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Meeting & kinds of Meetings under Companies Act, 2013

Meeting and Kinds of Meetings under Companies Act 2013

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Meeting is an association or coming together of an assorted number of individuals for debating on company issues corporations or companies are observed as legal entities discrete from people associated with it before the law. All the occurrences of the corporations are pragmatically implemented by the management within the constraints of their strength, as induced by the articles of association of the corporations. The directors also practice forces of their own with the approval of other individuals associated with the corporation.

The approval of the other individuals is reserved at the general meeting conducted by the corporation. Any errors carried out by the management are amended by the shareholders at the gatherings of the business.

  • The shareholders’ meetings are held for the shareholders to render their final decisions and stating their notions and procedures adopted by the board.
  • Gatherings/Meetings are an essential segment of the board of a corporation as stated in the Companies Act, 1956.
  • Meetings extend the ambit of the shareholders to get aware of the underway steps of the corporation and permits the shareholders to conclude on problems.
  • There are many kinds of meetings conducted by a corporation.
  • Range of steps must be accomplished for the requested presence, convoking and conclusion of the meetings.

This article throws light on the major kinds of Corporate Meetings under Companies Act, 2013.

Statutory Meeting

Statutory Meeting is the prime gathering meeting of the shareholders of a public corporation. It must be conducted within a time frame, not below one month nor after 6 months from the day on which the corporation is qualified to initiate work. Statutory Meeting is conducted only once in the lifespan of a corporate firm. A private enterprise and a firm restricted by guarantee and not possessing a share capital need not conduct such a meeting.

The aim of the statutory meeting with its statutory record is to place the partners of the corporation in ownership of all the crucial details linking to the brand-new firm, what portions have been assumed, what funds are gained etc. This also renders a chance to the stakeholders of the meeting to deliberate about the whole case, the board, and future course of the corporate firm. The committee of directors must, at least 21 days prior to the date on which the gathering is to be conducted, advancing an exposition, known as the ‘statutory report’ to every individual associated with the company. This exposition comprises all the required details linked to the fundamental framework of the firm for the details of the stakeholders.

What is the Annual General Meeting(AGM)

An Annual General Meeting (AGM) is a meeting conducted every year between the board of directors and shareholders of a corporate firm. Broadly, this is the sole period in which the shareholders and the directors will address throughout the year, so it is an opportunity for the directors to introduce the firm’s yearly records. AGMs are not solely conducted by firms. Unions, charities, universities, and schools could all need to conduct an AGM to deliberate about the prospects of the enterprise or organization in doubt.

Throughout an AGM, a firm’s functioning is assessed, and its forthcoming tactics are examined. This is a chance for shareholders to put forth doubts in front of the board, and in return receive solutions and answers for inadequate presentation and oppose the management of the firm. Similarly, an AGM is a period to appreciate respectable outcomes. Voting can also be conducted during an AGM, permitting stakeholders to voice on corporate resolutions, and permeate any unoccupied posts on the committee of directors. Stakeholders who select not to be present in the gathering, generally vote by proxy, which can be carried out by rendering allowance by another stakeholder to vote in their name.

Mostly, the sole time stakeholders and directors gather is during a firm’s Annual General Meeting, which normally happens at a predetermined day and period.

Extraordinary General Meeting(EGM)

Though, at times it may need stakeholders to assemble in a short period of time to handle a critical issue, alarming to the firm administration. The Extraordinary General Meeting is a way to gather and discuss important issues addressed in the Annual shareholders’ meetings.

An EGM may be called into action to handle an issue of the dismissal of a director, legal issue, or any issue that cannot be delayed until the following shareholders gathering.

The dissimilarity between an AGM and an EGM is that former can only be conducted during the line of work hours and not on a government holiday, while an EGM can be implemented out on any date inclusive of holidays. Also, while a corporation’s board can solely be called in action for an Annual General Meeting, an Extraordinary General Meeting can also be conducted by the management.

