GENERAL PRINCIPLES OF MEETINGS MEETING

Utkarsh Mishra

GENERAL PRINCIPLES OF MEETINGS MEETING

• A meeting is a gathering or assembly of two or more persons at a predecided date, time and place for transacting certain lawful business.

MEETINGS OF A COMPANY

1. Meeting of members-shareholders:

i) Statutory meeting.

ii) Annual general meeting.

iii) Extraordinary general meeting.

iv) Class meeting.

2. Meetings of directors:

i) Meeting of the board of directors.

ii) Meeting of the committees of directors.

3. Other meetings:

i) Meeting of Debenture holders.

ii) Meeting of creditors.

iii) Meeting of contributories.

REQUISITES OF VALID MEETING

1. A meeting should be convened by proper authority.

2. It must be convened by a proper notice served in the

prescribed manner on all persons entitled to receive such

notice.

3. It must be convened to transact lawful business as per its

agenda.

4. It must be presided by properly elected chairperson.

5. It must have a proper quorum.

6. It must be conducted by following lawful procedure.

7. Proper resolutions must be passed for transacting business of the meeting.

8. The minutes of the proceeding must be properly recorded.

AUTHORITIES FOR CONVENING MEETING1. Board of directors:

The Board of directors are empowered to convene every

type of general meeting of the members of the company.

2. Directors, on the requisition of members:

Sometimes, a requisition is made by the members of the

company to call a general meeting.

3. The Tribunal:

When the directors make a default in holding annual general

meeting (AGM) of company, the Tribunal may call or direct

the calling of such meeting.

NOTICE OF MEETING

For a valid meeting, a proper notice is a pre-requisite. In connection with a proper notice , the following things must be considered:

1. Length of notice

2. Contents of notice

3. persons entitled to notice

4. Mode and service of notice

1. Length of notice:

A general meeting of a company may be called by giving

not less than twenty-one days notice in writing.

In computing 21 clear days, the following days should also be added to the twenty-one days:

i. The day on which notice is served.

ii. The day of the meeting.

iii. In the case the notice is sent by post ,48 hours, i.e.,

two days for postal transit.

SHORTER NOTICE :

i) In the case of an annual general meeting:

If shorter notice is approved by all the members entitled to

vote there at.

ii) In the case of any other meeting:

If shorter notice is approved by members of the

company holding, not less than 95 per cent of the

paid up share capital of the company having a right

to vote at the meeting.

iii)In the case of company not having a share capital:

If shorter notice is approved by members having

not less than 95 per cent of the total voting power

exercisable at that meeting

2. Contents of notice: Every notice of a company shall specify the following:

i) The place of the meeting.

ii) The day of the meeting.

iii) The hours of the meeting.

iv) Contain a statement of the business to be

transacted at the meeting.

A statement of business i.e., agenda placed under two

categories:

i). General Business

ii). Special Business

i) General Business:

a) The consideration of the accounts, balance sheet and

the reports of the Board of directors and auditors.

b) The declaration of a dividend.

c) The appointment of directors in the place of retiring.

d) The appointment of and the fixing of the remuneration

of , the auditors.

ii) Special Business:

a) All material facts concerning each item of the special

business.

b) Nature and extent of interest of every director and the

manager in any item of special business.

iii) Any item of business consists of according of approval

to any document by the meeting, the time and place

where the document can be inspected.

3. Persons entitled to notice:

i) Every member of the company.

ii) Persons entitled to share in consequence of the death

or insolvency of a member.

iii) The auditor or auditors, of the company.

iv) The public trustee who is legally entitled to represent

the members of the company.

4. Mode and service of notice:

A notice may be served by a company on any member of

the company either personally, or by sending it by post to

him at his registered address.

AGENDA The term ‘agenda’ means ‘things to be done’. The agenda

is a ‘statement of the Business to be transacted at a meeting’. The agenda generally takes the time –table or programme

which sets out the items to be taken up at meeting in chronological order.

The chairman can change the order of items or business with the consent of the members.

The companies generally prepare and send notice including agenda to the shareholders and others who are entitled to receive notice of meeting.

An agenda categories the business to be transacted at meeting into two heads:

i) Ordinary Business

ii) Special Business

QUORUM Quorum means the presence of certain minimum number

of members which is required at a meeting for transacting its business.

In the absence of quorum ,the proceedings of the meeting are invalid.

