In this Article, we are putting forth the major highlights forÂ Law relating to meetings and minutes in the new companiesÂ bill 2013 :
ANNUAL GENERAL MEETING:
As perÂ section 96 of the new Act, every company other than a One person company shall in each year hold in addition to any other meeting, a general meeting which is called as its annual general meeting. The first annual general meeting of a company should be held within a period of 9 months from the date of closing of first financial year and in other cases, within a period of 6 months from the date of closing of the financial year. However, the Registrar has the power to extend the time within which any annual general meeting shall be held, within a period of not exceeding three months. This condition does not apply for First AGM.
Every annual general meeting shall be called during the business hours, that is, between 9 AM and 6 PM on any day that is not a National Holiday. This means that the Annual General Meeting can be held even on a Sunday.
Directors can attend and participate through video conferencing or other audio visual means in the board meetings. This nullifies the need of travelling which in turn has proved to be a boon for the foreign directors.
Central Government, vide its notification will now entitle a class of companies to conduct voting electronically.
The minimum ceiling of quorum (i.e. 5) for public companies with respect to shareholderâ€™s meetings has been revoked and replaced with a much more flexible norm wherein now it will be decided by the number of members of the company.
GENERAL PROVISIONS RELATING TO MEETINGS:
Notice of the Meeting: As per Section 101 of the new Act, a general meeting of a company may be called by giving not less than 21 days clear notice, either through electronic or writing mode. However, a shorter notice can be given in cases where consent by not less than 95% of the members. The place, date, day and the hour of the meeting shall be specified in the notice and also the statement of business to be conducted.
Notice of every meeting shall be given to every member of the Company, legal representative of any deceased member, the Auditor of the Company, Every director of the Company.
According to section 102 of the new Act, a statement setting out the following material facts concerning each item of special business to be transacted at a general meeting, shall be annexed to the notice calling such meeting.
|The nature of concern or interest, financial or otherwise, if any in respect of each item of (i) every director and manager, if any, (ii) every other key managerial personnel and relatives of the persons mentioned in (i) & (ii).
|Any other information and facts that may enable members to understand the meaning, scope and implication of the items of business and to take decision thereon.
In the case of an annual general meeting, all business to be transacted thereat shall be deemed special, other than:
|the consideration of financial statements and reports of the Board of directors and auditors,
|the declaration of any dividend,
|the appointment of directors in place of those retiring,
|the appointment of, and the fixing of the remuneration of the auditors.
In the case of any other meeting all business shall be deemed to be special.
The following information should be provided in the Statement:-
|If any item of special business to be transacted at a meeting of the company relates to or affects any other company.
|The extent of shareholding interest in that other company of every promoter, director, manager, if any, and of every other key managerial personnel of the first mentioned company be set out in the statement.
|The above information need to be set out in case the extent of such shareholding interest is not less than 2% of the paid-up share capital of the company.
|If any item of business refers to any document, which is to be considered at the meeting, then the time and place where such document can be inspected should be mentioned in the statement.
The Companies Act, 2013 is forward looking in its approach which empowers the Central Government to make rules. As per section 469, contravention of any of the rules shall be punishable with fine. The rules are yet to be notified by the Central Government. While the new Act aims to systematize the entire business scenario, some provisions of the same are hard to comply with and are cumbersome. Having said that, the contributions of the Act in offering considerable flexibilities
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