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Meeting and Resolution – Types – Requisites

In corporate governance and other organizational contexts, meetings and resolutions are
fundamental processes through which decisions are made and recorded. Here's an overview of
the types and requisites of meetings and resolutions:

1. Meetings

Meetings are formal gatherings where members of an organization or company discuss and
decide on various matters. The types of meetings vary depending on the context and purpose:

Types of Meetings:

● Annual General Meeting (AGM):

o Purpose: The AGM is a yearly gathering of shareholders or members where they
review the company's performance, approve financial statements, elect directors,
and discuss other significant matters.
o Requisites: Must be held annually within a specified time frame. Proper notice
must be given to all members.
● Extraordinary General Meeting (EGM):
o Purpose: An EGM is called for urgent matters that cannot wait until the next
AGM. It addresses special business outside the ordinary course of the company's
operations.
o Requisites: Requires a specific notice period, and the agenda must be clearly
stated. It is usually convened by the board or at the request of a certain percentage
of shareholders.
● Board Meetings:
o Purpose: Meetings of the board of directors to make decisions on the
management and oversight of the company.
o Requisites: Must be held regularly as per the company’s bylaws or regulations.
Quorum and proper notice are essential.
● Committee Meetings:
o Purpose: Meetings of specific committees (e.g., audit committee, compensation
committee) to handle particular aspects of the organization's business.
o Requisites: Governed by the committee’s terms of reference. The committee
must have a quorum to conduct business.
● Class Meetings:
o Purpose: These are meetings of a particular class of shareholders (e.g., preference
shareholders) to discuss issues that specifically affect them.
o Requisites: Aimed at issues like changes to the rights attached to their shares.
Requires proper notice and quorum.

2. Resolutions
Resolutions are formal decisions made at meetings. They are usually proposed by one member
and seconded by another before being put to a vote. Resolutions vary depending on the level of
approval required and the type of decision being made.

Types of Resolutions:

● Ordinary Resolution:
o Purpose: Used for routine matters that require a simple majority of votes cast.
This is the most common type of resolution.
o Requisites: Passed by a simple majority (more than 50%) of the members present
and voting. Generally used for approving financial statements, electing directors,
etc.
● Special Resolution:
o Purpose: Required for significant matters that might alter the company’s
structure or operations, such as amending the articles of association.
o Requisites: Requires at least a 75% majority of the members present and voting.
Proper notice must be given, usually specifying that a special resolution is being
proposed.
● Unanimous Resolution:
o Purpose: Occasionally, a resolution might require the unanimous consent of all
members or directors. This is rare and usually for fundamental changes.
o Requisites: Every member entitled to vote must agree for the resolution to pass.
● Written Resolution:
o Purpose: Used in contexts where meetings are not required. The resolution is
circulated in writing and signed by the required number of members or directors.
o Requisites: Typically must be signed by all members (for unanimous written
resolutions) or a specified majority.
● Extraordinary Resolution:
o Purpose: Similar to a special resolution but might be used in specific situations,
such as winding up a company.
o Requisites: Typically requires a higher majority, such as 75%, and specific notice
requirements.

3. Requisites for Meetings and Resolutions

To ensure that meetings and resolutions are valid and enforceable, certain requisites must be met:

For Meetings:

● Notice: Proper notice must be given to all entitled members, specifying the date, time,
place, and agenda of the meeting.
● Quorum: The minimum number of members required to be present for the meeting to be
valid.
● Agenda: The topics to be discussed must be clearly stated in the notice.
● Minutes: A formal record of the proceedings and decisions made during the meeting
must be kept.
For Resolutions:

● Proper Notice: Members must be informed in advance if a particular type of resolution

(ordinary, special, etc.) will be proposed.
● Quorum: A sufficient number of members or directors must be present to pass the
resolution.
● Majority: The resolution must achieve the required level of support (e.g., simple
majority, 75% majority).
● Recording: The resolution must be documented in the minutes of the meeting or, in the
case of written resolutions, appropriately signed and filed.

Under the Companies Act, particularly in jurisdictions like India, the UK, and others influenced
by common law, Voting, Polling, Quorum, and Proxy are governed by specific legal
provisions. Here's an overview based on general principles found in these types of statutes:

1. Voting

Under the Companies Act, voting is the process by which shareholders or members express their
decisions on resolutions during meetings. The Companies Act provides guidelines on how voting
should be conducted, the rights of shareholders, and the various methods available.

Methods of Voting:

● Show of Hands:
o The default method for voting on resolutions during a meeting. Each member
present has one vote. The outcome is based on the majority of hands raised.
● Poll:
o A poll can be demanded if the result of a show of hands is disputed or for
decisions that require a precise count of votes. Voting rights during a poll are
typically proportional to the shares held by each member.
● Electronic Voting:
o The Companies Act may permit electronic voting, especially for listed companies,
to allow broader participation, including by those unable to attend physically.
● Postal Ballot:
o For certain decisions, the Companies Act may allow or require voting through a
postal ballot, especially in situations where gathering a meeting is impractical.
 2. Poll
A poll is a formal voting process that can be requested by shareholders or mandated by the
chairperson under the Companies Act.

