COMPANY MEETING

A company is an association of several persons. Decisions are made according to the view of the majority.
Various matters have to be discussed and decided upon. These discussions take place at the various
meetings which take place between members and between the directors. Needless to say, the importance of
meetings cannot be under-emphasized in case of companies. The Companies Act, 1956 contains several
provisions regarding meetings. These provisions have to be understood and followed.

For a meeting, there must be at least 2 persons attending the meeting. One member cannot constitute a
company meeting even if he holds proxies for other members.

7.1 Meaning
The management of a company's business is necessarily left to the discretion of the directors.
However the ultimate control of the actions of the Board of directors is vested in the members or
shareholders of the company, and from time to time they must meet to ratify, or express their
disapproval of, the directors’ past conduct, and to consider their future plans. The members
express their will at general meetings by passing resolutions.

Shortly after the formation of a public company, a statutory meeting is held. This is the first
general meeting of the company. Then each year an annual general meeting is summoned to
consider the routine matters relating to the report of the directors, appointment of directors and
auditors, accounts and declaration of a dividend. In addition, occasions may arise when it is
necessary to consult the members on some urgent and unusual matter which justifies the
summoning of an extraordinary meeting.

Further, there are class meetings of shareholders of different classes of shares, and of creditors and
debenture-holders. Directors of the company also take decisions in Board meetings.

7.2 Kinds of Company Meetings: Broadly, meetings in a company are of the following types :-

7.2.1 Meetings of Members:

These are meetings where the members / shareholders of the company meet and discuss
various matters. Member’s meetings are of the following types:-

 Statutory General meeting

A public company limited by shares or a guarantee company having share capital is
required to hold a statutory meeting. Such a statutory meeting is held only once in
the lifetime of the company. Such a meeting must be held within a period of not less
than one month or within a period not more than six months from the date on which
it is entitled to commence business i.e. it obtains certificate of commencement of
business. In a statutory meeting, the following matters only can be discussed:-
a. Floatation of shares / debentures by the company
b. Modification to contracts mentioned in the prospectus

The purpose of the meeting is to enable members to know all important matters
pertaining to the formation of the company and its initial life history. The matters
discussed include which shares have been taken up, what money has been received,
what contracts have been entered into, what sums have been spent on preliminary
expenses, etc. The members of the company present at the meeting may discuss any
other matter relating to the formation of the Company or arising out of the statutory
report also, even if no prior notice has been given for such other discussions but no
resolution can be passed of which notice have not been given in accordance with the
provisions of the Act.

A notice of at least 21 days before the meeting must be given to members unless
consent is accorded to a shorter notice by members, holding not less than 95% of
voting rights in the company.

A statutory meeting may be adjourned from time to time by the members present at
the meeting.

The Board of Directors must prepare and send to every member a report called the
"Statutory Report" at least 21 days before the day on which the meeting is to be held.
But if all the members entitled to attend and vote at the meeting agree, the report
could be forwarded later also. The report should be certified as correct by at least
two directors, one of whom must be the managing director, where there is one, and
must also be certified as correct by the auditors of the company with respect to the
shares allotted by the company, the cash received in respect of such shares and the
receipts and payments of the company. A certified copy of the report must be sent to
the Registrar for registration immediately after copies have been sent to the members
of the company.

A list of members showing their names, addresses and occupations together with the
number shares held by each member must be kept in readiness and produced at the
commencement of the meeting and kept open for inspection during the meeting.

If default is made in complying with the above provisions, every director or other
officer of the company who is in default shall be punishable with fine upto Rs. 500.
The Registrar or a contributory may file a petition for the winding up of the company
if default is made in delivering the statutory report to the Registrar or in holding the
statutory meeting on or after 14 days after the last date on which the statutory
meeting ought to have been held.

Contents of Statutory Report must provide the following particulars:-

(a) The total number of shares allotted, distinguishing those fully or partly paid-up,
otherwise than in cash, the extent to which partly paid shares are paid-up, and
in both cases the consideration for which they were allotted.

