Meaning and Definition of Company Meeting:
The word meeting is not defined anywhere in the Companies Act.
Ordinarily, a company may be defined as gathering, assembling or coming together
of two or more persons (by previous notice or by mutual arrangement) for
discussion and transaction of some lawful business.
A company meeting may be defined as a concurrence or coming together of at least
a quorum of members in order to transact either ordinary or special business of
Some important definitions of meeting are given below:
- In the case of Sharp vs. Dawes (1971), the meeting is defined as An
assembly of people for a lawful purpose or the coming together of at least
two persons for any lawful purpose.
- According to P.K. Ghosh Any gathering, assembly or coming together of
two or more persons for the transaction of some lawful business of common
concern is called meeting.
- According to K. Kishore, A concurrence or coming together of at least a
quorum of members by previous notice or mutual agreement for transaction
business for a common interest is meeting.
- From the above definitions of meeting, it can be concluded that meeting
is the congregation of several persons in a particular place for the purpose
of discussing some important matters and expressing their opinion on the
Characteristics of a Company Meeting:
The characteristics of a company meeting are as follows:
- Two or more persons (who are the members of the Company) must be present
at the meeting.
- The assembly of persons must be for discussion and transaction of some
- A previous notice would be given for convening a meeting.
- The meeting must be held at a particular place, date and time.
- The meeting must be held as per provisions/rules of Companies Act.
To Convene a meeting, two or more persons must be present. A meeting cannot be
constituted by one person. However, there are certain circumstances where one
person can constitute a valid meeting.
They are as follows:-
Kinds of Company Meetings:
The meetings of a company may be classified into the following categories:
- Meeting Convened by Central Government:
Where the Central Government calls an annual general meeting under Sec. 167
of the Act, it may direct that one member of the company present in person
or by proxy shall constitute the meeting.
- Absence of Quorum in an Adjourned Meeting:
By quorum we mean the minimum number of the members who must be present at a
meeting as required by the rules. In the absence of quorum the proceedings
of the company cannot be started.
If the quorum does not complete within half an hour of the prescribed time,
meeting will be adjourned to the same time, place and date in the next week. If
at the adjourned meeting also the quorum does not complete, the members present
shall be quorum and attending members (even if one member is present) may be
allowed to come to a decision and pass resolutions. It means one member present
in person shall constitute a valid meeting.
- Meeting Convened by Company Law Board:
Where the Company Law Board calls a meeting under Sec. 186 of the Act (other
than an annual general meeting), it may direct that one member present in person
or proxy shall be deemed to constitute a valid meeting.
- Class Meeting of Shareholders:
Where one person held all the shares of a particular class, that member alone
was held to constitute a valid meeting of that class of shareholders,
- Meeting of One-Man Committee of Board of Directors:
As per Rule 77 of ‘Table A’, the board of directors may delegate their works to
a Committee which may have only one member. When the meeting of such Committee
will be held, only one member will be present and he alone will constitute a
1. Meetings of shareholders:
I. Statutory meeting;
II. Annual general meeting (AGM)
III. Extra ordinary general meeting;
IV. Class meetings.
2. Meetings of directors:
1. Meetings of board of directors;
2. Meetings of directors;
3. Meetings of creditors.
4. Meetings of debenture-holders.
1. Meetings of Shareholders:
The shareholders are the real owners of the company, but due to certain
limitations they cannot take part in the management of the company. They leave
this to their representatives called the directors. For controlling the board of
directors and their activities ‘shareholders’ ‘meetings’ are held from time to
time. Meeting of shareholders can be classified as under.
I. Statutory Meeting:
Every public company having share capital must convene a general meeting of
shareholders within a period of not less than one month and not more than six
months after the date on which it is authorised to commence its business. This
is the first meeting of the shareholders of the company and it is held once in
the whole life of the company.
The following companies need not to hold statutory meeting:
(i) Private company.
(ii) Company limited by Guarantee having no share capital.
(iii) Unlimited liability company.
(iv) A public company which was registered as a private company earlier.
(v) A company which has been deemed as a public company under Sec. 43 A.
