Subject BUSINESS LAW

Procedures & Requisites of a Valid Meeting

Ankit Majethia Roll No. 33

1. To be Convened by Board
Every general meeting is to be convened by giving not less than 21 days prior notice in writing. The gap should be 21 clear days. The day of service of notice of the general meeting and the day of the meeting have to be excluded while counting 21 days prior of notice.

2. Notice (Sec. 171)

A general meeting of the company is convened by giving not less than 21 days prior notice in writing. In case of notice of a general meeting sent to a member by post, service shall be deemed to have been effected at the expiry of 48 hours after it is posted. Requirement of length of notice is directory only and not mandatory.

Notice Continued
A General meeting may be called after giving shorter notice, if consent is given in the following exceptions: i) In the case of annual general meeting, by all members entitled to vote thereat; and ii) In the case of any other meeting, in case of company having a share capital, by members of the company holding not less than 95% of such part of the paid up share capital, by members holding not less than 95% of the total voting power at the meeting. Such consent may be obtained either or after the meeting.
Contents of notice [Sec. 172 (1)] : Every notice of a meeting of a company shall specify the place, the day and time of the meeting. It shall contain a statement of the business to be transacted thereat.

Notice Continued
Service of Notice [Sec. 172 (2)] : Notice of every meeting of the company shall be given to i) Every member of the company; ii) To the persons entitled to a share in consequence of the death or insolvency of the member; iii) To the auditor or auditors of the company.
It may be served either personally or by sending it by post to him at his registered address, or by advertising. If the company has forgotten to give notice to any member or any member has not received the notice of the meeting shall not invalidate the proceedings of the meeting.

3. Explanatory Statement [Sec. 172 (2)]

If any item of business is to be transacted at the meeting is special, then

there shall be an annexure attached to the notice which includes all the facts of that business, particularly including the nature of concern or interest, if there is any of the director or the manager. If the extents of interest is more than 21% of the other company of which the special business if to be transacted, then the extent of shareholding of the director or manager is also to be mentioned in the notice of the meeting. In one of the case, in the decision given by the court, it has been mentioned that the requirement of Sec. 173 is mandatory and not complying to which would make the transacted business null and void. Therefore, the management must ensure that all the facts pertaining to the special business must be particularly mentioned in the notice given to the shareholders. However, in another the decision given by the court, the court also mentions that if the shareholder is aware of the facts, he cannot complain of insufficiency or irregularity of the facts in it.

4. Business [Sec. 173 (1)]

There are 2 types of business that can be transacted at the Meeting, Viz:
Ordinary Business Special Business

Ordinary Business The consideration of the accounts, balance sheet and report of the Board of Directors and auditors. The declaration of dividend. The appointment of new directors in the place of retiring directors. The appointment of new auditors and fixing their remuneration. Special Business Any business other than the ordinary business transacted at the annual general meeting or any business in any other meeting shall be termed as Special Business.

5. Quorum [Sec. 174]

5 Members personally present for a public company and 2 members for

any other company shall be the quorum for the meeting of the company, unless there is a larger number mentioned in the articles of association of the company. If the meeting is called upon the request of members and if the quorum is not present within half an hour from the time approved for holding the meeting of the company, the meeting shall stand dissolved. In any other case, the meeting shall be adjourned at the same day in the next week at the same time and place, or to such other day and at such other time and place as the board may decide. If at the adjourned meeting also the quorum is not present within half an hour of the decided time, then the present members shall act as a quorum. It should also be noted that the word meeting means a coming together of more than one person. In other words, if only 1 person is present at the reassembled or adjourned meeting, it will not continue as quorum and therefore that meeting will not be accepted as a valid meeting.

5. Quorum [Sec. 174] Continued

However, there are 2 exceptions: If all the preference shares of a company are held by only one person, then the meeting held by the preference shareholders will be held valid. When the Company Law Board or Central Government or Court calls a meeting respectively it may direct that one member of the company present in person or by proxy shall be deemed to constitute a meeting. Once the quorum is present, subsequent departure of a member required for a meeting does not invalidate the proceedings at the meeting.

6. Chairman of the Meeting [Sec. 175]

The members personally present at the meeting shall elect one of them to

be the chairman by show of hands. If a poll is demanded on the election of the chairman, it shall be taken directly. The chairman elected on a show of hands shall exercise all the powers of the chairman. If some other person is elected chairman as a result of the poll, he shall be chairman for the rest of the meeting.
Chairman of the meeting conducts the proceedings at the meeting. Once a

meeting is called, no Chairman can adjourn the meeting at his own choice. The power of adjournment vests in the majority of those present at the meeting. If specifically empowered by the Articles of the company, Chairman of a meeting has a casting vote in a board Meetings and General Meetings.