(b) The total amount of cash received by the company in respect of all shares
allotted, distinguishing as aforesaid.

(c) An abstract of the receipts and payments upto a date within 7 days of the date
of the report and the balance of cash and bank accounts in hand, and an account
of preliminary expenses.

(d) Any commission or discount paid or to be paid on the issue or sale of shares or
debentures must be separately shown in the aforesaid abstract.

(e) The names, addresses and occupations of directors, auditors, manager and
secretary, if any, of the company and the changes which have taken place in the
names, addresses and occupations of the above since the date of incorporation.

(f) Particulars of any contracts to be submitted to the meeting for approval and
modifications done or proposed.
(g) If the company has entered into any underwriting contracts, the extent, if any,
to which they have not been carried out and the reasons for the failure.

(h) The arrears, if any, due on calls from every director and from the manager.

(i) The particulars of any commission or brokerage paid or to be paid, in

connection with the issue or sale of shares or debentures to any director or to
the manager.

(j) The auditors have to certify that all information regarding calls and allotment
of shares are correct.

Procedure at the meeting

At the commencement of the statutory meeting, the Board shall produce a list
showing the names, addresses and occupations of the members of the company and
number of shares held by them respectively. The list shall remain open and
accessible to anv member of the company during the continuance of the meeting.

Discussion of matters relating to formational aspect. The members present at the

meeting shall be at liberty to discuss any matter relating to the formation of the
company. They may also discuss any matter arising out of the statutory report.
Previous notice for such discussion is not necessary. However, no resolution may be
passed of which notice has not been given in accordance with the provisions of the
Act.

Adjournment. The meeting may adjourn from time to time. At any adjourned
meeting, any resolution (of which notice has been given), whether before or after the
former meeting, may be passed. An adjourned meeting shall have the same powers
as the original meeting. The object of the adjournment may be to provide members
with additional information as to the company's affairs.

Consequences of default
If default is made in complying with the provisions of Sec. 165, every director or any
other officer of the company who is in default shall be punishable with fine which
may extend to Rs. 500. If default is made in delivering the statutory report to the
Registrar or in holding the statutory meeting, the company may be wound up by the
Court. The Court ordinarily does not take such a serious view of the default. It may,
however, direct the company to deliver the statutory report or hold the statutory
meeting, as the case may be.

Object of the meeting and report

The object of the statutory meeting and forwarding of statutory report to members is
—
• To put the members of the company in possession of all the important facts
relating to the company, what shares have been taken up, what money
received, what contracts entered into, and what sums spent on preliminary
expenses, etc.
• To provide the members an opportunity of meeting and discussing the
management, methods and prospects of the company.
• To approve the modification of the terms of any contract named in the
prospectus.

 Annual General Meeting

Must be held by every type of company, public or private, limited by shares or by
guarantee, with or without share capital or unlimited company, once a year. Every
company must in each year hold an annual general meeting. Not more than 15
months must elapse between two annual general meetings. However, a company may
hold its first annual general meeting within 18 months from the date of its
incorporation. In such a case, it need not hold any annual general meeting in the year
of its incorporation as well as in the following year only.

In the case there is any difficulty in holding any annual general meeting (except the
first annual meeting), the Registrar may, for any special reasons shown, grant an
extension of time for holding the meeting by a period not exceeding 3 months
provided the application for the purpose is made before the due date of the annual
general meeting. However, generally delay in the completion of the audit of the
annual accounts of the company is not treated as "special reason" for granting
extension of time for holding its annual general meeting. Generally, in such
circumstances, an AGM is convened and held at the proper time . all matters other
than the accounts are discussed. All other resolutions are passed and the meeting is
adjourned to a later date for discussing the final accounts of the company. However,
the adjourned meeting must be held before the last day of holding the AGM.

