This article is written by Adhoksha Sarode of 7th Semester of Adv. Balasaheb Apte college of Law Affiliated with Mumbai University
ABSTRACT
In general terms a meeting is defined as “ a gathering, assembling or coming togther of two or more persons for the objective of discussing lawful business. But to put it in words it means , it is a gathering whose participants are the members of a company, a meetting is a formal setting. It is important for the quorum of the members to come together to discuss all the lawful common business interest.
Keywords- gathering, assembling, lawful common business interest , company, members.
INTRODUCTION
In the companies act , 1956 there don’t seem to be a mention about the term ‘meeting’. It is important to pertain that in a few exceptional cases one member meetings are also declared to be valid. Eg. Where there is only a single shareholder in a company,he can alone carry out the meeting on sole terms. It also applies for those situation which consists of single creditor or board ot director for the company.
In one case, the meeting was defined as “an assembly of people for a lawful purpose” or “the coming together of atleast two persons for any lawful purposes.”[1]
In another case, the petitioner through extraordinary general meeting passed special resolution for conversion of its status of ‘publiclimited company’ into ‘private limited company’.Unanimous approval of shareholders and board of directors passed the super resolution.. No members or creditor of the company proposed conevrsion after the e-form was passed.The court stated that as everything was fulfilled the conversion of status of company was to be granted. [2]
KINDS OF COMPANY-
The companies act. 2013 provides for many companies, below is the classification of the two-
i) One person company.
ii) Small company.
b) Public companies.
The companies may be incorporated as limited liabiltiy companies or unlimited liability companies.
Limited liability companies may be :-
i) Companies limited by shares,
ii) Companies limited by guarantee,
iii) Companies limited by guarantee and shares.
Companies can also be classified as:-
i) Statutory companies,
ii) Registered companies,
iii) existing companies,
iv) associations not for profit,
v) Government companies,
vi) Foreign companies,
vii) Holding and subsidiary companies.
PRIVATE COMPANY –
A private company means a company having a minimum paid-up share capital as per stated under Section 68(2) by its articles :
a) restrains the right to transfer the shares,
b) aprt from one person company which limits the number of its members to only 200 which does not includes:-
i) person who are enrolled in the employment of the cmpany, and
ii) persons who, having been formely in the employment of the company were members of the company while in that employment and have continued to be members after the employment ceased, and
c) restrains the invitations to the public to subscribe for any securities of the company,
When two or more persons hold one or more share in a company then they would eb considered as one single member. Wheras, the private company state in its articles,the restrictions, prohibitions.
ONE PERSON COMPANY –
The companies act, 2013 allowed the formation of a limited liability company by just sole one person. Such a company is described under section 3(1)© as a private company. The legal, financial liability would be limited to only one person in this kind of company. In india , the J.J.Irani expert committee recommended the formation of one-person company.
The provisions relating to the opc are that section (62)2 of the companies act, 2013 means that a company with only one person as its members. Section 3(1) ( c ) states that a company may be formed for any purpose by just one person, where the company should state that the private company should subscribe his name to the memorandum and comply with it.
An OPC can be registered as ‘limited by shares’ or ‘limited by gaurantee’ , OPC shall indicate the name of the other person along with his consent, Who shall become the next person if the owner of the opc company dies, the consent of suuch person shall be filed with the registrar at the timee of the incorporation of the opc along with the momorandum and articles.
SMALL COMPANY –
The concept of the same was introduced for the first time in the act. According to section (85)2 of the companies act, 2013, as amended by the amendment act, 2017, small company means a company, other than a public company-
The small company shall not comprise of-
i) holding of a company or a subsidiary companies, ,
ii) non-profit association (ie. Registration of Companies under section 8 of the companies act, 2013)
iii) A company or a body corporate under any special act.
Section (71)2 of the companies act, 2013 as amended by the companies (amendment)act, 2017 defines a public company to mean a company which :-
a) is not a private company,
b) a minimum paid share capital , as stated
A company would be deemed to be a public company for the reasons as per stated in the act where such subidiary company company is a private company of the articles.
CONVERSION OF A PUBLIC INTO PRIVATE COMPANY-
No express provisions exists in the companies act except the reference in the proviso to sec. 3(1) and (2A) for converting a public company into a private company conversion of a public company into a private company will repair :
STATUORY COMPANY –
Eacg statoury compamy is giverned by a special act, however the provisions of the comoanies act, 2013 applies to them, in so far as the same are not inconsistent with special acts under which the companies are in being Section (4)1.
REGISTERED COMPANY-
Any company undergone the registration under the companies act is known as a registered company. Registered companies can be incorrporated as a limited liability companies or a unlimited liabiity compajnies. Further, they may be incorporated as a public companies or a private companies.