The provisions with regard to the quorum for meeting are as follows:

1) Requirements of members for quorum :

5 members personally present in the case of public

company and 2 members personally present in the

case of any other company, shall be the quorum for a

meeting of a company.

2) Time of presence of quorum:

The quorum must be present when the meeting

proceeds to business.

3) Presumption as to quorum:

A quorum will always be presumed unless it is

questioned at the meeting or the recorded facts show

that quorum was not present.

4) Dissolution and adjournment of meeting:

Unless the articles otherwise provide, if within half

an hour from the time appointed for holding a

meeting of the company, a quorum is not present, the

meeting, if called upon the requisition of members

shall stand dissolved.

In other case meeting shall be adjourned to the same day

in the next week, at same time and place or other day

at such other time by the Board of directors.

5) Quorum at the adjourned meeting:

If a quorum is not present within half an hour from

the time appointed for holding the meeting , the

members present shall be the quorum.

6) One member to constitute meeting and quorum:

Normally one member cannot constitute a meeting

and cannot fulfill the requirements of quorum. Exceptional cases one member can constitute a

meeting:

i) Class meeting of shareholders.

ii) Tribunal calls a meeting.

iii) Proxy or Quorum not present.

CHAIRMAN Chairman is an indispensable person for the successful

conduct of corporate meeting. He is person appointed to regulate, control, direct the smooth conduct of the business of a meeting so that the objectives of the meeting can be effectively achieved.

APPOINTMENT OF CHAIRMAN:

1) By show of hands:

2) Appointment when poll is demanded: Provisions for appointment of chairman:

1) The chairman of the board shall preside as chairman at

every general meeting of the company.

2) If there is no such chairman, or if he is not present within

15-minutes after the time appointed for holding the

meeting, or is unwilling to act as chairman of the meeting,

the directors present shall elect one of their member to be

chairman of the meeting.

3) If no director is willing to act as chairman then members

present shall choose one of their member to be chairman

of the meeting.

DUTIES OF CHAIRMAN He must ensure that the meeting is properly convened by

giving a proper notice. He must ensure that the meeting is duly constituted, i.e.,

himself and quorum is there.

He must ensure that order and decorum is maintained during the meeting.

He must ensure that the provisions of act and articles are observed.

He must ensure that the proceedings at the meeting are properly and regularly conducted.

He must decide whether the motion and amendments are in order and within scope of the meeting.

He must ensure that the sense of the meeting is properly ascertained with regard to any question which properly comes before the meeting.

He must ensure that all members, including the minority, get an equal opportunity to express their views.

He must act at all times bona fide in the best interest of the company.

INTERRUPTIONS IN DEBATE/DISCUSSIN During the meeting members may interrupt the proceedings

in various ways:

1. Amendment

2. Point of order

3. Closure motion

4. Previous Question

5. Next Business

6. Adjournment

1. Amendment An amendment is any alteration of the motion proposed by

a number before it is voted upon and adopted. General Rules regarding amendment:

1. The amendment must always be affirmative in form.

2. It should be seconded.

3. It must not be a mere negation of the original motion or a counter proposal.

4. It must be relevant to the subject matter of the main motion.

5. It should be moved before the original motion is put to vote.

6. It can be moved and seconded by a member who has not already spoken on the original motion .

7. It must be within the scope of the notice of the meeting.

8. A person can move only one amendment.

9. The mover of the amendment has no right to withdraw it unless the members present agree to the withdrawal.

10. When the amendment motion is put to the meeting, if passed ,becomes a resolution.

2. Point of order Sometimes, during the debate on a motion or during the

conduct of proceedings of the meeting a member wants to draw attention of the chairman to some irregularity.

In such a case, he raises a point of order. Usually , point of order is raised in the following cases:

1.Where incorrect procedure is being adopted or procedure laid down by the rules is not followed.

2.Where the member is speaking in express of the scope of notice.

3.When a member makes derogatory remarks or uses abusive

language.

4.When there is absence of quorum.

3. Closure Motion When a member moves a motion in order to end or close

prolonged discussion on a motion before the meeting, It is said to be a closure motion.

