The following points highlight the top three kinds of general shareholders meeting of a company. The kinds are: 1. Statutory Meeting 2. Annual General Meeting 3. Extraordinary General Meeting.
Every public company limited by shares, and limited by guarantee and having a share capital, must hold a general meeting of its members within a period of not less than one month nor more than six months from the date at which the company is entitled to commence business.
The Board must, at least 21 days before the day of the meeting, forward to every member a report called the Statutory Report along with the notice of the meeting. The meeting is known as Statutory Meeting.
The Statutory Report must state the following:
(a) The number of shares allotted distinguishing those allotted as fully or partly paid up otherwise than in cash, the extent to which they are partly paid up, the consideration for which the shares are allotted and the total amount received in cash;
(b) An abstract of the receipts and payments made up to a date within seven days of the report giving receipts and payments under distinctive heads and particulars of balance in hand;
(c) An account or estimate of the preliminary expenses including commission and discount paid or payable on the issue or sale of shares and debentures;
(d) Names, addresses and occupations of its directors and auditors, and also of its manager, and secretary, if any, and any change that may have occurred since the date of incorporation;
(e) If any contract is to be modified, the particulars of such contracts with those of the proposed modification or the actual modification which is to be submitted for approval at the meeting;
(f) The extent to which underwriting contracts, if any, have not been carried out and the reason therefore;
(g) The arrears, if any, due on calls from directors, and manager; and
(h) The particulars of any commission or brokerage paid or to be paid in connection with the issue or sale of shares to any director.
At least two directors (one of them being the managing director, if there is one) must certify the report. The auditors of the company must also certify the report so far as it relates to the shares allotted by the company, cash received in respect thereof and the receipts and payments account.
A copy of the report, duly certified, must be filed with the Registrar. It should be noted that a company cannot alter the terms of any contract referred to in the prospectus before the statutory meeting.
Procedure at the meeting:
At the meeting, a list of members and of the number of shares held by them respectively must be produced and kept open and accessible to the members of the company during the continuance of the meeting.
Any matter relating to the formation of the company or arising out of the Statutory Report can be raised without notice for discussion but, unless a notice has been given, a resolution cannot be passed. The meeting may be adjourned from time to time and a resolution may be passed at the adjourned meeting if due notice has been given in the meantime.
Under section 166, every company without exception must hold, in addition to any other meeting, a general meeting specifying it as Annual General Meeting in the notice calling it. The first annual general meeting must be held within 18 months of the incorporation.
It is not then necessary to hold any annual general meeting in the year of its incorporation or in the following year. Thereafter, an annual general meeting must be held every year but the interval between two annual general meetings must not be more than 15 months.
The Registrar is allowed to extend the time by 3 months. The meeting can be held only in the city, town or village where the registered office is situated.
It must be held during business hours and must not be held on a public holiday. If default is made in holding the meeting, the Central Government may, on the application of any member of the company, call or direct the calling of the general meeting. A notice of 21 days is necessary.
The usual business at the meeting is:
(a) Consideration of the annual accounts and the balance sheet and the report of the directors.
(b) Election of directors in place of those who retire.
(c) Appointment of auditors,
(d) Declaration of dividend.
All these matters are disposed of by simple majority.
It should be noticed that an annual general meeting can also transact business other than the four items enumerated above. But all such other business will be treated as special and proper notice must be given.
Every general meeting of the company, other than the statutory meeting and the annual general meeting, is an extraordinary general meeting. It is usually called by the directors for transacting some special or urgent business which has to be done before the next annual general meeting. Only the special business for which it is convened can be transacted at this meeting.
Section 169 provides that an extraordinary general meeting must be called by the Board on the requisition of members holding 10% of the paid-up capital carrying voting rights in respect of the matter to be discussed, and where a company has no share capital, on the requisition of members holding 10% of the total voting power in regard to the matter to be discussed.
The meeting must be called within 21 days of the deposit of the requisition to be held on a day not later than 45 days from such date. The notice must state the matters for consideration at the meeting. If the Board does not hold the meeting within 45 days of the requisition, the requisitionists may hold the meeting within 3 months of the requisition.
Notice of such meetings should be given in the same manner as for regular meetings. The requisitionists can recover from the company their reasonable expenses and the company can make good from the directors at fault.
Under section 186, the National Company Law Tribunal may order a meeting of the company to be held either of its own accord or on the application of a director or a member entitled to vote.