Meeting of Board

Section 173 of The Companies Act, 2013 states about Meetings of Board. Every corporation shall conduct the first gathering of the Board of Directors within one month of the day of its establishment. Meeting of the directors/executives is a conventional gathering of a company’s board associated members. This gathering is normally conducted on standard periods to examine primary issues and strategic challenges within the company. People that constitute a firm’s board of executives are usually in presence. The gathering is controlled by the board’s chairman or if the chairman is not present a recruit. The gathering’s discussions are registered in proceedings and all propositions to proceed must achieve the attendance preconditions. Under the precept of shared accountability, each executive — even if not present in the gathering — must compulsorily follow the propositions transpired throughout the gathering. In many instances, a board of executives is a kind of gathering known to decide the strategies of the firm and resolve prime judgements about subsequent activities. The minutes of the gathering must be in agreement with the firm’s articles and any regulations set out by the management itself.

The capital stock of corporations can and often is, quartered into more than one class of shares. The presence of more than one class of stocks might be able to express that the approval of a category or categories of stakeholders is needed to create a certain resolution, making it mandatory on the corporation. The need for category’s approval is normally in a supplement to the need for the approval of the stakeholders, in addition to any other steps or approval needed that implements in the cases. The sections of corporate or other dealings will stipulate the particulars of how the gathering is to be held and the approval needed at that gathering. There are conditions concerning quorum and voting that implements to gathering and these are stipulated in section 334 of the Companies Act 2006. It is feasible to utilize the legalized written approval in relative to class consent.

Meeting of Creditors

Meeting of creditors is an expression utilized to indicate a gathering stipulated by the corporation to devise a plan for agreement with its creditors. The Companies Act, 2013 not only renders strength to the corporate to bargain with the creditors but also lays down the process of doing so. Creditors meetings are also organized in the situation of creditor’s deliberate winding up.

In a situation of discretionary winding up of a corporation, the corporation must call for action, a gathering of creditors on the date on which there has to be the general meeting held by the corporation at which the proposition for closing is to be initiated.  The notification for a gathering of creditors is to be rendered by post to the creditors simultaneously with the dispatching of the notices linked to the general meeting of the corporation for closing. Further, to dispatch the notification for gathering of creditors by post, the corporation must be publicized once at the minimum in the Official Gazette and at least in two newspapers flowing in the region where the registered workplace or main location of work of the corporation is located.

 Meeting of Debenture Holders

These gatherings are known in accordance with the directives and rules of the Debenture bond. Such gatherings are conducted occasionally where the dividends of debenture holders are included in restructuring the time of re-arrangement, restoration, fusion or closing of the corporation. The regulations linking the no­tification of the gathering, selection of Chairman, quorum etc. are all present in the Trust Deed.

Meeting of Creditors and Contributories

These gatherings are conducted when the corporation has gone into withdrawal to discover the aggregate amount payable by the corporation to its creditors. The main aim of these gatherings is to acquire the consent of the contributories and creditors to the strategy of agreement or displacement to rescue the firm from economic challenges. The Court may also direct for such a gathering to be conducted. When a corporation wants to differ the entitlements of debenture-holders, such gatherings are to be conducted in line with the regulations consigned in the Debenture Trust Deed. They are also conducted to authorize the corporation to publish new bonds or to differ the charge of interest payable to debenture-holders. The expression “contributory” includes every individual who is responsible to put up with the holdings of the corporations when the firm is being closed.

Know about Auditors and their Roles & Responsibilities under Companies Act

Conclusion

Gatherings or meetings is an association or coming together of an assorted number of individuals for debating on company issues. Decision-making process needs a number of votes. The executives and people associated assess and resolve any issues. In accordance with the Companies Act, gatherings are crucial provisions. The Act has many sections for gathering.  It aids in evolving finer resolutions which is something not any one person can do. It renders the free exchange of designs, thereby bracing and simplifying the reasoning. Group deliberations encourage more effective cooperation of successive action strategies. The important standard is that gatherings aid in constructing quality functioning correlation.

Endnotes

  • Prasad, Suresh. “Complete list of Sections of Companies Act, 2013”. AUBSP. 
  • HK Saharay, Company Law (5th edn 2008)
  • Singh Avtar, Company Law, (Lucknow: Eastern Book Company) 2007
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Nitisha Bhardwaj

Student, Chanakya National Law University Patna

Nitisha Bhardwaj is a writer, speaker, and researcher. She has an affinity for International Aviation and Corporate Law. She is a creative thinker and seeks for balance. For any Clarifications, feedback, and suggestion, you can reach her at Nitishabhardwaj1@gmail.com

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