A notice of at least 21 days before the meeting must be given to members unless
consent is accorded to a shorter notice by members, holding not less than 95% of
voting rights in the company. The notice must state that the meeting is an annual
general meeting. The time, date and place of the meeting must be mentioned in the
notice. The notice of the meeting must be accompanied by a copy of the annual
accounts of the company, director’s report on the position of the company for the
year and auditor’s report on the accounts. Companies having share capital should
also state in the notice that a member is entitled to attend and vote at the meeting and
is also entitled to appoint proxies in his absence. A proxy need not be a member of
that company. A proxy form should be enclosed with the notice. The proxy forms are
required to be submitted to the company at least 48 hours before the meeting.

The AGM must be held on a working day during business hours at the registered
office of the company or at some other place within the city, town or village in which
the registered office of the company is situated. The Central Government may,
however, exempt any class of companies from the above provisions. If any day is
declared by the Central government to be a public holiday after the issue of the
notice convening such meeting, such a day will be treated as a working day.

A company may, by appropriate provisions in its its articles, fix the time for its
annual general meeting and may also by a resolution passed in one annual general
meeting fix the time for its subsequent annual general meetings.

Companies licensed under Section 25 are exempt from the above provisions
provided that the time, date and place of each annual general meeting are decided
upon beforehand by the Board of Directors having regard to the directions, if any,
given in this regard by the company in general meeting.

In case of default in holding an annual general meeting, the following are the
consequences :-

1. Any member of the company may apply to the Company Law Board.
The Company Law Board may call, or direct the calling of the meeting, and give
such ancillary or consequential directions as it may consider expedient in
relation to the calling, holding and conducting of the meeting. The Company
Law Board may direct that one member present in person or by proxy shall be
 deemed to constitute the meeting. A meeting held in pursuance of this order will
be deemed to be an annual general meeting of the company. An application by a
member of the company for this purpose must be made to the concerned
Regional Bench of the Company Law Board by way of petition in Form No. 1 in
Annexure II to the CLB Regulations with a fee of rupees fifty accompanied by
(i) affidavit verifying the petition, (ii) bank draft for payment of application fee.

2. Fine which may extend to Rs. 5,000 on the company and every officer
of the company who is in default may be levied and for continuing default, a
further fine of Rs. 250 per day during which the default continues may be levied.

Purpose of holding Annual General Meeting

It is only at the annual general meeting of a company that the shareholders can
exercise any control over the affairs of the company. They can confront the
directors, their elected representatives, at least once a year. They also get an
opportunity to discuss the affairs and review the working of the company. They
can also take the necessary steps for the protection of their interests. They may,
for example, refuse to re-elect a director whose actions and policy they
disapprove They can also take up any other business relating to the affairs of the
company for discussion. Appointment of auditors is also made at the annual
general meeting. Annual accounts are presented for the consideration of
shareholders and dividends are declared in the annual general meeting.

Business transacted at these meetings.

At every AGM, the following matters must be discussed and decided. Since
such matters are discussed at every AGM, they are known as ordinary business.
All other matters and business to be discussed at the AGM are special business.

The following matters constitute ordinary business at an AGM:-

a. Consideration of annual accounts, director’s report and the auditor’s

report
b. Declaration of dividend
c. Appointment of directors in the place of those retiring
d. Appointment of and the fixing of the remuneration of the statutory
auditors.

In case any other business (special business ) has to be discussed and decided
upon, an explanatory statement of the special business must also accompany the
notice calling the meeting. The notice must also give the nature and extent of the
interest of the directors or manager in the special business, as also the extent of
the shareholding interest in the company of every such person. In case approval
of any document has to be done by the members at the meeting, the notice must
also state that the document would be available for inspection at the Registered
Office of the company during the specified dates and timings.

 Extra ordinary General meeting

Every general meeting (i.e. meeting of members of the company) other than the
statutory meeting and the annual general meeting or any adjournment thereof, is an
extraordinary general meeting. Such meeting is usually called by the Board of
Directors for some urgent business which cannot wait to be decided till the next
AGM. Every business transacted at such a meeting is special business. An
explanatory statement of the special business must also accompany the notice calling
the meeting. The notice must should also give the nature and extent of the interest of
the directors or manager in the special business, as also the extent of the
shareholding interest in the company of every such person. In case approval of any
document has to be done by the members at the meeting, the notice must also state
that the document would be available for inspection at the Registered Office of the
company during the specified dates and timings.

