COMPANY LAW Presented by:Arslan Asif

UNIVERSITY OF LAHORELahore school of accountancy and finance

Topic to be discussed• Meetings• Characteristics

• Company meetings• Statutory• Annual General Meeting• Extra Ordinary General Meeting

• Quorum for the meeting• Proxies• Resolutions• Ordinary Resolutions• Special Resolutions

• Political contributions by the company• Gifts distributions by the company

MEETINGS & PROCEEDINGS

MEETING“Any gathering, assembly or coming

together of two or more persons for the transaction of some lawful business of common concern is called meeting.”

CHARACTERISTICS OF MEETING

Two or more persons requiredFor some lawful businessNotice for intimationSpecified date, place and timeCompany’s meetings governed by

provisions of company’s act

COMPANY MEETINGS

Shareholders meetings

Statutory Meeting

Annual General Meeting

Extra Ordinary General Meeting

STATUTORY MEETING

STATUTORY MEETING

First meeting of members of PUBLICPUBLIC limited limited companycompany

Held only once in the life of company Meeting must be held after 3 months and before 6

months from the date of entitlement to commence business

Business of meeting is to consider “statutory report” Statutory report should be sent to each member at least

21 days before the statutory meeting Statutory report contains brief account of the state of

company’s affairs since its corporation and business plan

CONTENTS OF STATUTORY REPORT

• Conveyed by the directors to each member at least 21 days before meeting

• INCLUDES• List of members• Shares allotted and the amount received from them• Particulars of the directors, managers and secretary• Particulars of contracts that have to be approved• The detail of company’s affairs along with fees and

brokerage paid• Report shall be certified by chief executive and two

directors• Report should be accompanied by an auditor’s

certificate in respect of cash received against shares and receipts and payment of company

• 5 copies of report must be filed to the registrar

ANNUAL GENERAL MEETING(AGM)

ANNUAL GENERAL MEETING

Must be held every year Must be held by every type of company, public or private, limited by

shares or by guarantee, with or without share capital or unlimited company, once a year

The first AGM is to be held within eighteen months of incorporation Every subsequent(coming) AGM is to be held within four months of

the closing of the company’s annual financial year or 15 months from the last meeting whichever is earlier

Notice of the date of the meeting is to be send twenty one days before such date to the shareholders whereas in case of a listed company the notice is also required to be published in the newspaper

The gap between two AGMs should not be more than fifteen months In case of default in complying with any of these requirements all

officers to such default shall be held liable

AGENDA OF AGMIn this meeting the following matters are usually considered:•Annual accounts of the company•Declaration of dividend•Retirement and appointment of auditors•retirement and appointment of Directors

Extra Ordinary General Meeting(EGM)

Extra Ordinary General Meeting

All general meetings of a company , other than AGM and the statutory meeting are called Extra Ordinary General Meeting. Such meetings are called to deal with some urgent special business that can not be postponed till the AGM

These meetings are called by following ways:Calling of EGM by DirectorsCalling of EGM by Directors on request of members

Extra Ordinary General Meeting

1.Calling of Extra Ordinary General Meeting by Directors:The directors may at any time call the Extra Ordinary General Meeting of the company to consider any matter which requires the approval of the company and can’t be postponed till general meeting2. Calling of Extra Ordinary General Meeting on the Requisition of Members:The directors shall, on the requisition of members representing the one tenth of the voting power on the date of deposit of requisition, forthwith to proceed to call an extra ordinary general meeting

Extra Ordinary General Meeting

Requirements of Calling Extra Ordinary General Meeting on the Requisition of Members•The requisition shall state the objects of the meeting.•It will be signed by the requisitionists.•The requisition will be deposited at the registered office of the company•If the directors do not proceed within the twenty-one days from the date of the requisition being so deposited to call a meeting, the requisitionists may themselves call the meeting•The meeting so called shall be held within three months from the date of depositing such requisition.•The meeting will be called in the same manner as the meetings are called by directors•Expenses of the meeting shall be borne by the company

QUORUM FOR THE MEETING

QUORUM FOR THE MEETING

Quorum is the minimum number of members required to attend a meeting and transact business validly. In other words, it is the minimum number of members who must be present at a meeting for the purpose of transacting business validly

Provisions relating to quorum:In case of single member company

The single member present in person or proxyIn case of Listed company

Ten members, personally present, representing 25% voting powers either on their own account or as proxies in meeting

In case of any other company Two members, personally present, representing 25% voting powers either on

their own account or as proxies in meeting

PROXIES

PROXIESProxy is the person appointed to vote and speak

on behalf of a member in General meeting of a company

A member can’t appoint more than one proxyA proxy must be a member unless article

declare a non-member as a proxyProxy can speak and vote at meetingProxy can demand a pollProxy can abstain from voting

Resolutions

Resolutions

Decisions of a company are made by resolutions passed by the prescribed majority of the members present at the meetings or also called the collective decision of the members in a general meeting

Resolutions are of 3 kinds1.Ordinary Resolution2.Special Resolution3.Resolutions requiring special notice

Ordinary ResolutionsA resolution, which requires simple majority of the members entitled to vote and voting in person, or where proxies are allowed, by proxy, is called an ordinary resolution.

Some of the Ordinary resolutions: Issue of shares at discount Alteration of share capital Adoption of statutory report Passing of annual accounts and B/S, along with

reports of board of directors and auditors. Appointment of auditors and their remuneration

Ordinary Resolutions

A special resolution is one passed at a general meeting of a company when:•Not less than twenty one days notice has been given•The notice specifies the intension to propose the resolution as special resolution•By a majority of the three fourth of such members entitled to vote as are present as proxySome special resolutions:

Alteration of object clause of memorandum Change of name of a company with consent of central govt. Alteration of the articles of a company. Variation of shareholders rights. Payment of interest out of capital.

Resolution Requiring special notice• Provision in this act or in the articles, special notice is required

• Notice of the intension to move the resolution shall be given to the company not less than 14 days before the meeting

• The company must give to its members- notice

• Advertisement in a newspaper

POLITICAL CONTRIBUTIONS

POLITICAL CONTRIBUTIONS

A company cannot contribute and donate any amount to the following:

Any political party

Any political leader

A person contesting an election

In case of contravention a fine not exceeding of rupees 500000 may attract for every defaulting officer of the company

GIFTS DISTRIBUTIONS

GIFTS DISTRIBUTIONS

Companies are prohibited from distributing any gifts to its members in meetings of the company. In case of contravention fine not exceeding of Rupees 500000 may attract to every defaulter officer of the company.