MODULE – VICompany Meetings & Company Secretary

Dr. K. SrinivasanDepartment of Management StudiesChrist University, Bangalore

IntroductionOne of the most important duties entrusted to the

secretary of any organization or association relates to arranging of the meetings of that organization or

association.

As regards the calling & conducting the meeting of a company, the secretary plays the most important role like drafting various circulars, notices & reports which

has to be submitted to BOD, Shareholders etc.

The secretary must also see that the provisions of the Company Act 1956 and AOA, with regard to the

convenient of a meeting are strictly adhered to all respects

Meetings of a CompanyMembers Meetings

a) General Meetings Statutory Meeting Annual General Meeting Extraordinary Meeting

b) Class Meetings of MembersDirectors Meeting

a) Board Meetingsb) Committee Meetings

Creditors (Or) Debtors Meetinga) During the Lifetime of the Companyb) Time of Winding Up of the Company

Statutory Meeting First meeting of the shareholders of a public

company and is held only once during the lifetime of a company.

Public Company limited by shares, guarantee & having a share capital should hold this meeting.

Meeting should be conducted between 1 to 6 months, respectively.

Duly dated & signed copy of the statutory report, along with the notice of meeting should be send to every members at least 21 days before meeting.

Objectives of the Meeting

1. Important facts relating to Incorporation, Allotment & to what extent the company is successful to raise from public.

2. Enabling the shareholders to discuss about other matters arising there from.

3. To approve the modification of the terms of any contracts named in the prospectus

Contents of the Statutory Report

1. Total Shares Allotted

2. Cash Received

3. Abstract of Receipts & Payment

4. Directors & Auditors

5. Contracts

6. Underwriting Contracts

7. Arrears of Calls

8. Commission & Brokerage

Secretarial Procedure The statutory report should be certified by at least

2 Managing Directors of the company. Once certified by the MD, the auditor of the

company must also certify about the receipts & payments of cash received should be reported within 7 days.

Procedure at the Meeting:

Secretary should produce a list showing the names, address, occupation and number of shares held by the members.

The list must remain open and accessible to any members of the company during the meeting.

The members are at liberty to discuss any matter relating to the formation of the company.

Secretary’s Duties1. Before the Meeting

Preparation of Statutory Report Certification of the Report Printing & Sending the Statutory Reports & Notice Filing the Copy of Statutory Reports with Registrar Drawing up the Agenda of the Meeting Preparation of list of Members Necessary Arrangement of holding the Meeting

2. At the Meeting Secure Attendance of the members Receiving the Directors & Members to be

comfortable Ascertain the Quorum Read the notice convening the meeting & statutory

report Exhibits complete list of Members Supply necessary information to the Chairman

Continued…

3. After the MeetingPrepare the Minutes of the Proceedings

Records the minutes of the meetings in Minutes Books

Minutes approved by the Chairman & signed within 30 days of the meeting.

Carry out the suggestions of the Board, if any, arising out of the statutory meeting.

Annual General Meeting Every Company in Calendar year hold in addition

to other meeting is called as AGM The notice circulated to the members should be

specify “AGM” Interval should not be more than 15 months. But,

the first AGM with a maximum period is 18 months.

The Registrar for any special reason can extend the time for holding the meeting upto 3 months.

AGM should be conducted only on working days not in public holidays

AGM should be conducted in company registered office or city or town or village near to registered office.

21 days prior notice should be passed to members.

Objectives of AGM

The management of Company’s business left to the discretion of the directors, the ultimate control over the action of the Board is vested in the members.

The members of the company meet at least once AGM to exercise control, affairs & review the working of the company.

Annual accounts are presented for the consideration of the members and dividends are declared in AGM

Consequences of Default

Any members can apply to Company Law Board for calling the meeting.

In default in AGM, the Company Law Board may call or direct the calling of AGM by giving such ancillary or consequential directions to think for calling, holding & conducting meeting.

Every officers of the company, who is in default shall be punishable with fine which may extend to Rs. 50,000 and in case of continuing default, with further fine up to Rs. 2,500 for every subsequent day.