Key Points:

● Demand for Poll:

o The Companies Act typically allows a poll to be demanded by the chairperson, a
certain number of members, or members holding a specified percentage of voting
rights. The precise thresholds for demanding a poll can vary based on the
jurisdiction or company’s articles of association.
● Procedure:
o Once a poll is demanded, the meeting is usually adjourned, and the poll is
conducted as per the prescribed rules. Votes are counted according to the number
of shares held, and the result is binding.

3. Quorum

Quorum refers to the minimum number of members or shareholders required to be present at a

meeting to conduct business legally.

Key Points:

● General Meeting (e.g., AGM, EGM):

o The Companies Act specifies the minimum quorum for meetings. Typically, this
may be two members personally present for private companies and a higher
number for public companies.
o If a quorum is not present within a stipulated time, the meeting may be adjourned
or dissolved according to the provisions of the Act or the company’s articles of
association.
● Board Meeting:
o A quorum for board meetings is usually a fixed number or a proportion of
directors, as specified in the company’s articles or the Companies Act. Often, this
is set at one-third of the total number of directors or two directors, whichever is
higher.

4. Proxy
A proxy allows a shareholder to appoint another person to attend and vote at a meeting on their
behalf.

Key Points:

● Right to Appoint a Proxy:

 oThe Companies Act grants shareholders the right to appoint a proxy to attend and
vote at meetings. The proxy need not be a shareholder unless the company's
articles specify otherwise.
● Notice and Documentation:
o Proxies must be appointed in writing, typically using a prescribed form, and
submitted to the company within a specific time frame before the meeting (often
48 hours before the meeting).
● Voting by Proxy:
o Proxies can vote on behalf of the shareholder in both a show of hands and a poll,
provided they are authorized to do so. The proxy's voting rights are equivalent to
those of the shareholder they represent.
● Restrictions:
o In some cases, the Companies Act or the company’s articles may restrict the
number of proxies one person can represent.

Summary

● Voting: The act of making decisions through shareholder participation, either by a show
of hands, poll, or other methods prescribed by the Companies Act.
● Poll: A method of voting that allows votes to be counted based on the number of shares
held.
● Quorum: The minimum number of members required for a meeting to be valid.
● Proxy: A person appointed by a shareholder to attend and vote at a meeting on their
behalf.

These provisions ensure that the decision-making process within companies is fair, transparent,
and in accordance with legal requirements. The exact rules can vary depending on the specific
Companies Act applicable in the jurisdiction where the company is incorporated.
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Resolution – Ordinary & Special

In corporate law, particularly under the Companies Act, resolutions are formal decisions made
by shareholders or the board of directors during meetings. There are two primary types of
resolutions: Ordinary Resolutions and Special Resolutions. Each type has distinct
requirements for passage and is used for different types of corporate decisions.

1. Ordinary Resolution

An Ordinary Resolution is the most common type of resolution used for routine business
decisions that do not fundamentally alter the company's structure or operations.

Key Features:

● Approval Requirement:
o An ordinary resolution is passed by a simple majority of votes cast by members
who are entitled to vote, either in person or by proxy. This means more than 50%
of the votes must be in favor of the resolution.
● Use Cases:
o Ordinary resolutions are typically used for:
▪ Approval of annual financial statements.
▪ Appointment or removal of directors and auditors.
▪ Declaration of dividends.
▪ Routine changes that do not require special resolution status.
● Notice:
o Standard notice requirements apply, generally specifying that the resolution is an
ordinary one.
● Flexibility:
o Ordinary resolutions are easier to pass due to the lower threshold, making them
suitable for regular business matters.

2. Special Resolution

A Special Resolution is required for more significant decisions that can have a lasting impact on
the company’s structure, governance, or operations.

Key Features:

● Approval Requirement:
o A special resolution must be passed by a higher threshold, usually requiring at
least 75% of the votes cast by members who are entitled to vote, either in person
or by proxy, to be in favor.
● Use Cases:
 o Special resolutions are necessary for decisions such as:
▪ Amendments to the company’s articles of association.
▪ Change of the company’s name.
▪ Reduction of share capital.
▪ Voluntary winding up of the company.
▪ Any other matter requiring a special resolution as per the company’s
articles or the Companies Act.
● Notice:
o The notice calling the meeting must clearly state the intention to propose a special
resolution. This notice period is often longer than that required for an ordinary
resolution, and the exact wording of the special resolution must be included in the
notice.
● Formality:
o Due to their significant nature, special resolutions are more formal and require
greater scrutiny during the decision-making process.

