As per Section 96 of the Companies Act, 2013 (Hereinafter referred to as the ‘said act’), every company is required to call at least one meeting of its shareholders every year, known as the ‘Annual General Meeting’ (AGM). There shall be not more than 15 months gap between two AGM and the first AGM must be held within 9 months rom the date of closing of the first financial year of the company. In TV Mathew v. Nadukara Agro Processing Co Ltd, (2002)108 Comp Cas 130 (Ker), it was held that, “A failure in deferment of the first AGM would invite consequences under the Act.” As per section 96(1)(c) of the said Act, the Registrar has the power to extend the AGM for a period of 3 month, on account of special reasons. As per Section 98 of the said act, all other meetings except the AGM are known as ‘Extra Ordinary General Meeting’ (EGM).
PROCEDURE FOR CONDUCT OF MEETING
1. Before Meeting:
- Notice of Meeting (Section 101)
- Explanatory Statement (Section 102)
2. During Meeting:
- Quorum for Meeting (Section 103)
- Chairman of Meeting (Section 104)
- Proxies (Section 105)
- Voting (Section 106-110)
- Resolution (Section 111,114-117)
3. Post- Meeting:
- Minutes of Meeting (Section 118-119)
- Maintenance & Inspection of Documents (Section 120)
As per Section 101(1) of the said act, general meeting of a company can be called by giving not less than 21 days’ notice either in writing or through electronic mode in such manner as may be prescribed. If the notice is sent through post, then service of notice shall be deemed to have been affected in the case of notice of meeting on the expiry of 48 hours since the posting of the same.
As per Section 103 of the said act, Quorum is the minimum no. of members required to be present at a general meeting of the company to validly transact any business. That being said, minimum member to form a quorum in case of Private Company is 2 and Public is 5. As per sub-clause 3 of Section 103, if the quorum is not present within half an hour from the time appointed for holding a meeting of the company, the meeting shall stand adjourned to the same day in the next week at the same time and place.
As pe Section 104, one of the essentials of a valid meeting is that it must have a presiding officer endowed with authority to conduct its affairs in an orderly fashion. If the articles of association of a company do not contain any provision for the appointment of chairman, such appointments shall be made by the members personally present at the meeting who shall elect one of themselves to be the chairman thereof on a show of hands. If a poll is demanded on the election of the Chairman, it shall be taken immediately. If some other person is elected as a result of poll, he shall be the Chairman for the rest of the meeting.
PROXY
As per Section 105 of the said act, proxy means the agent appointed by the member of a company to attend and vote on his behalf at a meeting of members. In the case of a company having a share capital every member of the company who is entitled to attend and vote at the meeting can appoint a proxy. In the case of a company not having a share capital, this right is available only if the articles make a specific provision for it. A proxy need not to be member of the company. A person can act as proxy on behalf of members not exceeding 50 and holding in the aggregate not more than ten percent of the total share capital of the company carrying voting rights. A member holding more than ten percent, of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as proxy for any other person or shareholder.
VOTING
As per Section 106 of the Act, a company shall not prohibit any member from exercising his voting right on any ground except:
1. Any calls or other sums presently payable by him have not been paid, or
2. In regard to which the company has exercised any right of lien.
According to Section 107, the method of voting by show of hands shall be adopted first for deciding the fate of motion. It may be noted that proxies are not allowed to vote on a show of hands. As per Section 108, e-voting has been introduced. The expressions “voting by electronic means” or “electronic voting system” means a ‘secured system’ based process of display of electronic ballots, recording of votes of the members and the number of votes polled in favour or against, such that the entire voting exercised by way of electronic means gets registered and counted in an electronic registry in a centralized server with adequate ‘cyber security. A poll can be ordered at any time before or after the declaration of the result on the voting of any resolution by show of hands, as per Section 109.
The AGM of some companies are held in remote places, where the registered offices of such companies are situated. This makes it inconvenient for the members to attend in large number. Further, members do not evince much interest in attending EGM. The postal ballot brings the voting at the doorsteps of members. Hence as per Section 110 of the Act, resolution can be passed by Postal Ballot, that is voting by post or through any electronic mode.
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