Sunday 12 October 2014

Companies Act 1956: Common provisions regarding all the General Meetings

According to Section 170 all the provisions of Section 171 to Section 195 are applicable to all General meetings.

Section 171 and Section 172: Notice of Meeting:
  • The notice of meeting must be given as per section 171 and Section172 of the companies act.
  • Under Sec 171 company must give a 21 days prior notice to the shareholders and directors.
  • In calculating the 21 days notice the date of notice and the date of meeting both are left.
  • 2 days are left for postal time of notice.
  • If the company wants to give a notice shorter than 21 prior days then for AGM the approval of all members is necessary and for EGM the approval of 95% is necessary.
  • Under Section172 it is compulsory that the notice is given to all the members of the company, however if the notice is not given to even one member then the meeting will be invalid.
  • If the notice missed accidently any one member then meeting will be valid.
  • Notice is given to auditors of the company also.

Extension of time period of meeting:
It is necessary that the meeting should be held within the proper time period nut if it is not possible to hold the meeting within the time limit then ROC may extend the time. The normal extension given by ROC is three months at a time.
When the ROC extends the time then the meeting must be held within the extended time. It is also possible that the company starts the meeting and the same is adjourned after which meeting will be continued later on.

Quorum of Meeting:
Quorum is the minimum number of members that should be present to start the meeting. If the quorum is not present then the meeting cannot start. It is not compulsory that the quorum should be present throughout the meeting, the meeting can continue even if the quorum ceases to exist during meeting.
For private companies the minimum quorum is 2 and for public companies it is 5.
According to section 164 if the quorum is not present at the start of meeting until half an hour then the meeting is adjourned to next week (same place, same time). However if the quorum is not present in the next week also then even one member present will be considered as quorum.
The articles of a company may fix a higher quorum but cannot fix a lesser one.

Proxy: Section 176
  • Every member of a company has a right to appoint proxy.
  • Proxy is the representative of member for whom he will attend the meeting.
  • A proxy is a person who will attend the meeting on behalf of the shareholder and he will cast the vote of the member.
  • A proxy may or may not be the member of the company hence any member may appoint some other person as proxy.
  • A proxy is appointed by a proxy letter (proxy deed) and this proxy letter must be deposited with the company at least 48 hours before the meeting.
  • A member may cancel one proxy and appoint another.
  • A member may decide to attend meeting himself even after appointing the proxy.

Chairman: Sec 175
  • Chairman is a person who has been appointed as chairman to conduct the meetings of a company.
  • A chairman may be named in the articles and such chairman will conduct the meeting.
  • The chairman may be a member of company or he may be a director.
  • A chairman has all the powers to conduct the meeting of a company.
  • A chairman may expel any member from the meeting if the member disturbs the conduct of meeting.
  • A chairman may be elected by the meeting itself, if the same is not named in the articles. For this purpose the BOD will appoint any person as chairman and such person will help in the appointment of regular chairman of meeting.
  • A chairman decides the manner in which meeting is to be conducted.

Polling and Voting:
  • Decisions in any meeting are taken by way of resolutions.
  • For taking decisions voting is done.
  • Under section 177 voting is done by show of hands and chairman will decide the result under section178.
  • Under section 179 any shareholder having 5% OR more voting power may request the chairman to conduct voting by poling.
  • The chairman must start the polling within 50 hours of the request.
  • When the polling is done then the chairman will appoint the scrutinizers and the scrutinizers will help the chairman in voting.
  • One of the scrutinizers must be the member of company.
  • After counting the votes chairman will declare the results.
  • Section 184 deals the scrutinizers and Sec 185 deals with the declaration of result.
  • Under section 183 the member has right to cast a vote in any manner in which he desires.

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