UNIT 4 MEETING AND RESOLUTION

Meeting- Statutory Meeting- Annual General Meeting- Extra Ordinary General Meeting-
Notice Of Meeting- Quorum-Proxy-Board Of Directors Meeting - Committee- Types
Of Committee- Audit Committee-Stake Holders Relationship Committee- Corporate
Social Responsibility Committee. Resolutions -Ordinary Resolution- Special
Resolution- Resolution Requiring Special Notice.
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MEETINGS
Meaning
A meeting is a gathering of people to present or exchange information, plan joint activities,
make decisions, or carryout actions already agreed upon. In other words, as assembly of
relevant persons validly convened through proper notice for transacting business mentioned in
an agenda is known as a meeting.
A company as a legal entity is capable of acting in its own name. but since it has no physical
existence, it has always to act only through its members or directors of a company. Only when act
as a body at the respective meetings through resolution, the company is perceived to be acting.
Hence the meetings are very important for transacting and implementation of business politics.

REQUISITES OF A VALID MEETING

A meeting is any kind, to be valid, must satisfy the following conditions.
1. It must be properly convened. That is, it should be called by the proper authority entitled
to call the meeting. The proper authority to convene the meeting is the Board of
directors, shareholders or the Company Law Board
2. It must be legally constituted. This means that the meeting shou ld have a proper
chairman; quorum must be present
3. It should be conducted according to the provisions of the Act and the Articles
4. It should be properly conducted

Notice of Meeting
Notice of Meeting of a Company. A Notice of Meeting of a Company is a document informing the members or
directors of a company about an upcoming meeting. This document specifies the date, time and place of the
meeting and the general nature of the business to be transacted at the meeting.

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KINDS OF MEETINGS

Meeting of director

MEETINGS OF SHAREHOLDERS
1. STATUTORY MEETING
The first meeting of the shareholders of a public limited company which is mandatory
as per the Companies Act is known as statutory meeting. Every public limited company limited by
shares and limited by Guarantee Company must compulsorily hold this meeting within 6
months and not earlier than one month from the date on which the company is entitled to
commence business. This is held only once in the life time of the company.

The object of the meeting is to afford an opportunity to the shareholders to know

important details of company formation, the success of its capital issue, properties that have
been acquired, etc. Along with the notice convening the meeting, a report called statutory report
must also be sent to all members at least 21 days before the date of the meeting.

This meeting provides an opportunity to members to discuss various matters relating to the
contents of statutory report. They can also effect any modification to the contracts mentioned
in the prospectus.

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Content of Statutory Report
1. Details of shares issued for cash and those issued for consideration other than cash
2. Total amount of receipts and payments upto a date within 7 days of the report
3. An account or an estimate of the preliminary expenses
4. Particulars of contracts for approval and proposed modification
5. Details of underwriting contract not carried out and the reasons therefor
6. Particulars of commission or brokerage paid or to be paid to directors on issue of shares
or debentures
7. Particulars about directors, managing directors, manager and secretary
8. Particulars of calls due from directors, managing director, etc
The statutory report must be certified as correct by at least two directors, one of whom must
be a Managing Director. As far cash received on shares allotted and other receipts and payments
they must be certified by an auditor. A certified copy of the statutory report must be filled with the
Registrar. Members can inspect the list of members and the number of shares held by them.

Consequence of default
If any default is made in holding the statutory meeting within the prescribed time or in
filing the statutory report to the Registrar, every director or other officer in default is punishable
with a fine upto Rs.5,000.

Further, the court can order even winding up of the company on a petition filed by a
member of the company. Such is the significance of the statutory meeting.

2. ANNUAL GENERAL MEETING (AGM)

Every company is required to hold an annual general meeting in addition to any other
meetings. The first AGM must be held within a period of 18 months from the date of its
incorporation. Subsequently the interval between two AGM must not be more than 15 months.

The ordinary businesses at these meetings are:

i. Consideration and adoption of the annual accounts and the reports of the directors and
auditors

ii. Declaration of dividend

iii. Appointment of directors in place of those retiring

iv. Appointment of auditors and fixing remuneration to them

Special Business
All other businesses transacted at this meeting are called special businesses. Examples
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of special business; Removal of Director, issue of rights or bonus shares, election of a person
other than a retiring person as a director, etc

Consequences of Default
If a company fails to hold an AGM, the company and every officer who is in default
shall be punishable with a fine upto Rs.50,000 and in the case of continuing default, with a
further fine of Rs.2,500 per day during which the default continues.

Importance of AGM
The shareholders get an opportunity to review the performance of the company to
discuss the affairs of the company and to take steps necessary for protecting their interests.