Notice of the Meeting:
The directors are required to send a notice of the meeting to all the members of
the company at least 21 days before the date of the meeting stating that it is
the ‘statutory meeting’ of the company. If the notice convening this meeting
does not name it as the Statutory Meeting it will not Amount to compliance
with the provisions of this section.
Objects of Statutory Meeting:
The statutory meeting is held to inform the shareholders about matters relating
to incorporation, allotment of share, the details of the contracts concluded by
the company, etc. According to Stephenson, Statutory Meeting is convened in
order to aord the shareholders an opportunity for seeing what degree of success
has attained the floatation of the company and in order that any special matters
requiring their approval may be laid before them.
The directors are required to prepare and send a report called the ‘Statutory
Report’ to every member of the company at least 21 days before the date of the
meeting. If the report is sent later it shall be deemed to have been duly
forwarded if it is so agreed to by a unanimous vote of the members entitled to
attend and vote at the meeting [Sec. 165 (2)]. A copy of this report should be
sent to the Registrar.
The statutory report must set out the following information:
(i) Shares allotted:
The total number of shares allotted distinguishing those allotted as fully or
partly paid-up otherwise than in cash and stating in case of shares partly
paid-up the extent to which they are so paid-up and in either case the
consideration for which they have been allotted.
(ii) Cash received:
The total amount of cash received by the company in respect of all the shares
allotted, distinguished as aforesaid.
An abstract of the receipts of the company and of the payments made thereto,
upto a date within seven days of the date of the report, exhibiting under
distinctive headings the receipts of the company thereto from shares and
debentures and other sources the payments thereto and particulars concerning the
balance remaining in hand and an account or estimate of the preliminary expenses
of the company, showing separately any commission, or discount paid or to be
paid on the issue or sale of shares or debentures.
(iv) Directors, auditors and other managerial personnel:
The names, addresses and occupations of its directors and auditors and also of
its manager and’ secretary, if any, and the changes which have occurred since
the date of the incorporation.
The particulars of any contract and the modification or the proposed
modification of any contract which is to be submitted for the approval of the
members at the meeting.
(vi) Underwriting contract:
The extent to which the underwriting contract, if any, has not been carried out
and the reason therefore.
(vii) Arrears of calls:
The arrears, if any due on calls from any director and the manager.
(viii) Commission and brokerage:
The particulars of any commission or brokerage paid or to be paid to any
director or to the manager in connection with the issue or sale of shares or
debentures of the company.
Certification of Report:
The statutory report must be certified as correct by not less than two
directors; one of whom shall be the managing director, if any The auditors of
company then shall certify it as correct regarding the shares allotted, cash
received in respect of such shares and the receipts and payment of the company.
A certified copy of the statutory report shall be filed with the registrar for
registration immediately after the same has been sent to the members of the
Procedure at the Meeting:
At the commencement of the meeting the Board shall place a list showing the
name, addresses and occupation of the members of the company and the number of
the shares held by them. During the continuance of the meeting the list shall
remain open for inspection by members.
The members present at the meeting may discuss any matter relating to the
formation of the company or arising out of statutory report, whether previous
notice has been given or not. The meeting cannot pass a resolution on any item
or on a subject unless notice has been given according to the provisions of the
Effect of Non-compliance:
(i) If default is made in complying with the provisions of Section 165, every
director or other officer of the company who is in default will be liable to a
fine which may extend to Rs. 500.
(ii) If the statutory meeting is not held or the statutory report is not filed
as per the provisions of Companies Act, the company may be compulsorily wound up
under the orders of court. [Sec. 43(6)]
The court may, however, give direction for the statutory report to be filed or a
meeting to be held as the case may be and refuse to order the winding up of the
company. [Sec. 443(3)]
II. Annual General Meeting (AGM):
It is a meeting of shareholders which is held once in a year. The object of
holding this meeting is to review the progress and prospects of the company and
elect its office-bearers for the coming year.
Holding of the Meeting:
The first annual general meeting of the company is held within 18 months of its
incorporation. After holding such meeting it is not necessary to hold any other
annual general meeting in the year of its incorporation and in the next year.
