Secretarial Standard -2 on “General Meetings”
Convening a General Meeting
The Board shall, every year, convene a Meeting of its Members called the Annual General Meeting(AGM).If the Board fails to convene its Annual General Meeting in any year, any member of the Company may approach the prescribed authority, which may then direct the calling of the Annual General Meeting of the Company.
EGM is called for transacting any Business of an urgent nature. Normally, There is a maximum gap of fifteen months between two Annual General Meetings. Therefore, if an important business arises in between two AGMs, that require shareholders approval, then an EGM may be called.
(a) In case of Company having Share Capital – Members not having less than one- tenth of the paid up share capital of the Company
(b) In case of a Company not having Share Capital – Members having not less than one-tenth of the total voting power of all the members.
Such an EGM must be called by the Board, within forty-five days from the date of receipt of such requisition.
General Meeting : Notice and other Considerations
Time, Day and Place of Meeting:– Every AGM/EGM 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. Provide that the AGM 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 situated, and EGM may be held at any place within India.
Frequency of Meetings:- Following points needs to be taken care of:
1. One AGM in every calendar year.
2. Shall be held within 6 Months of the date of closing of the financial year.
3. Maximum Gap of 15 Months between two consecutive AGMs.
Notice to be issued for every Meeting:- Notice of a Meeting shall be given, even if the Meeting is held on pre-determined dates or at pre-determined intervals.
To Whom Notice is to be Given:–
v Notice in writing of every Meeting shall be issued by the Company Secretary or where there is no Company Secretary, any Director or any other person authorized by the Board for the purpose to the following Persons:-
1. Every Member of the company.
2. The Directors of the company.
3. The Auditors of the company.
4. The Secretarial Auditors
5. Debenture Trustees, if any.
Where the notice shall be sent:-
Mode of Communication:-Through any of these means namely by hand, speedpost, registered post, courier, facsimile,e-mail or by any other electronic means.
Contents of Notice:- The following points are noteworthy in this regard:
v Notice shall specify the day, date, time and full address of the venue of the Meeting.
v The notice shall also specify that a Member entitled to vote is entitled to appoint a Proxy, to attend and vote instead of himself and that a Proxy need not be a member. Further, Notice shall be accompanied, by an attendance slip and a Proxy form.
v Notice shall clearly specify the nature of the Meeting and the business to be transacted thereat. It shall be noted that only those items of business shall be taken up which are specified in the Notice and those specifically permitted under the Companies Act, 2013.
v In respect of items of Special Business (Other than Ordinary Business), each such item shall be in the form of a Resolution and shall be accompanied by an explanatory statement.
v In respect of items of Ordinary Business (Consideration of Financial Statements, Board Reports, Auditor’s Report, Resolutions are not required except where the Auditors or Directors to be appointed are other than the retiring Auditors or Directors, as the case may be.
v For the purposes of above referred points,
(a) In case of AGM, special business means all the business except the below Business:
1. Consideration of Financial Statements, Board Reports, Auditor’s Report.
2. Declaration of dividend
3. Appointment of directors in place of those retiring.
4. Appointment/fixing of remuneration of the Auditors.
(b) In case of any other meeting, all business shall be deemed to be special.
v If the notice is not given in accordance with this Standard, then no business shall be transacted at a Meeting. However any accidental omission to give notice to, or the non-receipt of such notice by any member or other person who is entitled to such notice for any Meeting shall not invalidate the proceedings of the Meeting.
v If forany reason beyond the control of the Board, aMeetingcan not be held on the date originally fixed, then the Board may reconvene the Meeting after giving not less than 3 days intimation to members prior to the Meeting.
v Quorum for a General Meeting in case of a private company shall be 2 members
v Quorum shall be present not only at the time of commencement of the Meeting, but also while transacting business.
v Members need to be personally present at a Meeting to constitute the Quorum, and Proxies if any shall be excluded for determining the Quorum.
v A duly authorized representative of body Corporate or the representative of the President of India or the Governor of a State is deemed to be a Member personally present and enjoys all the rights of a Member present in person.
v One person can be the authorized representative of more than one body Corporate. In such a case, he is treated as more than one member present in person for the purpose of a Quorum. However, it will not affect that fact that to constitute a Meeting, at least 2 individuals shall be present in person.