3. EXTRAORDINARY GENERAL MEETING

Any meeting other than the statutory meeting and the AGM of the company is called
extraordinary general meeting. It is convened for transacting any urgent or special business
which cannot be postponed till the next AGM. An extraordinary general meeting may be
convened by the Board of directors on its own, or on the requisition of the members subject to
certain conditions.

Extraordinary General Meeting convened by the requisitionists

If the Board of directors fails to call the meeting within 21 days and the meeting is not
held within 45 days of requisition, the requisitionists themselves may call the meeting within
three months from the date of requisition.

Extraordinary General Meeting by Company Law Board

If it is not possible for the members to convene an extraordinary meeting, the Company
Law Board either on its own motion or on the application of any director or member may call
such a meeting.

4. MEETINGS OF THE BOARD OF DIRECTORS

Meetings of directors are called Board meetings. They are very important because all
important matters relating to the company and its policies are decided there at.

Provisions regarding Board Meetings

The Board meeting must be held at least once in every three calendar months. At least
four such meetings should be held in every year. The notice of every Board meeting must be
given by writing to every director. Who is present in India at his usual address. The quorum
for the Board meeting shall be one third of the total strength of the Board (any fraction being

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rounded off as one) or two directors whichever is higher.

The Board is entitled to exercise all such powers and to do all such acts as the company
is authorized to do. However, the Companies Act imposes certain restrictions on the powers of the
Board.

5. MEETINGS OF COMMITTEE OF DIRECTORS

Since it is not possible for the Board to devote time to carry on investigation on different
matters, the Board may delegate their powers to committees, if the Articles of Association so
provides. The Board is empowered to delegate for example the following powers to any
committee of directors.

a) The power to borrow money, otherwise than on demand

b) The power to invest the funds of the company

c) The power to make loans, etc

6. MEETINGS OF DEBENTURE HOLDERS

Such meetings are convened when the company wants to change the terms of security
or to modify the rights, or to change the rate of interest payable, etc

7. MEETINGS OF CREDITORS
Meetings of creditors are held when the company proposes to make a scheme of
arrangements with its creditors.

OTHER ASPECTS TO BE REMEMBERED DURING THE MEETINGS

A. PROXIES
The term ‘Proxy’ may refer to a person who is authorized by a member for the purpose of
attending the meeting. It also means the instrument by which the proxy is authorized. The
following points relating to proxies are worth nothing;

 Members of a company having a share capital have a right to appoint proxies.

 Proxy need not be a member of the company

 Proxy can attend a meeting but he has no right to speak

 Proxy cannot vote except on a poll

 A member can appoint more than one proxy

 The proxy form must be in writing, duly signed by the appointer and stamped. It must
be lodged at the company’s office 48 hours before the commencement of the meeting.

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B.QUORUM
The word ‘Quorum’ means the minimum number of members required to be personally
present at a meeting for validly transacting any business. Usually the quorum is fixed by the
Articles.

The quorum shall be two members personally present in the case of a private company and
five in case of public company. The quorum for the Board meeting shall be one third of the
strength or two directors whichever is higher. However, the Articles may provide a larger
number.
For calculating quorum, proxies should not be counted and only members present in
person must be considered. Quorum should be present throughout the meeting. The importance
of quorum can be understood if it is noted that any resolution passed in the absence of a quorum
is not valid. Similarly, if quorum is not present, the meeting itself stands adjourned.

B. AGENDAOF MEETING
Agenda means the list of business to be transacted at the meeting. It is generally
prepared by the secretary in consultation with the chairman.

C. MINUTES OF MEETING
The term minutes refers to accurate official record of decisions taken at various
company meetings. Every company must keep the minutes containing summary of all
proceedings of general and Board meeting in books. Minutes should be brief and factual. It
should be so accurate as not to give for misinterpretation. It should be free from superfluous
words.

The following particulars should be present in the minutes;

i. Nature of the meeting

ii. Date, time and place of the meeting

iii. Names of Chairman, directors, secretary and number of members attending

iv. Business of the meeting in the order set out in the agenda

v. Approval of the minutes of the last meeting

vi. Resolution passed in the meeting

vii. Chairman’s signature with date

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 COMMITTEE
Meaning
A group of people appointed for a specific function by a larger group and typically consisting
of members of that group. These persons are delegated to consider, investigate, take action on, or
report on some issues.

The Committee will also examine the feasibility of a mechanism through which the government
could settle cases involving violations under the Companies Act.

Requirement of establishing the Committee as per the Companies Act 2013

 For the ease of the Board of Directors
At times it is practically difficult to organize board meetings that suit the convenience and
other commitments of each director. By having smaller committees, the convenience and
commitments of the director also get addressed effectively.

 For Good Corporate governance

The Board in order to achieve the desired results has to concentrate more on selected team
members on particular business dealings and issues. For maintaining the Corporate social
responsibility, shareholders as well as stakeholder’s relationship, the Committee is
required for specialized companies.

