

(vii) Right to appoint proxy with proxy form,

(ix) Section under which the meeting is being called.

9. Persons to whom notice must be given under section 101 (3):

(i) Every member, legal representative of deceased member or to liquidator of insolvent member,

(ii) Auditor (s),

(iii) Every Director,

In case of joint members, notice is sent to that person whose name is entered first in the register of members.

10. Method of Service (giving) of Notice:

Notice maybe sent on registered address or in person by post. When the company send notice of registered address through post by affixing stamp of proper value, it is considered as the notice has been delivered.

If the notice has been sent to the entitled person through registered post or UCP, on his request and he has paid the charge of post, it will be compulsory for the company to send the notice according to his request otherwise the notice could not be considered as delivered.

If companies sends notice through registered post, it is considered that the notice could have been delivered to the concerned person. If same member have no permanent address or registered address, they are informed through newspapers. In such a case, it is considered that the concerned person (s) has received the notice on the date at which the information of meeting has been published.

If, by any reason, the secretary forgets to send the notice or notice has been sent but not received, the meeting would not be invalid. U/s 104

11. Duties of Secretary regarding Notice:

(i) The draft of General Meeting is prepared as per instruction of Board of Directors and draft of Board meeting is prepared in consultation with chairman.

(ii) For all types of meetings, the notice must contain date, place, time and agenda.

(iii) Printing and Issue of Notice.

(iv) Attachment of essential document with notice e.g. Proxy form, Balance Sheet, Reports of Auditors and Directors and Auditor financial statement etc.

(v) Notice of GM to members, legal representative and liquidator to registered address. Notice of board of directors meeting to each director, who are in India and at the usual Indian address of directors who are not in India.

12. Statement to be Annexed with Notice Under Section (102):

(i) Description of Facts - It is mandatory to annex the statement of facts with the notice of meeting in request to special matters going to be transacted in any General Meeting.

(ii) Special Business - In case of any AGM, following matter other than under mentioned shall be treated as special business –

(a) Discussion on financial statement.

(b) Declaration of dividend.

(c) Appointment of new directors in place of retiring directors.

(d) Appointment of auditor (s) and deciding remunerations.

(iii) In case of Non-Disclosure or Insufficient Disclosure – Where, due to non-disclosure or insufficient disclosure of any statement by a promoter, director, manager or any other key managerial personnel, these happens any direct or indirect benefit to them or their relatives the company shall be liable to reimburse the amount of such benefit.

(iv) Penalty - In case of any default, every such promoter, director, manager or managerial personnel shall be liable for penalty of rupees 50,000 for self-benefits and in case of relatives, five times more.

Company Meetings: Meetings of Directors: Board of Directors Meeting, Meetings of Committees of Directors

Meetings of Directors: Board of Directors Meeting, Meetings of Committees of Directors,

Key Points:

1.Introduction of Meetings of Directors.
2. Types of Meetings of Directors.
     (a) Board of Directors Meeting
     (b) Meetings of Committees of Directors
3. Powers of Directors.
4. Statutory Provisions regarding Board Meetings.

 

Link : https://smckk14.blogspot.com/2023/07/company-meeting-extra-ordinary-general.html

1.Introduction of Meetings of Directors:

Shareholder are the real owners of a company but they do not actively participate in management and administration of the company. For this purpose, they elect directors as their representatives. These directors handle and control the systems of Management. Directors conduct meeting on time to time.

2. Types of Meetings of Directors:

Meeting of directors may be divided into two parts –

(I) Board of Directors Meeting.

(II) Meeting of Committees of Directors.

(I) Board of Director Meeting – Board meeting are very much essential in a company. All the important decisions regarding companies are taken in Board meetings. Even, the decisions, which need consent of shareholder under Companies Act, are taken in such meetings.

This is a fact that, in General Meeting, only formal consent of shareholders is taken but in real, the majority belongs to directors, their relatives and friends. So the status of General Meeting becomes like ‘Rubber Stamp’ of the directors and the almost all the matters, the decisions taken by the directors are accepted by General Meeting.

3. Powers of Directors:

Generally, the Directors have following Powers –

(i) To make call money on partly paid up shares.
(ii) Issue of debentures.
(iii) Borrowing powers.
(iv) Investment of money of the company.
(v) Giving loans.
(vi) Filling casual vacancy of any director.
(vii) Allotment of shares.
(viii) Forfeiture and re-issue of shares.
(ix) Recommendation of rate of dividend.
(x) Appointment of officers.
(xi) To manage and control the business.
(xii) All such works which the company have the power to do.

But a board of director cannot perform those works which are necessarily to be performed under the provisions of AOA and Companies Act.

