MEETINGS UNDER COMPANIES ACT 2013

By: Amrita Sachidanandan, Advocate

INTRODUCTION

Meetings are an integral part of corporate governance and play a vital role in the functioning of companies. The Companies Act 2013, which replaced the Companies Act 1956 in India, has laid down comprehensive provisions regarding various types of meetings that companies must hold. These meetings serve as platforms for decision-making, communication, and transparency within the organization. This article will delve into the different types of meetings mandated by the Companies Act 2013 and their significance in corporate governance.

Types of Meetings

Under the Companies Act 2013, several types of meetings are specified, each serving distinct purposes:

Board Meetings (Section 173): Board meetings are essential for the management and administration of the company. They must be held at least once every three months, with a minimum of four meetings in a calendar year. The quorum for a board meeting typically includes one-third of the total directors or two directors, whichever is higher. These meetings are crucial for strategic decision-making, financial planning, and overall management of the company.
General Meetings (Section 96): General meetings are gatherings of the company’s shareholders. These include Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs). An AGM must be held once a year, while EGMs are called for specific urgent matters. AGMs are important for discussing financial statements, appointing auditors, and approving dividend distribution.
Annual General Meeting (Section 96): The AGM is perhaps the most significant meeting for shareholders. It provides a platform for shareholders to discuss the company’s performance, approve financial statements, declare dividends, and appoint or reappoint directors. The quorum for an AGM is typically a minimum of 5 members present in person.
Extraordinary General Meeting (Section 100): EGMs are convened for urgent matters that cannot wait until the next AGM. These can include changes in the company’s constitution, modification of the objects clause, and alteration of share capital. The notice period for an EGM is shorter compared to an AGM, and the quorum is typically higher.
Meeting of Creditors (Section 230): In cases of mergers, amalgamations, or reconstruction, the Companies Act mandates meetings of creditors. These meetings allow creditors to express their views on the proposed agenda and vote on it. The decision at such meetings can significantly impact the company’s future.
Meetings of Debenture Holders (Section 71): Companies that issue debentures must hold meetings of debenture holders. These meetings are essential for discussing matters related to the debentures, such as interest rates, redemption, and security.

General provisions to know about conducting valid company meetings

Authority to convene meetings
A meeting must be called by the board of directors of the company in order to be valid. A resolution must be adopted by the board in order to decide to call a general meeting and give notice of it.
Notice
A proper notice must be given by the board of directors in order for a meeting to be conducted lawfully. This means that such a notice must be as per the provisions of the 2013 Companies Act. Additionally, notice must be sent to all members who are qualified to attend the meeting and cast votes, mentioning in detail the meeting’s location, date, time, and a summary of the business to be discussed must all be included.
Quorum
A quorum is defined as the minimal number of participants needed to hold a given meeting in accordance with the Companies Act 2013 and its rules. Any business made during a meeting that doesn’t have a quorum is regarded to be invalid. The main object of having a quorum is to avoid taking decisions by a small minority of members that may not be accepted by the vast majority. Every meeting has a different quorum requirement.
Agenda
Agenda can be viewed as the list of matters to be discussed during any meeting. An agenda is crucial for conducting a business meeting in a structured manner and according to a planned order. Every member who is qualified to attend a meeting gets the agenda as well as a notice of the meeting. The agenda must be followed exactly, and the order of the agenda discussed in the meeting can only be changed with the appropriate approval of the members present in the Meeting.
Minutes
The minutes of the meetings contain a just and accurate summary of the proceedings of the meeting. The Minutes must be prepared and signed within 30 days of the conclusion of the meeting. Further, the Minutes books must be kept at the Registered Office of the company or any place where the board of directors has given their approval.
Proxy
A proxy is a person appointed by the shareholder of a company to represent him at a general meeting of the company. Further, it also refers to the process through which such an individual is named and permitted to attend the meeting.
Resolutions
Business transactions in company meetings are carried out in the form of resolutions. There are two kinds of resolutions, namely:

Ordinary resolution, and
Special resolution.

CONCLUSION

Meetings under the Companies Act 2013 play a pivotal role in shaping the corporate landscape in India. They promote transparency, accountability, and stakeholder participation, which are essential for the healthy functioning of companies. Adherence to the provisions of the Companies Act 2013 regarding meetings is not just a legal obligation but also a crucial step towards building a robust and ethical corporate environment. Companies that value effective meetings are better positioned to navigate challenges, make informed decisions, and foster trust among their stakeholders.