Types of Committees as per the Companies Act, 2013

As per Companies Act 2013, Mandatory Committees required to be formed for the Companies are
as follows-

1. AUDIT COMMITTEE

Applicability of the Audit Committee

 Every listed Company

 Every other Public company-

 Having Paid up capital of Rs.100 crores or more; or

 Which have, in aggregate, outstanding loans or borrowings or debentures or

deposits exceeding Rs.50 Crores.
Composition of the Audit Committee

The Audit Committee shall comprise of

 A minimum of 3 directors with a majority of directors being Independent Directors.

 Additionally, the members of the Audit Committee shall be a person of integrity and with
an ability to understand the financial statement.

Function performed by the Audit Committee

1. To give recommendation for the appointment, remuneration, and terms of appointment of
the auditor of the company.

2. At the Annual General Meeting, Chairman of the Audit Committee shall be present to
answer shareholder queries.

3. While considering the Auditor’s report, the Auditor of a company and the KMP (Key
Managerial Personnel) shall have a right to heard in the meeting of the audit committee but
shall not have the right to vote.

4. To establish a Vigil Mechanism Policy: Every listed company and a company which has-

5. Accepted deposits from the public; –

6. The company has borrowed money from Bank and PFI’s in excess of Rs. 50 crores

2. NOMINATION AND REMUNERATION COMMITTEE

Applicability of the Nomination and Remuneration Committee

 Every listed Company 

 Every other Public company- 

 Having Paid up capital of Rs.100 crores or more; or

 Which have, in aggregate, outstanding loans or borrowings or debentures or

deposits exceeding Rs.50 Crores.

Composition of the Nomination and Remuneration Committee

 The Nomination and Remuneration Committee shall comprise of 3 or more non-executive

directors, out of it more than half the directors shall be an Independent director. 
  The chairman of the company can be appointed as a member of the Nomination and
Remuneration Committee but shall not chair the committee. 

Functions performed by the Nomination and Remuneration Committee

 Identify the person who is qualified to be a director and can be appointed in the senior
management of the company in accordance with the criteria laid down by the Board of the
director.

 Can recommends to the board, the appointment and removal of the person

 Shall specify the approach for the effective mechanism of the company

 Can evaluate the performance of the Board and The Individual Director.

3. Stake-holder Relationship Committee

Applicability of the Stake-holder Relationship Committee

A company having more than 1000 Members, Debenture Holders, Deposit Holder or Security
Holders are required to constitute a Stake-holder Committee.

Composition of the Stake-holder Relationship Committee

 Constitute a chairperson who shall be a non-executive director and 

 Other members as may be recommended by the Board 

Functions performed by the Stakeholder relationship Committee

 Transfer/transmission of shares. 

 Split-up/sub-division and consolidation of shares.

 Issue of new and duplicate share certificates. 

 Registration of Power of Attorneys, Probates, Letter of transmission or other documents 

 Consider and resolve the stakeholder’s grievances. 

4. CSR (CORPORATE SOCIAL RESPONSIBILITY)COMMITTEE

Purposes, Resources and General Considerations of CSR Committee

The Corporate Social Responsibility Committee (the "Committee") is appointed by the Board of
Directors (the "Board") to promote a culture that emphasizes and sets high standards for corporate
social responsibility and reviews corporate performance against those standards.

The Committee will consider the impact of the Corporation’s businesses, operations and programs
from a social responsibility perspective, taking into account the interests of shareholders, clients,
employees, communities and regulators.

Composition, Meetings and Procedures of CSR Committee

 The Committee will consist of 3 or more Directors, each of whom shall have been
determined to be independent in accordance with the Corporation's Corporate Governance
Guidelines. Committee members and the Committee Chairman will be appointed
annually by the Board on the recommendation of the Corporate Governance and Nominating
Committee and serve at the pleasure of the Board.

 The Committee may form subcommittees for any purpose and may delegate to such
subcommittees or to members of the Corporation's management such powers and authority
as it deems appropriate.

 The Committee shall meet as frequently as necessary to fulfil its duties and responsibilities,
but not less than 3 times per year.

 A meeting of the Committee may be called by its Chairman or any two members.

 Minutes of its meetings will be approved by the Committee and maintained by the
Corporation on behalf of the Committee. The Committee will report its activities to the
Board.

Responsibilities and Duties of CSR Committee

The Committee shall provide oversight of the Corporation's operations and programs regarding:

 employee community involvement

 public policy, advocacy, and political contributions

 environmental management and corporate social responsibility of suppliers

  human rights, as reflected in the Corporation’s policies and actions toward employees,

suppliers, clients and communities

 Corporation’s operations and initiatives that can create a positive or negative impact from a
social responsibility perspective. 