GOVERNMENT COMPANIES –
Section 617 defines a government company to mean any company in which not less than 51% of the paid-up share capital is held by –
FOREIGN COMPANIES –
Sec. 591 states that , a foreign company means a company incorporated outside india but having a place of businiess in india will not be a foreign commpany. A company shall be said to have a place of business in india if it as a specfied or identifiable place at which it carries on business such as an office,etc. [3] As per section 602( C ) , having a share transfer office or share registration office will constitute a place of business. [4]
Unregistered companies –
Section 582 says that any partnership, associations, groups, or companies consisting of more than 7 members.The expression shall, however not include:
Producer companies –
Sec. 581A to 581ZT states that the government formed a group which constituted of a committee of experts led by Dr. Y.K.Alagh, economist and former union minister to examine and make recommendations with regard to :
LIMITED LIABILITY COMPANIES-
COMPANIES LIMITED BY SHARES –
A company having the liability of its members limited by the memorandum to the amount, if any unpaid on the shares respectively held by them is termed ‘a company limited by shares’ Section 4(1)(d)(i). Such a company s commonly is called ‘limited liability company’although the liability of the company limited by shares’. The liability of the members is limited. The liability of members can be enforced at any time during the existnec and also during the winding up of the company. Such a company must have share capital as the extent of liability is determined by the face value of shares. However, except where the articles otherwise provide, there is no liabilty to pay any balance amount due on the shares, except in pursuance of calls made.
COMPANIES LIMITED BY GUARANTEE-
A company limited by guarantee may be defined as a company having liability of the mebrs limmited by the meorandum to such amount as the mebers may respectively undertake to contribute:
a) to the asset of the company in the event of its being wound-up while he is a member of within one year after he ceases to be a member, payment and debts , liabilities of company which were contracted even before the employer was a member,case may be, and
b) to the costs and expenses of winding-up and for adjustment of the rights of the cotributories among themselves.Section 4(1)d(ii).
COMPANIES LIMITED BY GUARANTEE HAVING SHARE CAPITAL-
The liability of a member of a guarantee company having share capital is not merely limited to the amount as stated above in respectof guarantee companies not having share capital, he would be called if he hadnt paid any sums of the shares which were held by him. (S. 285)
The company meetings can be divided into three :
1) Meetings of Shareholders’
i) stautory meetings,
ii) annual general meeting(AGM)
iii) extraordinary general meeting.
2) Meetings of directors’
i) Board of meetings,
ii) committee meetings.
3) SPECIAL MEETINGS-
i) class meetings,
ii) creditors meetings,
iii) debenture holders meetings.
SHAREHOLDERS MEETINGS-
1) STATUORY MEETINGS-
The statory meetings are the first general meetings of any public company after they are entitled. Section 165(3) of the companies act, 1956 defines statutory meetings which are conducted between 1 to 6 months. They are limited by share or guarantee with a share capital. The members can cast their votes and discuss the matters, the statuory reports are supposed to be registered with the respected registrat office after the copies are sent to the members. However, these needs are not imposed on private or public companies which are not under any limitations by shares or guarantees.
2. ANNUAL GENERAL MEETING-
Annual general meetings are held once a year by companies even though they havea share capital or not. Section 166(4) of the companies act, 1956 states that this meeting should take place in any company regardless it being private or public. NO more than 15 months should be present. When the first annual general meeting is being held then the fifteen-month gap can be prolonged to eighteen-monh gap. The period can also be relaxed to another 3 months if the registrat permits so. In one case, section 159(6) stated that the need of the companies with the required share capital should be present which is required to submit ,it their annual returns within 60 days to the registrar office. [5]
3. EXTRAORDINARY GENERAL MEETING-
Section 169(8) of the act, states the rules for extraordinary meeting. Meetings which are held between two annual general meetings are called as extraordinary general meetings.. The purpose of calling this meeting is to discuss the urgent matters. The companies which consist of share capital members which holds a one-tenth paid share capital can send a requistion to the board of directors. And those companies which doesn’t consist of share capital then the one-tenth mebers can have the right to vote for the same.The signature of the requistioners is to be sent to the registrat officer after every meeting. The requistion makers can call for meetings is the same is not being done within 21 days of requistion submission.
DIRECTORS MEETINGS-
1. BOARD MEETINGS-
Section 285(9) of the act states that every company is bound to have a board of directors’ meeting every 3 months annually, ie. 4 board meetings within 3 month gap. The notice of the meeting is to be given in writing and at their residence. The object of this meeting is to make sure that the director are aware about the given work and their obligations. The requirements of four meetings can be relaxed by the central governement. The act under section 287(11) requires formation of a quorum of minimum 2 directors or one-third of total strength whichever would be higher.
2. COMMITTEE MEETINGS-
Committee meetings are just a replica of the board meetings. In this the committee members come together to for a meeting.The board gives the power to the committee. This committee is formed on the lines of the company and they follow the same procedure as that of the board of the meetings.
1. CLASS MEETINGS –
When a shareholder of a particular class arranges for a meeting it is called as class meeting. When a company gives bonus only to equity holder of the company, the meeting will then be called as quity holders.