Secretary’s Duties1. Before the Meeting

Preparation, Authentication & Audit of Accounts Printing & Issue of Notices and Reports Preparation of Certain Documents Preliminary Work of Dividend Distribution Receiving Proxies Press Report of the Proceedings Seating Arrangements

2. At the Meeting Helps the Chairman in ascertaining the Quorum Present the register details for inspection by member Read the notice & apologies for absence sent by

members Readymade copy of MOA, AOA, Members details etc Helps Chairman in supplying the information & answer

the queries raised by the members. Takes notes of the proceedings of the Meeting

Continued…3. After the Meeting:Draft the Minutes & Submit to the Chairman for getting approval within 30 daysExecute Instruction & resolutions of the AGM.Necessary changes in the register of directors & auditors in retirement, appointment & re-appointment.Necessary steps in issue of Dividends, WarrantsFile the AGM Report & Audited copy within 60 days of the meeting.File with registrar copies of the resolution agreed by all members of the meetings.Send TWO copies of the AGM to Department of Company Affairs, GOI & MRTP CompaniesTaking action against other matters of the shareholders.

Class Meetings of Shareholders

When company has more than one shareholder, separate meeting should be conducted for each class when any proposal affecting their respective rights & privilege are put forward.

The rights of preference shareholders are altered or when their shares are converted in equity shares, a meeting of the preference shareholders is to be held to secure their consent

The Articles of a Company usually provide for holding of such meetings.

Special resolution should be passed for bringing any change in the rights of any class of shareholders.

Extraordinary General Meeting

Statutory Meeting (SM) or AGM of a company are called ordinary meetings

Other than SM or AGM is called as EGM. It is also called as “Transacting some Urgent” or Special Business” which cannot be postponed till the next AGM.

The Board of Directors may call for EGM whenever it thinks fit.

The members of the company may also ask for EGM. The requisition for a meeting must come from 1/10th of the paid up capital holders or 1/10th Voting rights holders of the company.

The Board of Director must proceed the meeting within 21 day from the date of requisition. The meeting must be held within 45 days of the requisition.

Secretary’s Duties1. Before the Meeting

Assemble the Board meeting in consultation with Chairman for EGM and fixing the time.

Printing & Issue of Notices and Reports. Assist the Board in preparing draft resolution. Notice & Circulars duly printed. Send the notice & Circulars along with the proxy form,

admission cards & post to members register address. Scrutinize & register all proxies received within the

time2. At the Meeting

Admission cards duly signed & collected in entrance. Assist the chairman in ascertaining the quorum present Take notes of the proceedings & records the

resolutions Supply necessary references, explanation, information

& documents for the meeting Assist the chairman in conducting voting poll &

counting of votes

Continued…3. After the Meeting:

Draft the Minutes & Submit to the Chairman for getting approval within 30 days

Execute Instruction & resolutions of the AGM.

Send the copies of the minutes to the stock exchange.

File with registrar copies of the resolution agreed by all members of the meetings.

Incorporate the necessary changes in MOA & AOA as a result of the resolution passed in the meeting.

Taking action on other matters arising out of the decision of the shareholders.

Resolutions & QuorumThe wishes of a company can be expressed only by resolutions of a majority of the members present &

voting at a general meeting which has been properly organize according to the provisions of Articles.

According to Company Law Board, “A formal declaration of the will or wishes of the

company or the directors”

There are three kinds of resolution under Companies Act 1956. these are as follows;

Ordinary ResolutionSpecial ResolutionResolution requiring Special Notice

Ordinary Resolution Majority of Votes or Casting Vote by the

Chairman Votes can be cast by members in person or

by proxy. Unless the Companies Act, AOA, MOA

expressly require a special resolution, an ordinary resolution is sufficient to carry out any matters.

The resolution taken should be mainly depends upon the nature of business transaction, and not upon the kind of meeting at which it is passed so that all three kinds of resolutions may be passed at any kind of meetings

Continued….1. Alteration of name with previous approval of GOI2. Issue of shares at discount subject to Company law

Board3. Alternation of Share capital4. Dispatching out Annual A/c, Balance Sheet etc to

directors5. Appointment of 1st directors who are liable to retire6. Increase or decrease in directors within the limit

fixed by the Articles.7. Appointment of MD or Whole time MD8. Approval of appointment of sole selling agents9. Removal of director & appointment of a director10.Appointment of auditor & fixing their

remuneration.11.Nomination of liquidator in a creditors voluntary

winding up

Special Resolution (SR)Resolution is a special resolution if it is passed

by a majority of 3/4th of the members voting by a show of hands or poll or by proxy. The notice should be duly signed by Company Act in meeting at which

it can be removed by passing special resolutionAlteration of MOA from one to another SR is neededOmission or addition of the word Pvt SR is neededAlteration of AOA, MOAConversion of any portion of uncalled capital to reserveReduction of Share CapitalVariation of Shareholders rightsRemoval of a company registered office from one locality to anotherPayment of Interest out of capital

Resolution Required Special Notices

This category of resolution was introduced by the Company Act 1956

The important aspects of this resolution is a prior special notice should be submitted by the proposer

The notice must be given 14 days before the meeting at which resolution is to be moved & the key point considered by the members in the meeting.