The Articles of Association of a Company may contain provisions for convening an

extraordinary general meeting. Eg. It may provide that "the board may, whenever it
thinks fit, call an extraordinary general meeting" or it may provide that "if at any
time there are not within India, directors capable of acting who are sufficient in
number to form a quorum, any director or any two members of the company may
call an extraordinary general meeting".

Extraordinary General Meeting on Requisition :

The members of a company have the right to require the calling of an extraordinary
general meeting by the directors. The board of directors of a company must call an
extraordinary general meeting if required to do so by the following number of
members :-

a. members of the company holding at the date of making the demand for
an EGM not less than one-tenth of such of the voting rights in regard to the
matter to be discussed at the meeting ; or

b. if the company has no share capital, the members representing not less
than one-tenth of the total voting rights at that date in regard to the said matter.

The requisition must state the objects of the meetings and must be signed by the
requisitioning members. The requisition must be deposited at the company's
registered office. When the requisition is deposited at the registered office of the
company, the directors should within 21 days, move to call a meeting and the
meeting should be actually be held within 45 days from the date of the lodgment of
the requisition. If the directors fail to call and hold the meeting as aforesaid, the
requisitionists or any of them meeting the requirements at (a) or (b) above, as the
case may be, may themselves proceed to call meeting within 3 months from the date
of the requisition, and claim the necessary expenses from the company. The
company can make good this sum from the directors in default. At such an EGM,
any business which is not covered by the agenda mentioned in the notice of the
meeting cannot be voted upon.

Power of Company Law Board to Order Calling of Extraordinary General

Meeting :

If for any reason, it is impracticable to call a meeting of a company, other than an

annual general meeting, or to hold or conduct the meeting of the company, the
Company Law Board may, either i) on its own motion, or ii) on the application of
any director of the company, or of any member of the company, who would be
entitled to vote at the meeting, order a meeting to be called and conducted as the
Company Law Board thinks fit, and may also give such other ancillary and
consequential directions as it thinks fit expedient. A meeting so called and conducted
shall be deemed to be a meeting of the company duly called and conducted.

Procedure for Application under Section 186 :

An application by a director or a member of a company for this purpose is required

to be made to the Regional Bench of the Company Law Board before whom the
petition is to be made in Form No 1 specified in Annexure II to the CLB Regulations
with a fee of Rs200. The petition must be accompanied with the following
documents –

a. Evidence in proof of status of the applicant.

b. Affidavit verifying the petition.
c. Bank draft evidencing payment of application fee.
d. Memorandum of appearance with copy of the Board's resolution or
executed vakalat nama, as the case may be.

 Debentures holder’s meeting

A company issuing debentures may provide for the holding of meetings of the
debenture holders. At such meetings, generally any matters pertaining to the
variation in terms of security or to alteration of their rights are discussed. All matters
connected with the holding, conduct and proceedings of the meetings of the
debenture holders are normally specified in the Debenture Trust Deed. The decisions
at the meeting made by the prescribed majority are valid and lawful and binding
upon the minority.

 Purpose of holding Debenture holder meeting

The meeting of debenture holders is held in accordance with the conditions
contained in the debenture trust deed.

These meetings are called from time to time where the interests of debenture holders
are involved e.g. at the time of reconstruction, reorganization, amalgamation or
winding up of the company.

The rules and regulations entered in the trust deed relate to notice of the meeting,
resolutions, quorum of the meeting and writing and signing of Minutes.

