GENERAL MEETINGS

A company may have many kinds of meetings; general meetings are one among them. In very simple terms, a meeting of general body may be called general meeting. General meeting comprises of all general members of an organisation that is company in our case.

A general meeting may be Annual General Meeting (AGM) or Extra – ordinary General Meeting (EGM).

It may be noted that to be a meeting there must be more than one person. Therefore, meeting may not be possible in case of One Person Company (OPC) unless law presume something under a legal notion.

Because we are going to discuss annual general meeting, we must understand what the year is.

FINANCIAL YEAR (SECTION 2(41)):

In case of a company and body corporate, Financial Year mans the period ending on the 31st day of March every year.

Where the company or body corporate has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year, in respect whereof financial statement of the company or body corporate is made up.

On an application made by a company or body corporate, which is a holding company or a subsidiary of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, the Tribunal may, if it is satisfied, allow any period as its financial year, whether or not that period is a year.

This may be clear that where tribunal allow, the company or body corporate may have a financial year which may not end on the 31^st day of March.

A company or body corporate, existing on the commencement of this Act, shall, within a period of two years from such commencement, align its financial year as per this definition of financial year.

This is beyond doubt that where the Act talking about year, which is not financial year, it is calendar year.

ANNUAL GENERAL MEETING (SECTION 96):

Every company other than a One Person Company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting. The company shall specify the meeting as such in the notices calling Annual General Meeting.

Time Periods for Annual General meeting:

In case of the first annual general meeting, it shall be held within a period of nine months from the date of closing of the first financial year of the company. If a company holds its first annual general meeting as aforesaid, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation.

This means, for a company incorporated on 1^st day of January 2015, the first financial year shall be closed on 31^st day of March 2016 and Annual General Meeting should be convened on or before 31^st day of December 2016. However for a company incorporated on 31^st day of December 2014, the first financial year shall be closed on 31^st day of March 2015 and Annual General Meeting should be convened on or before 31^st day of December 2015.

In any case other that first annual general meeting, it shall be held within a period of six months, from the date of closing of the financial year. Not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next.

The Registrar may, for any special reason, extend the time within which any annual general meeting, shall be held, by a period not exceeding three months.   However the Registrar may not extend the time for first annual general meeting.

Where, last annual general meeting was held on 31^st day of December 2015, next annual general meeting shall be held on or before 30^th day of September 2016. However where, last annual general meeting was held on 31^st day of May 2015, next annual general meeting shall be held on or before 31^st day of August 2016. The Registrar may extend these dates to 31^st day of December 2016 and 30^th day of November 2016 respectively.

Day and time for Annual General Meeting:

Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate.

“National Holiday” means and includes a day declared as National Holiday by the Central Government. Yet, Republic Day, Independence Day and Gandhi’s Birthday has been declared as National Holidays.

POWER OF TRIBUNAL TO CALL ANNUAL GENERAL MEETING (SECTION 97):

If any default is made in holding the annual general meeting of a company under section 96, the Tribunal may,  on the application of any member of the company, call, or direct the calling of, an annual general meeting of the company and give such ancillary or consequential directions as the Tribunal thinks expedient. Nothing contained in this Act or the articles of the company may affect this power of the Tribunal.

LIPA AGM PHOTO (Photo credit: leadindiapublishersassociation)

Such directions may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.

A general meeting held as per direction of the Tribunal shall, subject to any directions of the Tribunal, be deemed to be an annual general meeting of the company under this Act.

EXTRA – ORDINARY GENERAL MEETING (SECTION 100):

The Board may, whenever it deems fit, call an extraordinary general meeting of the company.

Extra ordinary General Meeting on requisition:

The Board shall, at the requisition made by,—

(a) in the case of a company having a share capital, such number of members who hold, on the date of the receipt of the requisition, not less than one-tenth of such of the paid-up share capital of the company as on that date carries the right of voting;

(b) in the case of a company not having a share capital, such number of members who have, on the date of receipt of the requisition, not less than one-tenth of the total voting power of all the members having on the said date a right to vote,

call an extraordinary general meeting of the company.

The requisition made shall set out the matters for the consideration of which the meeting is to be called and shall be signed by the requisitionists and sent to the registered office of the company.

If the Board does not, within twenty-one days from the date of receipt of a valid requisition in regard to any matter, proceed to call a meeting for the consideration of that matter on a day not later than forty-five days from the date of receipt of such requisition, the meeting may be called and held by the requisitonists themselves within a period of three months from the date of the requisition.

A meeting by the requisitionists shall be called and held in the same manner in which the meeting is called and held by the Board.

Any reasonable expenses incurred by the requisitionists in calling a meeting shall be reimbursed to the requisitionists by the company and the sums so paid shall be deducted from any fee or other remuneration under section 197 payable to such of the directors who were in default in calling the meeting.

EXTRA – ORDINARY GENERAL MEETING BY TRIBUNAL (SECTION 98):

If for any reason it is impracticable to call a meeting of a company, other than an annual general meeting, in any manner in which meetings of the company may be called, or to hold or conduct the meeting of the company in the manner prescribed by this Act or the articles of the company, the Tribunal may, either suo motu or on the application of any director or member of the company who would be entitled to vote at the meeting,—

(a) order a meeting of the company to be called, held and conducted in such manner as the Tribunal thinks fit; and

(b) give such ancillary or consequential directions as the Tribunal thinks expedient, including directions modifying or supplementing in relation to the calling, holding and conducting of the meeting, the operation of the provisions of this Act or articles of the company.

Such directions may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.

Any meeting called, held and conducted in accordance with any order made shall, for all purposes, be deemed to be a meeting of the company duly called, held and conducted.

PUNISHMENT FOR DEFAULT (SECTION 99):

AGM 2009 IMG_5063m (Photo credit: Philip Talmage)

If any default is made in holding a meeting of the company in accordance with section 96 or section 97 or section 98 or in complying with any directions of the Tribunal, the company and every officer of the company who is in default shall be punishable with fine which may extend to one lakh rupees and in the case of a continuing default, with a further fine which may extend to five thousand rupees for every day during which such default continues.

In our next post we will discuss about preparation for a general meeting.

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