Meetings play a pivotal role in the governance structure of companies, serving as forums for decision-making, deliberation, and communication among stakeholders. In company law, various types of meetings are prescribed, each serving distinct purposes and governed by specific regulations. This article explores the different types of meetings in company law, along with relevant laws and sections.
1. Annual General Meeting (AGM):
An Annual General Meeting (AGM) is a mandatory meeting that every company incorporated under the Companies Act, 2013, or its predecessor, must hold each year. The primary purpose of an AGM is to enable shareholders to discuss the company’s affairs, review financial statements, and elect directors. Key aspects of AGMs include:
Relevant Law: Section 96 of the Companies Act, 2013, mandates the holding of an AGM within six months from the end of the financial year. The Registrar of Companies (ROC) may grant an extension for holding the AGM, not exceeding three months.
Procedures: AGMs require a notice period of at least 21 days to convene, except for certain specified cases where shorter notice is permitted. The agenda of the AGM typically includes adoption of financial statements, declaration of dividends, appointment/reappointment of directors, and appointment of auditors.
2. Extraordinary General Meeting (EGM):
An Extraordinary General Meeting (EGM) is convened for addressing urgent matters that cannot wait until the next AGM. Unlike AGMs, EGMs are held as and when necessary, based on specific resolutions proposed by the management or requisitioned by shareholders.
Relevant Law: Section 100 of the Companies Act, 2013, governs the convening of EGMs. It specifies that an EGM may be called by the board of directors on its own initiative or upon requisition by shareholders holding at least one-tenth of the paid-up capital.
Procedures: Similar to AGMs, EGMs require a notice period, usually shorter than that of AGMs, unless a shorter notice is consented to by the requisite majority of shareholders. The agenda of an EGM is determined by the specific matters to be addressed, as outlined in the notice.
3. Board Meetings:
Board Meetings are gatherings of a company’s board of directors, where strategic decisions are made concerning the company’s management, operations, and policies. These meetings are crucial for the effective governance and oversight of the company.
Relevant Law: Section 173 of the Companies Act, 2013, lays down provisions regarding the convening, frequency, and conduct of board meetings. Every company must hold a minimum number of board meetings each year, with a maximum interval between two meetings.
Procedures: Board meetings require adequate notice to be provided to all directors, along with an agenda outlining the matters to be discussed. The quorum for board meetings is as per the company’s articles of association, but it must not be less than one-third of the total strength of directors or two directors, whichever is higher.
4. Statutory Meeting:
A Statutory Meeting is a unique type of meeting mandated only for public companies. It is convened only once during the company’s lifetime, shortly after its incorporation. The purpose of the statutory meeting is to provide shareholders with information about the company’s formation, capital structure, and objectives.
Relevant Law: Section 165 of the Companies Act, 2013, governs the convening of statutory meetings. However, this provision is not applicable to companies incorporated under the Act.
Procedures: The statutory meeting must be held within a prescribed period from the date of incorporation, typically not less than one month and not more than six months. The directors are required to present a report to shareholders, known as the statutory report, containing specific information about the company’s affairs.
5. Class Meetings:
Class Meetings are convened for specific classes of shareholders, such as preference shareholders or debenture holders, to discuss matters that exclusively affect their interests. These meetings ensure that the rights and preferences of different classes of shareholders are duly considered.
Relevant Law: Sections 106, 107, and 110 of the Companies Act, 2013, govern the convening of class meetings and the passing of resolutions affecting the rights of class shareholders. Companies are required to adhere to the prescribed procedures for convening and conducting class meetings.
Procedures: Class meetings require the same procedural formalities as AGMs or EGMs, including notice periods, quorum requirements, and voting procedures. However, the agenda and resolutions discussed in class meetings pertain specifically to the rights and interests of the respective class of shareholders.
Conclusion:
In conclusion, company law recognizes various types of meetings, each serving distinct purposes within the corporate governance framework. AGMs and EGMs facilitate shareholder participation and decision-making, while board meetings enable effective oversight and management by directors. Statutory meetings are unique to public companies and serve informational purposes post-incorporation.
Additionally, class meetings ensure that the rights of different classes of shareholders are duly considered. Understanding the nuances of these meetings and complying with the relevant legal provisions is essential for ensuring transparency, accountability, and effective corporate governance within companies.
Adv. Khanak Sharma