Company Meetings: Statutory, Annual general meeting, Extraordinary Meeting

Meeting of the Legislature

Company Meetings: Statutory, Annual general meeting, Extraordinary Meeting: The first gathering of a public company’s shareholders is known as the Statutory Meeting. It must be convened within a period of neither less than one month nor more than six months from the day the company is authorised to begin operations. It occurs just once throughout a company’s lifespan. A private corporation and a limited-by-guarantee company without a share capital are exempt from holding such a meeting.

The goal of the statutory meeting and its statutory report is to provide all vital details about the new company to the firm’s shareholders, such as how many shares have been taken up, how much money has been received, and so on. This also gives the meeting’s shareholders a chance to debate the company’s overall position, management, and future.

Every member of the corporation must receive a report called the “statutory report” from the Board of Directors at least 21 days before the meeting. For the benefit of the shareholders, this report covers all required information pertaining to the company’s formational features.

Company Meetings: Statutory, Annual general meeting, Extraordinary Meeting

Statutory Report Contents

1. The total number of shares awarded, differentiating those paid up in cash and those paid up in kind, the degree to which they are partially paid up, the consideration for which they were assigned, and the total amount received in cash;
2. An summary of receipts and payments organised by headings up to a date within seven days of the report’s due date
3. An summary of the company’s preliminary costs estimated.
4. The names, residences, and professions of the company’s managing director, director, secretary, and auditors
5. The specifics of any contract that will be presented to the meeting for approval, as well as any modifications or suggested modifications
6. The degree to which underwriting contracts have not been fulfilled, if any, and the reasons behind this
7. If there are any arrears on calls from directors, managing director, or manager, they must be paid
8. The details of any commission or brokerage paid, or to be paid, to any director, managing director, or management in connection with the issuance or sale of shares.

Meeting of the Annual General Meeting

An annual general meeting (AGM) is a gathering of stockholders or shareholders, business members, firms, and organisations once a year. Every financial year, everyone is required to attend the Annual General Meeting. AGM duties include evaluating corporate finances, approving audited accounts, elections, and discussing fiscal records from the previous year.

According to the Companies Act, every business must have an annual general meeting at least once a year. Between two AGMs, there cannot be a break of more than 15 months.

The first AGM of a business, on the other hand, may be convened at any time within 18 months after the firm’s establishment date. Members may learn about the company’s growth rate and prospects for development by attending annual general meetings.

An AGM reveals which actions contributed to the company’s success and which ones resulted in loss. It aids members and the board in making decisions on the future course of action. An AGM must take place during the working day.

If the government announces a public holiday on the day of the meeting, the members in attendance will regard it as a working day. The annual general meeting may be conducted at the company’s registered office.

Requirements for conducting an Annual General Meeting under the law

Before the meeting, all members must be given a 21-day notice period under the law. There is, however, one exception to this rule. The meeting might be convened sooner if all of the voting members agree. In addition, the notification must be accompanied by the following papers. The regulations that regulate annual general meetings are specified in the articles of association, business bylaws, and jurisdiction.

• A copy of the company’s annual accounts
• Director’s annual report on the company’s performance.
• Auditor’s report on the yearly accounts.

In the event of a member’s absence, proxies may be used. The proxy does not have to be a corporate employee. The proxy forms, on the other hand, must be presented to the corporation at least 48 hours before to the meeting.

Annual General Meeting Quorum

The quorum for an Annual General Meeting is as follows, unless the articles of incorporation specify otherwise.

• At least 5 members must be present in public corporations.
• Other companies: Within half an hour of the meeting’s start time, at least two members must be present.

At the Annual General Meeting, there were a number of issues that were discussed.

The following is a list of the types of business that are often conducted during an annual general meeting:

• The payment of a dividend to shareholders.
• Examining yearly financial statements
• The director’s report and the auditor’s report are discussed.
• Appointment of statutory auditors and determination of their compensation
• appointing new directors to take the place of departing directors

Extraordinary meeting

A gathering of shareholders that is not an Annual General Meeting (AGM) is known as an Extraordinary General Meeting (EGM) (an AGM). It is convened when a pressing problem concerning the firm or a crisis occurs, and it necessitates the participation of all top executives and the Board of Directors.

An EGM, as we all know, is conducted in the event of an emergency that demands the attention of senior executives and the Board of Directors. Members, shareholders, and executives must be informed about the meeting’s goal so that they may prepare their vital contribution and then decide on a plan of action as a group.

Who has the authority to call an EGM?

An extraordinary general meeting may be called by a company’s members/shareholders. Only shareholders with a sufficient interest in the firm are permitted to request for an EGM. The Companies Act of 2013 lists them as follows.

Members holding not less than one-tenth of the company’s paid-up capital that have voting rights in that matter as of the date of depositing the requisition; in the case of a company with a share capital, members holding not less than one-tenth of the company’s paid-up capital that have voting rights in that matter as of the date of depositing the requisition;

Members possessing not less than one-tenth of the entire voting power in that matter as of the date of deposit of the requisition in the event of a firm without a share capital.

The Board has summoned an EGM. The Board has 21 days from the date of receipt of a valid demand to convene an EGM. After that, the EGM must be convened within 45 days of the EGM being summoned.

EGM called by the requisitionists: If the Board does not convene an EGM, it may be called by the requisitionists themselves within three months of the requisition being submitted. If the EGM is held within the prescribed three-month term, it may be postponed to any day within the three-month period.

The Components of a Valid Requisition

• Indicate the topic for which the meeting has been convened.
• Requisitionists’ signatures
• It must be placed at the registered office of the firm.

The requirements for hosting an EGM are as follows:

The members must be given a 21-day notice period. There is, however, one exception to this rule. The EGM may be convened with less notice if 95 percent of the voting members agree.

EGM Requires a Quorum

The following number of members are necessary for a quorum, unless the company’s Articles indicate otherwise.

• In the case of a public business, there must be a minimum of five (5) members directly present.
• Any other firm must have two (2) members directly present.