4. Statutory Provisions regarding Board Meetings:

(i). According to Company Law and AOA - If the meeting is called illegally and acceptance for any contract is given in the meeting, the second party cannot be held liable. i.e. the second party can force the company to perform the contract. In such cases, Board of Director is held liable.

(ii) Frequency of Meeting – A Board meeting may be called as and when required. According to Section (173), every company has to conduct first meeting of directors within 30 days of registration and will hold at least four meeting in subsequent years. There should not be gap of more than 120 days within two meetings.

(iii) Right to Call the Meeting - Any director of the Board may call the meeting on demand of meeting by a director, the Managing Director, Management or Company Secretary may also call for Board of Director meeting.

(iv) Place of Meeting - At any reasonable place.

(v) Notice of Meeting - The notice of every meeting of Board of Director should be given to every director of the company, who is in India. The director (s) who is out of India, the notice should be sent to his usual address in India. If the person who is liable to give notice, makes any default, maybe punished with a penalty of up to ₹ 25000 under section (173).

(vi) Period of Notice - At least 7 days’ notice. In case of emergency, maybe of less days but in such case, one independent director, must be present in meeting.

(vii) Contents of Notice - In notice, date, place and time are to be mentioned. Meeting should be called on any working day during office hours unless and until all the directors are ready for any Contra situation. It is not compulsory to send agenda with notice until necessary according to provisions of Act AOA.

In following cases, agenda must be sent –

(a) Appointment of CEO Under Section (203).

(b) Investment in Shares and Debentures of other incorporated organisations under section (186).

(viii) Agenda of Meeting - Agenda means list of matters to be discussed and decided. Meeting is conducted according to Serial Number of agenda. Though it is not compulsory to send agenda with the notice, according to Companies Act, but in practice agenda is sent to directors with notice. Generally, routine matters are discussed first and important /disputed matters thereafter.

(ix) Quorum – Quorum means the specific numbers of directors which must be present in the meeting to make the meeting valid. According to Section 174 (1), Quorum for Board meeting shall be 1/3rd of total directors or two directors, whichever is more. While calculating 1/3rd of total directors, any part (fraction) is rounded off.

During calculation of total directors, vacancies are not computed. The directors who have interest in any matter, they are considered for Quorum for that matter.

If number of directors who have interest in the matter, is more than or equal to 2/3rd of total directors, the remaining directors (who have not any interest in the matter) shall be the considered the quorum for meeting, if their number is not less than two.

Quorum should be present during entire meeting. If at any specific time, the quorum is not present, the discussion made on the matter at that specific time, shall be void. Directors may decide the requisite number of quorum if authority of AOA and this number maybe changed from time to time but cannot be less than the quorum as prescribed in under section 174 (2).

If the meeting could not be held for want of quorum, then, unless the AOA otherwise provide, the meeting shall automatically get adjourned to the same day at the same time and place in next week or if that day is a national holiday, till next succeeding day, which is not a national holiday, at the same time and place.

If the meeting, due to any reason, discussion on agenda could not conclude in one day, the chairman, with consent of directors present may adjourn for next day. This adjournment must be informed to absent directors.

(x) Chairman - For every Board meeting, appointment of Chairman is compulsory. AOA of the company has provisions regarding Chairman. Following provision have been given in Rule 76, Table ‘F’ in this regard –

(a) Board of Director may elect Chairman for its meetings and can also determine the tenure.

(b) If Chairman is not elected or the elected Chairman does not present himself in the meeting within 5 minutes of prescribed time, the directors present may elect any person as Chairman among themselves to conduct the meeting.

So, the Chairman of Board of Director maybe appointed by AOA or maybe elected by the directors. Such appointed or elected Chairman presides over the meeting. If the director desire to remove the Chairman, they can do so by passing resolution and may appoint any other directors as Chairman.

(xi) Voting - Each director has the right to give one vote for every resolution presented in the meeting. But if any director has any interest in any resolution, he is barred to cast his vote on that resolution. If authorised by AOA, the Chairman has the authority to cast his vote if the resolution has similar number of votes in favouring and against. He, casts his vote, in the capacity of a director.

In Board of Director, voting is done by showing of hands and all the resolution are passed by simple majority as long as, according to the Act, a resolution needs unanimous decision.

In the following conditions, resolution are required to be passed unanimously –

(a) Approval of Prospectus.

(b) Appointing a person as a Manager or Managing Director who is already appointed as Manager and Managing Director in any other company.

(c) Intercompany investment etc.

(xii) Resolution by Circulation – Generally, the resolution which are to be passed by Board of Director are to be presented and passed in Board of Director meeting. But, if due to any reason, the Board of Director meeting is not possible, the resolution may be passed in following conditions –

(a) Proforma of resolution has been sent to director in the usual address in India, if he / she is out of India.

(b) Such proforma must be with required document.