 Creditor’s meeting
Sometimes, a company, either as a running concern or in the event of winding up,
has to make certain arrangements with its creditors. Meetings of creditors may be
called for this purpose. Eg U/s 393, a company may enter into arrangements with
creditors with the sanction of the Court for reconstruction or any arrangement with
its creditors. The court, on application, may order the holding of a creditors' s
meeting. If the scheme of arrangement is agreed to by majority in number of holding
debts to value of the three-fourth of the total value of the debts, the court may
sanction the scheme. A certified copy of the court's order is then filed with the
Registrar and it is binding on all the creditors and the company only after it is filed
with Registrar.

Similarly, in case of winding up of a company, a meeting of creditors and of

contributories is held to ascertain the total amount due by the company and also to
appoint a liquidator to wind up the affairs of the company.

Purpose of holding these meetings,

Sec. 391 provides that where a compromise or arrangement is proposed between a
company and its creditors, meeting of creditors may be called by the company on its
own or by an application by any creditor.

The meetings of creditors are also held when the company has gone into liquidation.
These meetings are held to estimate the total amount due by the company to its
creditors and to appoint liquidators to ensure that the company closes down the
business legally as per Companies Act 1956.
  Class meetings
Class meetings are meetings which are held by holders of a particular class of shares,
e.g., preference shareholders. Such meetings are normally called when it is proposed
to vary the rights of that particular class of shares. At such meetings, these members
discuss the pros and cons of the proposal and vote accordingly. (See provisions on
variations of shareholder’s rights). Class meetings are held to pass resolution which
will bind only the members of the class concerned, and only members of that class
can attend and vote.

Unless the articles of the company or a contract binding on the persons concerned
otherwise provides, all provisions pertaining to calling of a general meeting and its
conduct apply to class meetings in like manner as they apply with respect to general
meetings of the company.

Under the Companies Act, class meetings of various kinds of shareholders and
creditors are required to be held under different circumstances. Under Sec. 106, class
meetings of the holders of different classes of shares are to be held if the rights
attaching to these shares are to be varied. Similarly, under Sec. 394, where a scheme
of arrangement is proposed, meetings of the several classes of shareholders and
creditors are required to be held. Also at the time of winding up. the meetings of
creditors and members, for certain purposes, are held.

Prima facie, a class meeting should be attended by the members of the class in order
that the discussion of the matters which the meeting has to consider may be carried
on unhampered. The presence of a number of persons with conflicting interests
would render it impossible for members of the class adequately to discuss the matter
from their point of view.

And if the presence of outsiders is retained in spite of the ascertained wish of the
constituents of the meeting for their exclusion, it cannot be said that a separate
meeting of the class had been duly held. But where the constituents of the meeting
meet together and no one in fact raises any objection to the presence of strangers or
outsiders within the same four walls, there is no reason why their meeting should not
be a perfectly good meeting

7.2.2 Meeting of Board of Directors

The directors are a body to whom the duty of managing the general affairs of the
company is entrusted. They act as the agents of the company as company cannot do any act
on its own.

Therefore, wide powers have been vested in the board of directors in regard to
management of the company.

For efficient management of the affairs of the company, the directors are required to meet
frequently to discuss and review important matters and to decide number of meetings.

Period
Sec. 285 of-the Act provides that a board meeting must be held at least once in every three
months, and at least four such meetings must be held in a calendar year.

The central government may exempt by notification in Official Gazette any company
from the above provisions, if the company does not have enough work to justify
expenditure on quarterly meeting of the board.
 Notice
Notice of every meeting of the board of directors of company shall be given in writing to
every director in India at his usual address in India. The Companies Act does not specify
any period of notice for board of directors. If directors are informed that in future the
meetings will be held on second Monday of every month it is sufficient compliance of the
statute. It is not required that the meeting of board of directors should be held only in the
city where the registered office of the company is situated. It can be held at any place.

Quorum
The quorum for a meeting of the board of directors of company shall be one-third of its
total strength (Any fraction contained in that one-third being rounded off as one) or two
directors whichever is higher.

If the number of interested directors exceeds or is equal to or two-thirds of the total

strength, then remaining directors who are not interested being not less than two shall be
the quorum. The quorum is required to be present throughout the conduct of the meeting.