The company should advertise in the newspaper having an appropriate circulation or any other mode.a) Appointment of an auditor other than the retiring oneb) Provision for retiring auditor to be re-appointedc) Removal of directord) Appointment of a director in place of one who is

removed

QuorumThe minimum number of members present in to constitute a meeting & transact business. The Quorum is generally fixed by the Articles, if the

quorum is not present, there is no meeting & the proceedings held to be invalid.

In case, the AOA does not provide for a quorum, 5 & 2 member personally present in case of Pubic & Private Co.The representative of a body corporate appointed by Central or State Government should determine a quorum.To two provision should be applied for Pubic & Private Company in conducting meeting; they are

a) Quorum is not present within half an hour, the meeting called upon requisition of members stands dissolved. Otherwise, it stands adjourned to next week at the same time & place.

b) In the adjourned meeting also the quorum is not present within half an hour the members present are the quorum.

Quorum - Exceptions In class meeting of shareholders, all shares of

that class are held by one person, he alone can constitute a meeting & pass a class resolution by signing it.

One member or a proxy shall constitute a meeting, if the Company Law Board call for any type of meeting.

In adjourned meeting of the company, the Quorum is not present in such a case one member can constitute meeting.

Company Law Board orders an EGM, it may direct that even one member or proxy can constitute a meeting.

Secretarial Duties on Quorum

Ascertain the quorum fixed for AOA & Board of directors is present, in absence of any provisions in the AOA to follow in statutory provisions

Advise the Chairman as to quorum in a meeting Check the Quorum of AGM consists of only

members present in person not proxy & the Board meetings of only disinterested directors to be counted in quorum.

Advise Chairman to dissolve or adjourn the meeting if the quorum is not present within half an hour of appointed time. No quorum is necessary at adjourned meeting.

Draw attention of Chairman if at any time during the meeting the quorum is not present.

Who is a Secretary?

“Whose office it is to write for another; especially one who is employed to conduct correspondence, to

keep records and to transact various other businesses for another person or for a society,

corporation or public body”.Oxford Dictionary

One employed to write or transact business for another or for a society, company etc.

Chamber’s 12th Century Dictionary

Types of Secretaries1. Private Secretary

2. Secretary of an Association or Club

3. Secretary of Co-operative Society

4. Secretary of Government Department

5. Secretary of an Embassy or Diplomatic Mission

6. Secretary of a Local Body

7. Company Secretary

Qualification of Company Secretary

A company having a paid-up capital of not less than Rs. 50 lakhs shall have. a whole-time secretary.

A person can be appointed as whole time secretary unless he is a member of Institute of Company Secretary of India constituted under Companies Secretaries Act 1980.

A Company having a paid-up capital of less than Rs. 50 lakhs may appoint any person as whole-time secretary under Companies Act 1956.

An individual is eligible with the following categories like Member of ICS, ICAI, ICWAI etc.

PGDM granted by IIMA, IIMB, IIMC etc.

Other Qualities1. General Education2. Knowledge of Secretarial Work3. Knowledge of Company Law4. Knowledge of Labour Law

a) Factories Act 1948 (b) Minimum Wages Act 1948c) Industrial Disputes Act 1947 etc.

5. Knowledge of Mercantile Laws6. Knowledge of Economic Laws7. Knowledge of Banking & Finance8. Knowledge of Book-keeping & Accounting9. Knowledge of Office Management10.Knowledge of Language11.Winsome Personality

Appointment of SecretaryThe promoter of the company will appoint the first

secretary called as “Pro tem Secretary”, who helps in carrying all preliminary work & formalities of the

company. But, he is not a regular Secretary.

Resolution must be passed at the meeting by Board of Directors to appoint secretary & their conditions, services, duties, remuneration, length of appointment.A person appointed as a secretary holds an appointment in any other company, he has to notify the company within 30 days of his appointment.Director relative is appointed as a secretary then a special resolution has to be passed in meetingLastly, the necessary details should be properly disclosed in the register of director, MD etc.

Duties of a Secretary

Dismissal of Company Secretary

Secretary term of appointment as expired.

Secretary has given a proper notice of dismissal as per the terms of agreement employment.

Secretary makes a secret profit.

Secretary misconducts himself.

Secretary for his breach of contract, Un Ethical values, Negligence, Disobedience, Competence of Permanently disability

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