(c) Number of directors, to whom the information has been sent, should not be less than the required number of quorum.

(d) Such resolution must be accepted either by the directors present in India or must be accepted by majority of the directors of all the directors (directors present in India and outside India) of the company.

(xiii) Attendance Register of Directors - Every company maintains an attendance register to keep the records of the directors present in the board meetings. The company secretary has the responsibility to obtain the signatures of directors in register.

(II) Meetings of Committees of Directors - If provided in AOA, the board of director may constitute the committees of directors for different objectives. e.g. Share allotment committee, Share transfer committee, finance committee etc. 

Company Meeting : Extra - Ordinary General Meeting & Class Meeting

Extra - Ordinary General Meeting & Class Meeting:

Key Points:

1. Meaning of Extra - Ordinary General Meeting.
2. Objectives / Functions of EGM.
3. Who can call EGM?
4. Meaning of Class Meeting.
5. Objectives of Class Meeting.

Link : https://smckk14.blogspot.com/2023/06/debentures-detailed-information.html

1. Meaning of Extra - Ordinary General Meeting:

All the General Meetings other than Annual General Meeting are called as “EGM”.

A company may call EGM at any time. EGM, are called to transact such businesses for whom, it is not possible for the company to wait for next AGM. e.g. Alteration in MOA and AOA, Issue of debentures, Change in share capital, removal of any director till completion of his tenure etc.

2. Objectives / Functions of EGM:

In case of need, EGM can be called many times in a year. All the businesses transacted in EGM are called Special Business. Generally, an EGM is called to perform following works –

(i) Alteration in MOA and AOA.
(ii) Change in share capital.
(iii) Issue of share at discount.
(iv) Issue of debentures.
(v) Transfer of registered office from one state to other state.
(vi) Increase in remuneration of directors.
(vii) Deliberation on amalgamation, absorption and liquidation of company.
(viii) Sanction of loans to directors.
(ix) Any other work in which consent of members is necessary.

3. Who can call EGM?

(1) By Board of Directors:

(i) By Passing Motion and

(ii) By Directors, on demand (requisition) of members.

(2) By the members demanding for.

(3) By Tribunal (companies 2nd amendment) Act, 2002

Court word replaced by Tribunal.

(1) By Board of Directors:

(i) By Passing on Motion - The Board of Directors, under provisions of AOA, are entitled to call EGM at any time by passing necessary resolution /motion. So, it is essential for directors to call EGM to pass resolution in this regard in its meeting.

(ii) By Directors on Requisition of Members - Members of the company have right to call EGM. Directors are bound to call EGM on requisition of members. EGM maybe called by following members –

(a) In case of company having share capital, who have 1/10 th holding of paid up capital, has power to vote on the date when they demand for it.

(b) In case of company having no share capital, who have 1/10 of total voting rights, on the date when they demand for EGM.

Such requisition made by members must be in writing with the objective. The requisition should be signed by members and should be submitted in registered office. Board of Directors should invite the process to call EGM within 21 days receiving requisition and the EGM should be convened within 45 days.

(2) By the Requisitionist Members - If the Board of Director does not convene meeting within 45 days, the requisitionist members may call the meeting themselves within 3 month. The meeting will be called in such a manner as it would have been called by Board of Directors. Reasonable expenses made by members to convene the meeting, shall be paid by the company and the company will recover this amount of expenses from the amount payable to defaulting directors.

In case of joint shareholders, all the shareholders need not to sign. Anyone or some of them may sign.

(3) By Tribunal –

If for any reason, it is impracticable to call a meeting of a company, other than AGM, in any manner in which meetings maybe called, or to hold or conduct the meeting in the manner prescribed by this Act or AOA, the Tribunal may, either suo moto or an application of any director or member of the company who would be entitled to vote at the meeting in the manner it thinks fit.

If the Board of Directors, under instructions of NCLT, may issue the directive that in such meeting. Only one member or his /her proxy may present, the meeting should be considered legal.

The EGM called by NCLT, shall be considered valid for all the objectives of the company.

Class Meeting:

4. Meaning of Class Meeting:

"Class Meetings" are one of the types of General Meeting. “Class Meeting” is meant by the meeting of shareholders of a certain class. Such meeting are conducted by the company for certain class of shareholders.

5. Objectives of Class Meeting:

Generally, these meetings are called for following objectives –

(i) Alteration in rights of shareholders.

(ii) Discussion on any planning or agreement between company and members.

In such meeting, only those members may present, for which class, the meeting has been called.

The fact to be noted that if company wants to change the rights of the shareholders of any specific class, ¾ th majority should approve supported by special resolution.

But, if at least 10% of shareholders, who opposed the change, may file a suit in the court to cancel such change. The application in the court must be filed within 21 days. Court may pass an order in favour of, or may cancel the change.