Subsequent annual general meeting must be held by the company each year within
six months of the closing of the financial year. I the interval between any two
annual general meetings must not be more than fifteen months. The registrar is
empowered to extend the time upto a period to three months except in the case of
first annual general meeting.
The Board of Directors has to call Annual General Meeting giving 21 days notice
to all the members entitled to attend the meeting. However, such a meeting may
be called with shorter notice, if it is agreed to by all the members to vote in
Certified copies of Profit and Loss Account and Balance Sheet, Directors’ Report
and Auditor’s Report should also be forwarded to the members at least 21 days
before the holding of the meeting of the company. Considering the importance of
annual general meeting to shareholders it has been held that the directors must
call the meeting even though the accounts are not ready or the company is not
Effect of Non-Compliance:
(i) If default is made in holding the annual general meeting in accordance with
the above provisions, the Central Government may on the application of any
member of the company, call or direct for the calling of the meeting and give
such directions for this purpose as it thinks proper. The directions may include
that one member of the company present in person or by proxy shall be deemed to
constitute the meeting. (Sec. 167)
(ii) If default is made in holding a meeting of the company in accordance with
the above provisions, the company and its every officer who is in default shall
be punishable with a fine which may extend to five hundred and in case of
continued defaults, with a further fine which may extend to Rs. 250 for every
day during which such default continues,
(i) Routine Business:
(a) Adoption of Annual Accounts, Directors’ Report and Auditors’ Report.
(b) To declare the dividend.
(c) To elect the directors in place of those retiring by rotation.
(d) To appoint auditors and fix their remuneration.
(ii) Special Business:
(a) To increase Authorised Capital.
(b) To alter the Articles of Association, etc.
III. Extraordinary General Meeting:
Extraordinary meeting is a general meeting which is held between two Annual
General Meetings. Extraordinary General Meeting is Called to discuss any
particular matter of urgent importance to the company. This meeting is called
for the consideration of any specific subject, decision of which cannot be
postponed to the next Annual General Meeting.
This meeting may also be called to discuss the following:
(i) Alteration of any clause of Memorandum of Association; or
(ii) Changes in the Articles of Association; or
(iii) Scheme of the reduction of share capital etc.
The Extraordinary General Meeting may be called by the Directors or may be
convened by the Shareholders if the Board of Directors does not arrange for it
despite their requisition to call it.
Directors may call the Extraordinary General Meeting in accordance with the
procedure laid down in the Articles of Association of the company.
Shareholders holding at least one-tenth of the paid-up share capital of the
company can make a requisition to the Board of Directors to convince such a
If due to any reason it is impracticable to hold extraordinary general meeting
the Company Law Board may order to call such meeting either on its own
initiative or on the application of any director or any member of the company
who are entitled to vote at the meeting.
Section 186 of the Companies Act empowers the Company Law Board to call only
extraordinary general meeting and not the annual general meeting of the company.
If no such meeting is convened within 21 days of their requisition, shareholders
may themselves convene the meeting within 3 months from the date of their
A notice of 21 days has to be given to members indicating the nature and
particulars of the resolutions to be discussed. The special resolutions passed
at Extraordinary General Meeting have to be filed with the Registrar within 15
IV. Class Meetings:
When the meeting of a particular class of shareholders takes place such as
preference shareholder meeting, it is known as class meeting. Such a meeting can
be attended only by that class of shareholders. The articles define the
procedure for calling such meeting. Such a meeting is called for the alteration
in the rights and privileges of the shareholders and for the purpose of
conversion of one class of shares into another.
2. Meetings of Directors:
I. Meetings of Board of Directors:
At Least One Meeting in Every Three Months:
The directors of a company exercise most of their powers in a joint meeting
called the meeting of the Board.
In the case of every company, a meeting of the Board of Directors must be held:
(i) At least once in every three months, and
(ii) At least four such meetings shall be held in every year. [Sec. 285]
In other words, no three months should pass without directors’ meeting being
held, and no year should expire without at least four directors’ meetings having
been held in it.
The object of this section is to ensure that the Board meetings are held at
reasonably frequent intervals so that the directors may be in touch with the
management of the affairs of the company.