4. Previous Question It is formal and procedural motion. The motion under discussion should not be voted upon or

voting should be deferred

Such a motion can be moved by a member who has not already spoken on the motion

The previous question motion may be debated but no amendment can be made to it

5. Next BusinessThe formal motion of ‘next business’ is moved with a

view to postpone or shelve a discussion and decision on any motion before the meeting

More important and urgent agenda need to be discussed

meeting may proceed to next businessAfter seconded it is put to voteIf it is lost , discussion on the main motion is resumed

and decision id taken

6. Adjournment Two types-

i) Adjournment of debate

ii) Adjournment of meeting

i) Adjournment of debate is moved with the object of suspending or deferring discussion on the main motion•A member moves such motion when he is of the opinion that information is enough and more discussion is needed to reach to a decision

METHODS OF ASCERTAINING SENSE OF MEETING

1. By acclamation:

2. By voice vote

3. By division

4. By standing vote

5. By show of hands

6. By ballot

7. By poll

PROXIES A proxy is person appointed by a member of a company to

attend and vote on his behalf as per his directions at a meeting of the company.

PROVISION REGARDING PROXY

1) A member can appoint:

Any member of a company entitle to appoint another

person as his proxy to attend and vote instead of himself.

LIMITATIONS:

i) A member of a company not having a share capital cannot

appoint proxies.

ii) A member of a private company shall not be entitled to

appoint more than one proxy to attend same occasion .

2. Person entitled to be appointed as proxy:

Any person may be appointed as proxy. He may or may

not be a member of the company.

3. Appointment procedure:

i) The appointment of a proxy must be made on an

instrument in the prescribed form.

ii) It must be in writing.

iii) The instrument appointing a proxy shall be signed by

the appointer or his attorney duly authorized in writing.

iv) Clearly state the name of the person so appointed.

v) Date & common seal ,if proxy is appointed by a

company.

4. Time of lodging proxy or proxy instrument:

The duly completed instrument of proxy must be deposited

with the company 48 hours before the time fixed for the

meeting.

5. Inspection:

Proxy forms can be inspected during 24 hours beginning

before the time fixed for the meeting. The proxy form

shall open for inspection during business hours.

6. No Proxy at Company cost:

If an invitation is issued at the expense of the company

asking any member to appoint a particular person as

proxy, every officer of the company who is default, shall be

liable to a fine up to Rs.10000

7. Revocation of proxy:

A member may revoke the proxy’s authority by attending

and voting himself before proxy has voted.

8. Rights of Proxy:

i) He can vote but not have a right to speak.

ii) A proxy has to vote only on a poll.

iii) He cannot speak to a meeting unless he is allowed by the

chairman of the meeting.

iv) A proxy appointed by the president or the governor can

speak ,take part in discussions, vote by show of hands,

demand a poll. He may even appoint a proxy to attend

and vote instead of himself.

9. Relationship between member and proxy:

The relationship between a member and his proxy is that

of a principal and agent. Therefore , the proxy is bound to

act in accordance of with the instructions of the member

appointing him.

MINUTES OF MEETING Minutes means official record of the proceedings of a

meeting or the business transacted at a meeting.

KINDS OF MINUTES:

1) Minutes of resolutions

2) Minutes of narration

3) Combination of resolutions as well as narration

1) Minutes of resolution:

When minutes of resolutions are recorded, only the

decisions arrived at the resolution passed at the meeting

are recorded.

2) Minutes of narration:

The minutes are recorded in summarized form only

summarized account of discussions, business transacted

, decisions arrived, number of vote cast for favor and

against a resolution.

3) Combination method:

All the details of resolution and narration minutes are

mentioned.

Contents of minutes

i) Number, Date and place.

ii) The name of the chairperson, the name of directors, secretary, the number of members present etc.

iii) Past meeting record.

iv) Description of resolution passed, business transacted and decisions taken at the meeting.

v) Contracts approved, if any.

vi) Special resolution passed, if any.

vii) Signature of chairman and date of confirmation.

Legal provision relating to minutes

1) Mandatory to record minutes

2) Within thirty days

3) Minute book

4) Numbering of each page

5) Signing of minutes

6) Contents

7) Contents of minutes of Board meeting

8) Penalty

9) Minutes to be evidence

10) Inspection of minute book of general meeting

11) Publication of reports of proceedings of general meeting.

MOTION A motion is a proposal/matters submitted for discussion and

decision before a general meeting. It is presented by the chairman of the meeting as well as by

any member of the company with the permission of the chairman.

Kinds of Motions 1) Original or agenda motions:

Notified motions for which a formal notice is sent.

2) Formal or procedural motions:

Which arise out of discussions during the meeting.

RESOLUTIONS

A resolution is a formal decision of a meeting on any proposal presented before it.

Kinds of Resolution

i) Ordinary resolution

ii) Special resolution

iii) Resolution requiring special notice