RESOLUTION
When a proposal place before the meeting is passed by the meeting, it becomes a
resolution. A resolution thus reflects the decision of the majority. In other words, the
decisions of the company are made by resolutions of its members passed at meetings of
members. A proposal and accepted by the members becomes resolution.

KINDS OF RESOLUTION

1. ORDINARY RESOLUTION
Any resolution passed by a simple majority is an ordinary resolution. Simple
majority means that 51 percent or more of the votes have been cast in favour of the
resolution.

When ordinary resolution is necessary?

a) Adoption of audited accounts, director’s report and auditor’s report

b) Appointment of auditors

c) Election of directors in place of those retiring

d) Declaration of dividend

e) Issuing shares at a discount

f) Removing a director before the expiry of his term

g) Appointing a director in the place of removed director

2. SPECIAL RESOLUTION
Special resolution is one which is required for transacting any special business. It
has to be passed by a three-fourths majority. In other words, the votes cast in favour of the
resolution must exceed three times the votes cast against it.

The notice calling the meeting should specify the intention to pass the resolution as
a special resolution. Notice must be given at least 21 days before the date of the meeting.

When special resolution is required?

a) Altering the objects clause of the Memorandum

b) Changing the place of the registered office from one State to another

c) Altering the Articles of Association

d) Reducing the Share Capital

e) Making loans to other companies under the same management

f) Paying interest out of capital in certain cases

g) Voluntary winding up of the company

3. RESOLUTION REQUIRING SPECIAL NOTICE

This type of resolution does not belong to a separate category. However, the mover
of the proposed resolution must give a special notice of 14 days to the company. On receipt
of this resolution, the company in turn has to give notice to the members at least 7 days
before the date of the meeting. Where it is not practicable, it can publish it in a newspaper.

Items requiring special notice

a) Appointing an auditor other than a retiring auditor

b) Passing a resolution that a retiring auditor should not be appointed

c) Removing a director before the expiry of his term

d) Appointing a director in place of the removed director

VOTING AND POLL VOTING

Voting means expressing one’s statement either for or against a proposed resolution,
called motion. In a company meeting voting can be by way of acclamation of
 voice, show of hands and poll.

1. VOTING BY ACCLAMATION OF VOICE

Those favouring the motion are requested to say ‘yes’ or those who are against it are
requested to say ‘no’. The intention of the members is ascertained by the volume of sound.

2. VOTING BY SHOW OF HANDS

Members favouring a resolution are asked to raise their hands and the number is
counted. Similar procedure is adopted to count the number of members who are against it.
Thus the resolution is declared passed or lost.

3. VOTING BY POLL
en dissatisfied with the result of voting by show of hands, a poll may be demanded.
Here each member records his vote on a voting card for or against the resolution. The voting
rights of a member are in proportion to his share of the paid up equity capital of the company.
Either the chairman on his own motion or on demand by prescribed number of members
present in person or by proxies can order poll. Proxy is allowed to vote in a poll.

References
1. P.M.S.Abdul Gaffoor and S. Thothadri, Company Law, Vijay Nichole Imprints Private
Limited, 2e(2016).
2. V.Balachandran and S. Thothadri, Legal Aspects of Business, Tata Mc Graw Hill
Education Private Limited, (2012).
3. P.Saravanavel S.Sumathi, Legal Systems in Business, Himalaya Publishing
House,(2011).

Question Bank

PART – A
1.Recall the meaning of Meeting
2.Memorize the requisites of a valid meeting.
3.List the kinds of meetings.
4.Explain proxy.
5.List the four contents of statutory meetings.
6.Underline the meaning of quorum.
7.Discuss about minutes of meeting.
8.Tell about agenda of meeting.
9.Reiterate when ordinary resolution is necessary.
10.Express the ways of voting in company

PART – B

1.Categorize the different types of meetings

2.Explain statutory meeting and statutory report with its contents.
3.Review the need and objective of Annual general meeting.
4.Discuss about Extra-ordinary General Meeting, Meeting of BOD and Committee of Directors.
 5.Express the applicability, composition, functions of Audit committee.
6.Report on applicability, composition, functions of Nomination and Remuneration committee
7.Review on Corporate Social Responsibility Committee.
8.Inspect the applicability, composition, functions of Stake-holder's relationship committee.
9.Classify different kinds of resolution passed in a company.
10.Summarize other aspects of meeting such as quorum, proxy, agenda, minutes and notice of
meeting.

References
4. P.M.S.Abdul Gaffoor and S. Thothadri, Company Law, Vijay Nichole Imprints Private
Limited, 2e(2016).
5. V.Balachandran and S. Thothadri, Legal Aspects of Business, Tata Mc Graw Hill
Education Private Limited, (2012).
6. P.Saravanavel S.Sumathi, Legal Systems in Business, Himalaya Publishing
House,(2011).