Comparison: Ordinary vs. Special Resolution

Feature Ordinary Resolution Special Resolution

Approval Requirement Simple majority (>50%) Higher majority (≥75%)
Use Cases Routine business Major changes or significant decisions
Notice Requirement Standard notice Longer, with specific wording
Formality Less formal More formal and scrutinized

Summary

● Ordinary Resolutions are used for regular business matters and require a simple
majority to pass.
● Special Resolutions are used for more critical decisions, requiring a higher threshold of
approval (typically 75%).

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 Qualification, disqualification, appointment, and removal of auditors

Under the Companies Act, auditors are essential in maintaining the integrity of a company’s
financial statements by conducting independent audits. The Companies Act outlines specific
rules regarding the qualification, disqualification, appointment, and removal of auditors.
Here’s a detailed breakdown:

1. Qualification of Auditors

To be eligible for appointment as an auditor of a company, a person must meet specific

qualifications as prescribed under the Companies Act.

Key Qualifications:

● Chartered Accountant:
o The auditor must be a Chartered Accountant (CA) holding a valid certificate of
practice. In the case of an audit firm, the majority of partners must be practicing
Chartered Accountants.
● Experience and Knowledge:
o The individual or firm should have sufficient experience and knowledge of
auditing practices, particularly in the industry in which the company operates.

2. Disqualification of Auditors

Certain individuals or entities are disqualified from being appointed as auditors under the
Companies Act to ensure independence and prevent conflicts of interest.

Key Disqualifications:

● Body Corporate:
o A body corporate, except a limited liability partnership (LLP) where all partners
are Chartered Accountants, cannot be appointed as an auditor.
● Employee of the Company:
o An individual who is an officer or employee of the company cannot be appointed
as an auditor.
● Persons with Business Relationships:
o A person or a firm having a significant business relationship with the company, its
holding, subsidiary, or associate company, cannot be appointed as an auditor.
● Indebtedness:
o A person who is indebted to the company, or has given a guarantee or provided
any security in connection with the indebtedness of any third person to the
company, cannot be appointed as an auditor.
● Holding Securities:
o A person or their relative or partner holding any security or interest in the
company or its subsidiaries/associates disqualifies the person from being
appointed as an auditor.
 ● Relative of a Director or Key Managerial Personnel:
o The auditor cannot be a relative of a director or key managerial personnel (KMP)
of the company.
● Conviction for Fraud:
o A person who has been convicted by a court of an offense involving fraud and a
period of ten years has not elapsed from the date of such conviction is disqualified
from being appointed as an auditor.

3. Appointment of Auditors

The Companies Act outlines specific procedures for the appointment of auditors to ensure
transparency and accountability.

Key Points on Appointment:

● Initial Appointment:
o The first auditor of a company, other than a government company, is typically
appointed by the Board of Directors within 30 days of the company’s
incorporation. If the Board fails to do so, the shareholders must appoint the
auditor within 90 days at an Extraordinary General Meeting (EGM).
● Subsequent Appointments:
o Subsequent auditors are appointed by the shareholders at the Annual General
Meeting (AGM). The appointment is usually for a term of five years, subject to
ratification by members at each AGM.
● Audit Committee:
o In companies with an Audit Committee, the committee recommends the
appointment of the auditor to the Board.
● Consent and Certificate:
o The auditor must provide a written consent to the appointment and a certificate
confirming that the appointment, if made, would be in accordance with the
prescribed conditions.
● Rotation of Auditors:
o For certain classes of companies, the Companies Act mandates the rotation of
auditors. The same individual cannot be reappointed as an auditor for more than
one term of five consecutive years, and an audit firm cannot be reappointed for
more than two terms of five consecutive years.

4. Removal of Auditors

The Companies Act provides for the removal of auditors before the expiry of their term, but this
process must follow strict procedures to ensure fairness.

Key Points on Removal:

● Special Resolution:
 oThe removal of an auditor before the expiry of their term requires the company to
pass a special resolution at a general meeting. The company must also obtain prior
approval from the Central Government.
● Opportunity to be Heard:
o The auditor being removed must be given a reasonable opportunity to be heard
before any resolution is passed.
● Resignation of Auditor:
o If an auditor wishes to resign, they must submit a resignation letter to the
company and file a statement with the Registrar of Companies (RoC) indicating
the reasons for resignation within 30 days of resignation.
● Casual Vacancy:
o In case of the resignation of an auditor or any other vacancy, the Board of
Directors can fill the vacancy within 30 days. However, if the vacancy is due to a
resignation, it must be approved by the shareholders in a general meeting within
three months of the Board's recommendation.

Summary

● Qualification: The auditor must be a Chartered Accountant with a valid certificate of

practice.
● Disqualification: Specific individuals and entities are disqualified from being auditors to
prevent conflicts of interest.
● Appointment: Auditors are appointed by the Board initially and subsequently by
shareholders at the AGM, with provisions for rotation.
● Removal: Auditors can be removed by a special resolution with government approval,
and they have the right to be heard before removal.