The decision of the board will be invalid if the quorum is not maintained. If the meeting
cannot be held for want of quorum it stands adjourned till the same day m the next week
at the same time and place.

Chairman
Every meeting of the beard must have a chairman to preside over it. The articles usually
name the chairman who shall preside over the board meeting.

If the articles do not name the chairman, the director may elect a chairman of the meeting.
Generally, The chairman of the board also presides at general meeting of the company.

Resolutions
At the meetings of the board the decisions are taken by passing resolutions on the matters
placed before the meeting for consideration. The board may pass resolution by circulation
in case it is not possible to hold a board meeting for any reason.

A resolution is deemed to be passed when the draft together with the necessary papers is
circulated among the directors present in India and number among whom it is circulated
is not less then quorum fixed for board meeting, and it has been approved by majority.

Certain powers of the board can be exercised by means of passing resolutions at board's
meeting. These are
(i) the power to make call,

(ii) the power to issue debentures

(iii) the power to borrow money,

(iv) the power to fill up casual vacancy, etc.

The question arising at the meeting of the board of directors is decided by a single majority.
Each director has one vote and the chairman in case of need may exercise casting vote.
However, the Act requires unanimous consent of all the directors in question matters

7.3 Requisites of a valid Meeting

A meeting can validly transact any business if the following requirements are satisfied.
• The meeting must be duly convened by a proper authority.
• A proper notice must be served in the prescribed manner.
• A quorum must be present
• A chairman must preside.
• Minutes of the proceedings must be kept.

Proper authority

The proper authority to convene a general meeting (whether statutory, annual general or extraordinary)
of a company is the Board of directors. The Board should pass a resolution to call a general meeting, at a
duly convened meeting of the Board. If the directors do not call the meeting, the members or the
Company Law Board may call the meeting.

If some defect in the appointment or qualification of the directors present at the Board meeting comes to
light after the Board has acted bona fide, such a defect is not necessarily fatal to the validity of their
resolution to call the meeting. Even if the meeting of the Board at which it is resolved to call a general
meeting is not properly convened or constituted, the general meeting called by the Board can act

Notice of meeting

A proper notice of the meeting should be given to the members and all others who are entitled to attend
the meeting.

Length of notice

Not less than 21 days' notice. A general meeting of a company may be called by giving not less that 21
days' notice in writing to the members. The use of the word 'may' in Sec. 171 does not mean that the
notice can be dispensed with.

The expression "not less than 21 days' notice" implies notice of 21 whole or clear days. Part of the day,
after the hour at which the notice is deemed to have been served, cannot be combined with the part of the
day before the time of the meeting, or the day of the meeting, to form one day. Each of the 21 days must
be a full or a calendar day, so that notice can be said to be not less than 21 days* notice

The period of 21 days is computed from the date of receipt of the notice by the members. It excludes the
day of service of the notice and the day on which the meeting is to be held. Notice is deemed to have
been received by the members at the expiration of 48 hours after the letter containing it is posted.

Quorum.

The word quorum has a Latin origin literally meaning 'of whom'. It is the minimum number of members
of any body of society whose presence is necessary for the transaction of business.

When members assemble at the registered office of the company in response to the notice calling a
general meeting, the first thing to do is to see whether the quorum is complete or not. The Articles of
Association generally lay down the quorum in the absence of which the meeting will not be properly
constituted. If the Articles do not provide otherwise, five members present personally (proxies not
included) in the general meeting of a public limited company will constitute the quorum.

In case of a private limited company, the personal presence of two members will constitute the quorum. If
the quorum is not complete, the chairman and members will wait for half an hour after the scheduled time
for the meeting.

In case the meeting has been called on the basis of a requisition, it shall stand dissolved if the quorum is
not complete even within half an hour of the time of the meeting. If, however, the meeting has been
convened by the management, it shall be adjourned to the same day in the next week, at the same time
and place unless the Board fixes some other time, day and place for it.