2. CREDITORS MEETINGS-
The creditors meetings are called by the director when they propsoe to set a scheme for arrangment and negotiate with the creditors. Section 391(12) of the act, empowers the company or liquidator when the winding up takes place to ask the tribunal to call for a meeting of creditors. In meetings like this if any prposal is passed with a three-fourth majority of the creditor value,the same would be bound on all. The tribunal can ask for modifictaions of virtue by scetion392(13). The said feature of such kinds of meetings is directed by the National company law tribunal(NCLT).
3. DEBENTURE HOLDERS’MEETINGS-
The debenture trust deed lays down the procedure an dprinciples concerning the debenture holders’ meeting.The said meetings are held when there is a concern regrading the rights and interest, they are arranged by the debenture holders of a class.
PROCEDURE FOR ANY COMPANY MEETING –
The proceudre laid down in the companies act should be followed/ Section 170 of the companies act 1956 states that the forthcoming sections i.e.Sections 171-186 will be applied to every geeneral meeting of any kind of company. Section 170 of the act states that the sections which will be followed as of now will be applied to any and every general meeting of any public or private company. The steps are as follows-
1) NOTICE-
Notice is the sole thing which is important for a beginning step for any meeting. Section 171 states that a notice is to be submitted to the joining members of a meeting 21 days prior to a meeting. Section 172 says that it has talked about all the needed things during the agenda of the meeting. The notice would be in writing and would be sent to all the members of the company at their residences.If any member dies, then it would be informed to the committee member.Section 173 requires notice to be stated with an explanatory note concerning the ‘special’ business. If the member is ‘accidently’ omitted this serving of notice, the meeting shall not validated ipso facto.
2. QUORUM AND CHAIRMAN-
Section 174 of the act says that the quorum consist of 5 persons in case of public company and two when it is other company. If there is no quorum constituted within half an hour of the commencement of the meeting then it will dissolve the arranged meeting. Section 175 of the act states that the requirement of a chairman for the meeting, the members present shall elect a chairman for the meetings. The election shallbe a simple show of hands, when a member is elected he acts like a chairman for the whole meeting.
3. PROXIES-
Every member is empowered to appoint any other person as his proxy for the meeting as per section 176. But those are only limited to voting on polls, neither can he speak regrading anything in the meeting, such empowerement is prohibited as well. Also members of the private company are gifted to use that power for just one proxy per meetig. The member appointing any proxy has to provide a duly sugned within proxy authorizing the proxy to vote in his place and be deposited to the company before 48 business hours of such meeting.
The voting option can be asked by any member or proxy present in person for any particular motion, which the same section 179 lays down in the companies with no share capital, one member or a proxy I presence of less than total 7 members and 2 members or a proxy in presence of more than total 7 members and 2 members or a proxy in presence of more than total 7 members can ask for the voting initiation. The polling option should be preset as per made under section 179. The chairman is supposed to carry out its resolution, everything related of that matter should be notes in a minutes book of the company as per section 178. Section 180 says that the polling shall be conducted instantaneously once asked for, while in other cases such polling shall be conducted within 48 hours of such demand. Section 181 and 182 on the other hand restricts the members for polling decisions.
5. RESULT OF THE VOTING-
Section 185 of the act lays that firstly, it is the chairman who decided the manner of polling. The result of the polling is declared and it shall be deemed to have been the result being stated in the proposed meeting. As empowered by section 186 and stated by in the cases like ‘ R. Rangachari vs. Suppaiah and ors. In certain situations like these the board of the meetings other than anuual general meetings, the tribunal has the power to call for such meetings either at its own, or on the requistion of aa director or even a single eligible member to ask for a requistion. The status similar to those would had been stated in such meetings.
CONCLUSION –
Every and any meeting has to bid by the obligations which is stated in the companies act. There are 8 companies which does not meet in the end with a meeting room with a polling rule also, all the minutes are laid down in the book of the meetings of the company which is signed by the chairman who is present in the meeting. The conditions leived in the act helps a company to oblige by it which ultimately relates it to be formed and deal with in an orderly manner.
REFERENCES-
1) Lexpeeps.in Company meetings: Procedure and types, https://lexpeeps.in/company-meetings-procedure-and-types/ last seen on 23/08/2023.
2) Brainkart.com Kinds of company meetings , https://www.brainkart.com/article/Kinds-of-Company-Meetings_40943/ last see on 22/08/2023.
3) Studocu Procedure for company meetings https://www.studocu.com/row/document/kampala-international-university/business-associations/procedure-for-company-meetings/28127560 last seen on 21/08/2023.
4) Dr. G.K. Kapoor, Dr. Sanjay Dhamija Taxmann’s Company law, 6-49, (22nd edition, 2019).
5) A.K.Majumdar, Dr. G.K. Kapoor Taxmann’s Company law , 7-63, (14th edition, 2011).
[1] Sharp vs. Dawes (1971).
[2] Manorama Industrial and technical services Ltd(2018).
[3] Deverall v. Grand advertisement Inc.(1954) 3 All ER 389.
[4] Employer’s liability assurance corporation v. Sedgwick collins and co. (1927) AC 95.
[5] Anita Malhotra vs. Apparel export promotion council and ors.
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