Justify the following statements.
1) Annual General Meeting is adjourned in absence of quorum.
1) The quorum means the minimum number of members legally required to remain present at the beginning and during the course of the meeting. 2) Meeting without quorum is invalid and the business it transacts becomes null and void.
3) The Companies Act has prescribed certain minimum requirement for quorum e.g. the quorum for a general meeting of a public company is 51 the number of members of the company does not exceed 1,000 and for a private company quorum is 2 members.
4) The proxies cannot be counted for quorum. The Articles of Association may increase the minimum requirement but cannot decrease it. 5) The quorum is also required during the course of the meeting The moment when attendance fan.
6) short of the quorum, a member may raise a point of order and Chairman has to stop the proceeding, on‘ the meeting and is adjourned it.
7) Even in the beginning of meeting if requisite quorum is in formed or constituted, the meeting will be postponed for an hour and even after that if quorum is not constituted the meeting Will not be held and it will be adjourned and will be held on me same day. Time and place in the next week.
2) A notice of meeting must be sent to all members in case of General Meeting.
1) A notice is an advance intimation to the persons entitled to receive it. About the venue, day, date and time of a meeting and the business to be transacted in it with a request to attend the meeting.
2) The notice may be sent with the necessary documents. A notice of the meeting must be given to all the members entitled to attend the same. Such a notice must contain details of holding the meeting and the agenda of the meeting, further.
3) The notice must be sent well in advance to all the concerned members.
4) In case of General Meetings such as Annual General Meeting and Extraordinary Meeting. a notice of clear 21 days is necessary to be given to all members.
5) Notice which is sent well in advance to the members enable them to prepare about the points to be discussed in a meeting, they take active part in the discussion held in the meeting. They know in advance time. Date.
6) Day and venue of the meeting and hence they keep themselves free to attend the meeting at scheduled time.
3) Extra ordinary general meeting is called under special circumstances.
1) A General Body Meeting of all the shareholders of a company which is held in between the two consecutive Annual General Meetings is called Extraordinary General Meeting This meeting is convened whenever it become Necessary to take immediate decision on some important issues affecting the business of the company which cannot be postponed till the next Annual General Meeting.
2) This meeting is held to transact urgent and special business like alterations in Memorandum of Association and Articles of Association.
3) Removal of a Director before the expiry of his/her term, removal of auditor before the expiry of his/her term and voluntary winding-up of the company.
4) If the business to be transacted is not special and not urgent. then such business can be discussed in the next Annual General Meeting.
5) Thus, only under special circumstances Extraordinary General Meeting is held.
4) Board of Directors can exercise their powers collectively through the Board Meeting.
1) Shareholders are large in numbers and are scattered and spread over a wide area. They cannot personally take part in the management to manage the day-to-day affairs of the company.
2) Hence they hold their meeting and elect their representatives called Directors. They are collectively called Board of Directors. The Directors are given wide powers in the management of the company.
3) The Directors exercise their powers collectively through their periodical meetings called Board Meetings.
4) These meetings are important to share thoughts, discuss. debate and take policy decisions to manage day to-day workings of the company.
5) In Board Meeting. Directors collectively take policy decisions on important issues such as issue of shares, allotment of shares, calls on shares, forfeiture of shares, sales, purchases, appointment of staff, expansion of business, etc.
6) Thus, Board of Directors exercises their powers collectively through Board Meetings
5) The Quorum for Annual General Meeting of a public company depends upon the number
1) every type of meeting has a specific requirement of quorum. The members those forming the quorum must be present personally.
2) The Companies Act provides a quorum of 2 members for the General Meeting of a private public and 5 members in the case of a public company.
3) As per the new provisions made under Section 103(1) of the Companies Act 2013. the quorum for the meetings of the Public Limited Company is stated in the following table :
Number of shareholders
Not more than 1000
Five (5) members
More than 1000 but up to 5000
Fifteen (15) members
Thirty (30) members
4) These members must be personally present at the meeting for discussion, debate and giving opinion and votes for taking decisions on various issues. The Articles of Association may make a separate provision regarding the quorum, but such a provision cannot be less than the minimum prescribed by the Companies Act. From the study and analysis of the above table, it is clear that Quorum for Annual General Meeting of a public company depends upon the number of shareholders.
5) However, proxies are not counted in quorum.
6) When a company is in a financial difficulty, it may call a meeting of creditors.
A) Meaning : The creditors of the company include debentureholders, depositors, company bankers, lenders and other financial institutions. Etc. A meeting arranged and held with creditors for discussion and taking decisions on certain problems relating to the terms and conditions of loans which affect their interest is called creditors’ meeting. Purpose of creditors’ meeting: The creditors’ meeting is usually held:
1. to make compromise in disputes with its creditors
2. to alter the rate of interest
3. to alter the terms of security
4. to modify the rights of creditors such as debenture holders, depositors and other creditors, etc.
5. to get support of the creditors When a company passes through a financial crisis.
6. To compute the amount payable by the company to creditors and contributors when a company goes into liquidation or adjudicated insolvent by the court.
B) Legal provisions : The procedure of holding creditors’ meeting is laid down by the Companies Act, 2013. Similarly, the rules and procedure for holding such meeting are usually provided in the trust deed, e.g. debenture trust deed.
C) Frequency : Creditors’ meetings are held whenever the decisions affecting their interest are to be taken. Such a meeting is very rarely arranged and it is normally convened in the case of the Winding-up of the company.
D) Types : Creditors’ meetings are classified as meeting of debenture holders, meeting of depositors and meeting of other creditors such as trade creditors, suppliers, loan creditors, etc. A creditors’ meeting may be arranged class wise for discussion and solving varied problems of Creditors
7) As per the Companies Act every company has to hold the Annual General Meeting.
1) Annual General Meeting is a meeting of all the members of the company which is held once a year after the closing of the financial year in accordance with the provisions of Section 96 of the Companies Act, 2013.
2) The main objects of holding the Annual General Meeting are to inform the members of the company about the performance of the company during the financial year completed and to present the duly audited Profit & Loss Account and Balance Sheet of the company for their consideration and approval.
3) Besides, the meeting transacts other items of ordinary business such as appointment of Directors, auditors, solicitors, etc. and declaration of dividend. It also transacts special business such as increase in nominal capital, alteration in the Memorandum and Articles of Association, etc. All these items of business have to be considered and decided by the members only.
4) Therefore the Companies Act has made it compulsory for every Company (including a private company) to hold the Annual General Meeting 6 months after the completion of its financial year.
5) The time interval between two Annual General Meetings should not be more than 15 months.