However, the Central Government is empowered to relax the rule with regard to
any class of companies (Section 285). The object of this provision is to save
smaller companies having insufficient business to be transacted at Board
meetings from unnecessary hardships and expenditure involved in holding them.
Notice of the Meeting:
Notice Of every meeting of the Board of Directors must be given in writing to
every director in India and at his usual address in India to every other
director who is outside India for the time being (Sec. 286). A director has no
power to waive his right of notice. Notice must be given to a director, even if
he has stated that he will be unable to attend the meeting.
There is no need to send notice, if the articles provide for meetings to be held
at regular intervals’ e.g., monthly, the time and place being fixed. Also, if
all the directors should meet casually, and are willing to hold a meeting, the
meeting can be held notwithstanding the absence of notice.
Unless the articles of the company provide a definite period of notice, a
reasonable notice must be given of the Board meeting. What is a reasonable
notice will depend on any particular case. If a proper notice is not given the
proceedings are invalid unless all the directors are present at the meeting.
The notice should mention the place, time and date of the meeting. The day must
be a working day and the time should be during business hours unless agreed
otherwise by all the directors. It is not necessary to state in the notice the
business to be transacted, unless the articles of the company or the Act so
The term ‘agenda’ means things to be done. In the present context it is a
statement of the business to be transacted at a meeting. It also sets out the
order in which the business is to be dealt with. Though the Companies Act does
not make it obligatory on the secretary to send an agenda or to incorporate the
same in the notice of Board Meeting, yet by convention it necessarily
accompanies the notice calling the meeting.
When the agenda is enclosed with the notice each director gives due
consideration to the proposed business and comes with necessary preparations for
discussion in the meeting.
There must be a proper quorum for every meeting. The quorum for Board Meeting
should be at least two directors or one-third of total strength of the Board of
Directors, whichever is more subject to a minimum of two directors. While
determining the total strength, the vacancies are not counted.
Again the directors who are interested in any of the resolutions to be passed at
the Board Meeting shall not be counted for the purpose of quorum of that
resolution. If at any time the number of interested directors exceeds or is
equal to two-thirds of the total strength of directors, then the remaining
directors who are not interested will be the quorum for that item, provided
their number is not less than two [Sec. 283].
If the meeting of the Board could not be held for want of quorum then unless the
articles otherwise provide the meeting shall automatically stand adjourned till
the same day in the next week and at the same time and place.
Where that day happens to be a public holiday then the meeting stands adjourned
to the next succeeding day, at the same time and place. If a meeting could not
be held for want of a quorum, it shall all right be counted towards the minimum
number of meetings which must be held in every year under Sec. 285. [Sec. 288]
Board meetings are called for the following business:
- (i) To issue shares and debentures.
- (ii) To make calls on shares.
- (iii) To forfeit the share
- (iv) To transfer, the shares.
- (v) To fix the rate of dividend.
- (vi) To take loan in addition to debentures.
- (vii) To invest the wealth of the company.
- (viii) To think over the difficulties of the company.
- (ix) To determine the policies of the company.
II. Meetings of the Committees of Directors:
The Board of Directors may form certain committees and delegate some of its
powers to them. These committees should consist of only directors. The
delegation of powers to such committees is to be authorised by the Articles of
Association and should be subject to the provisions of the Companies Act.
In a large company routine matters like Allotment, Transfer, Finance are handled
by sub-committees of the Board of Directors. The meetings of such committees are
held in the same way as those of Board Meetings.
3. Meetings of Creditors:
The meetings of creditors are called when the company proposes to make a scheme
for arrangement with its creditors.
Section, 391 to 393 of the Companies Act not only give powers to the company to
compromise with the creditors but also lay down the procedure of doing so.
4. Meetings of Debenture Holders:
Meetings of the debenture holders are held according to the conditions contained
in the debenture trust deed.
These meetings are called from time to time where the interests of debenture
holders are involved at the time of reconstruction, reorganisation, amalgamation
or winding up of the company.
The rules and regulations entered in trust deed relate to the notice of the
meeting, appointment of a Chairman of the meeting, passing the resolutions,
quorum of the meeting and the writing and signing of minutes.