The adjourned meeting can proceed to business if the quorum is not complete within half an hour. In case
of meetings called or directed to be called by the Court or the Central Government, the quorum shall be
fixed by the order under which the meeting is held.

Chairman.

The chairman is the person responsible for the proper conduct of the proceedings. A meeting cannot be
said to have been prop9rly constituted without somebody in the chair to regulate its conduct. The first
chairman of the company is generally named in the Articles. In most of the companies, the chairman of
the Board of Directors presides over their general meeting too.

If the chairman of the company is not present within fifteen minutes of the time fixed for a meeting, the
directors present shall elect one from amongst themselves to the chair. But if no director is willing to
preside, the members present shall elect one of themselves to be the chairman of the meeting, unless the
Articles provide otherwise.

Duties of the chairman as covered in the agenda

• He must act at all times bona fide and in the interests of the company as a whole.

• He must ensure that the meeting is properly convened and constituted, i.e.
1. a proper notice has been given,
2. the rules as to quorum are observed, and
3. his own appointment is in order.

• He must ensure that the proceedings at the meeting are properly and regularly conducted.

• He must ensure that the provisions of the Act and the Articles are observed, and the business is taken
in the order set out in the agenda.

• He must see that all the business transacted at the meeting is within the scope of the meeting.

• He must preserve and maintain order In the meeting and decide any points of order submitted to him.

• He must ascertain the sense of the meeting properly with regard to any question before it. He must
do so by putting the motions in their proper form, and declare the result of the voting.

• He must decide incidental questions arising for decision during the meeting.

• He must exercise his casting vote bona fide in the interests of the company.

• He must exercise correctly his powers of adjournment and of taking a poll. He must see that any
disorderly persons are removed, and where it is impossible to maintain order, he should adjourn the
meeting. Even if the relevant rules do not give him the power to adjourn the meeting he may do so in
the event of disorder. The adjournment must be no longer than he considers necessary and he must,
so far as possible, communicate his decision to those present

• He must give the members who are present a reasonable and sufficient opportunity to express their
views on the motion or resolution before the meeting. He must not allow discussion except upon a
motion or resolution. But at the expiration of a reasonable time he is entitled, if he thinks fit to put a
resolution to the meeting that the discussion be terminated
 • He must also take care that the rights of the minority are not ignored.

Conduct of the meeting

• The way in which a meeting is to be conducted is a matter for the chairman, with the assent of the
persons properly present to be determined in the light of the general law and the company's Article of
Association.

Minutes

After the chairman settles in the chair, he calls the meeting to order. The secretary presents the minutes of
the last meeting before the members present for confirmation. Minutes of the proceedings of meetings are
statutorily required to be maintained under Section 193 of the Companies Act. Under this section the
minutes of a meeting must be recorded within fourteen days of the meeting concerned.

The minutes must be recorded in a proper minute’s book which has pages consecutively numbered.
Pasting of minutes to any other book is prohibited. The minutes of each meeting are required to contain a
fair and correct summary of the proceeding of the meeting. The chairman enjoys absolute discretion
regarding the exclusion of matters which are irrelevant or are detrimental to the interests of the company.
Under Sec. 194 of the Act, minutes of meetings kept in accordance with the provisions of Section 193
(signed by the chairman in confirmation thereof) shall be evidence of the proceedings recorded therein.

The minutes of general meetings are required to be kept at the registered office of the company and must
be open to inspection by members without charge at least for two hours every day. If a member wants a
copy of the minutes, he can get it within seven days of the request on payment of 37 paise per hundred
words or fractions thereof (Section 196).

Minutes of proceedings at a company meeting should "consist of a record of business transacted by the
meeting as a whole and would (except in odd cases) exclude any reference to conduct or events which are
not themselves items of transacted business.* Minutes may be of two types: Minutes of narration—These
are records of events or items of business which do not require formal resolutions, such as the notation of
the members present, recording of apologies for non-attendance, statements of proposers and seconders
of motions, etc., and (b) Minutes of resolution—These set out a statement of what was resolved and may,
or may not, be accompanied by a statement indicating the mover and seconder.

7.4 Proxies
The term proxy is used to refer to the person who is nominated by a shareholder to represent him at a
general meeting of the company and also to the instrument through which such a nominee is named to be
authorized to attend a meeting. Under Section 176 (1) every member of the company is entitled to
appoint another person (member or a non-member) to attend a general meeting and vote if need be.

Unless a provision to the contrary is made in the Articles, the members of companies not having a share
capital cannot appoint proxies to represent them. Similarly, a member of a private limited company
cannot nominate more than one proxy for the same meeting. As for the rights of the proxy, such a
nominee cannot speak at the general meeting for which he is nominated nor can he vote unless there is a
poll {i.e., votes are cast in a prescribed form according to each shareholder's holdings).

The Act [under Section 176 (2)] expressly requires that a statement, that a member entitled to attend and
vote is entitled to appoint a proxy instead of himself and that a proxy need not be a member, must be
displayed with reasonable prominence in the notice for th meeting concerned. Default in respect of this
requirement is punishable with fine of to Rs. 500.

Table 'A' lays down that an instrument appointing a proxy must be deposited with the company not less
than 48 hours before the time for the meeting. Any provision in the Articles of a company requiring the
proxy form to be deposited earlier than 48 hours will be invalid. In case of a poll, the proxy form can be
required to be deposited not less than 24 hours before the time fixed for the poll.
 The Act also requires that an instrument appointing a proxy must be in writing and must be signed by the
appointer or his legally authorized representatives. The form for proxy is given in Schedule IX of the Act,
though a company may adapt it to its own circumstances.

If officers or an officer of a company invites a member to appoint a person or any of a group of persons
as proxies at the expense of the company, he or they will be liable to a fine up to one thousand rupees.
This fine will not be imposed if the member concerned himself requested the company to send a list of
persons available to be nominated as proxies and such a list is freely made available to every member.

Members can inspect proxy forms twenty-four hours before the meeting if they have already given a
notice for this purpose three days in advance of the meeting. Two types of proxies may be distinguished,
A proxy authorized to vote only upon a particular resolution is called a 'special proxy' while a proxy
empowered to vote on all resolutions in a meeting may be called a 'general proxy'.

7.5 Resolution
A resolution means a formal expression of the opinion of a meeting. It is a motion carried and passed
by a meeting. It is a collective decision taken at the meeting with the required majority.

The resolutions passed by a company in meetings are of two kinds, namely, ordinary resolution and
special resolution.

Ordinary Resolution

1. Thus is a resolution passed at a meeting by a simple majority of votes, including the casting vote
of the chairman, if any. The following are some of the examples of acts, which a company can do
by passing an ordinary resolution:

2. To change its name where it has been registered with a name very nearly like that of another
existing company.

3. To authorize the issue of shares at a discount.

4. To alter the share capital by increase, consolidation and conversion of shares into shares of larger
amount, conversion of fully paid shares into stock or vice-versa, subdivision of shares and
cancellation of unissued shares.

5. To adopt the annual accounts of the company.

6. To appoint directors.

7. To remove a director.

8. To appoint the auditor at the annual general meeting.

9. To declare dividend recommended by the directors.

10. To wind-up the company voluntarily when the period fixed for its duration has expired.

Special Resolution

It is a resolution which is passed at general meeting by a majority of three fourth of the members
present. The notice of the general meeting at which a special resolution is to be moved must expressly
state that the resolution is to be moved as a special resolution.
A company can do the following acts only by passing special resolution:

1. To transfer the registered office of the company from one state to another or to alter its objects.

2. To alter the Articles of Association.

3. To reduce share capital.

4. To shift the registered office from one place to another in the same state.

5. To make the liability of directors or managers unlimited.

6. To approve the making of loans to other companies.

7. To resolve that the company be wound up by the court.

8. To wind up a company voluntarily.