Presence of Directors and Auditors in the Meeting
v If any of the director is unable to attend the Meeting, the Chairman shall explain such absence at the Meeting.
v The Auditors and the Secretarial Auditor, unless exempted by the company, shall, either by themselves or through their authorized representative, attend the General Meetings of the Company and shall have the right to be heard at such Meetings on that part of business which concerns them as Auditors or as Secretarial Auditors.
v The Chairman of the Board shall be the Chairman of the General Meeting. If the Chairman is not present within 15 minutes of the time appointed for holding the Meeting or he is unwilling to act as a Chairman then the Directors present shall elect the Chairman amongst themselves. If none of the Director is present or willing to take the Chair, then the Members present shall elect one of themselves to be the Chairman of the Meeting, by show of hands.
v A member is entitled to appoint a proxy to vote instead of himself at a Meeting.
v A Proxy need not be a member of the Company.
v A proxy can act on behalf of members not exceeding fifty and holding in the aggregate not more than 10% of the total share capital of the company carrying Voting Rights. However, a Member holding more than 10% of the total share capital of the Company carrying Voting Rights may appoint a single person as Proxy for his entire shareholding and such person shall not act as a proxy for another shareholder.
v Appointment of a Proxy shall be through proxy Form specified in the Article or setout in the Act. An instrument of Proxy is valid only if it is duly filled, stamped and signed
v Appointment of a Proxy is valid for the original Meeting and the adjourned Meeting also. A proxy given for the adjourned Meeting revokes the proxy given for the original Meeting.
v A proxy is valid until the written notice of revocation has been received by the Company before the commencement of the Meeting or adjourned Meeting. In case both the member and Proxy attend the Meeting, then the Proxy stands automatically revoked.
v Every Resolution shall be proposed by a Member and seconded by another Member. Every Member holding equity shares and, in certain cases as prescribed in the Act, every Member holding preference shares, shall be entitled to vote on a Resolution.
v Every Company shall, at the Meeting, put every Resolution, to vote on a show of hands at the first instance, unless a poll is validly demanded. A Proxy cannot vote on show of hand.
v The Chairman shall order a poll upon receipt of a valid demand for poll either before or on the declaration of the result of the voting on any resolution on show of hands.
v In case of voting on a show of hands, each Member present in person shall have only one vote irrespective of the number of shares held by him, whereas in case poll is demanded, each share shall represent one vote.
v In case of equality of votes, the chairman of Meeting shall have a second or casting vote.
v A Member who is a related party is not entitled to vote on a Resolution relating to approval of any contract or arrangement in which such Member is a related party.
Conduct of poll
v When a poll is demanded on any Resolution, the Chairman shall get the validity of the demand verified and if the demand is valid, the Chairman shall order the poll forthwith if it is on the Question of appointment of the Chairman or the adjournment of the Meeting and, in any other case, within 48 hours of the demand for poll. Moreover, in such cases, he shall announce the date, venue and time of taking the poll.
v Each Resolution put to vote by poll shall be put to vote separately.
v The Chairman shall declare the result of the poll within 2 days of the submission of report by thescrutiniser and the same shall be displayed on the Notice Board of the company at its registered office and its head office as well as Corporate office, if any, along with the details of the number of votes cast for and against the Resolution, invalid votes and whether the resolution has been carried or not shall be shown in the result. Further, the result of of the poll along with the scrutiniser’s report shall also be placed on the Website of the Company.
Withdrawal and Rescinding of Resolution
v Rescinding of Resolutions passed at a Meeting shall be done only by a Resolution passed at a subsequent Meeting.
Distribution of gifts
v Gifts (including gifts coupons or cash in lieu of gifts) shall not be distributed to Members, at or in connection with the Meeting.
v Every Company shall keep Minutes of all Meetings. Minutes shall be recorded in the Minutes book. Minutes, once entered in the Minutes Book, shall not be altered.
v Minutes shall be written in clear, concise and plain language and each item of business taken up at the Meeting shall be numbered.
v Minutes shall be signed and dated by the Chairman of the Meeting within 30 days from the conclusion of the General Meeting.
v Minutes Book shall be maintained at the Registered Office of the Company or at such other places if approved by the Board.
v Minutes of all Meetings shall be preserved permanently in physical or in electronic form with Timestamp. The Minutes Books shall be kept in the custody of the Company Secretary.
v Directors and Members can inspect the minutes during business hours of the Company. The Company Secretary in Practice, the Secretarial Auditor, the Statutory Auditor, the Cost Auditor or the Internal Auditor of the Company can inspect the minutes if it is necessary for the performance of their duties.
Contents of Minutes
v Minutes shall state, at the beginning, name of Company, day, date, time of commencement and conclusion of the Meeting.
v Minutes shall record the names of the directors and the Company Secretary present at the meeting.
v Record of election, if any, of the chairman of the Meeting.
v Record of presence of Quorum.
v Number of Members present in person including representatives.
v Number of proxies, if any and the number of shares represented by them.
v The presence if any, of the Secretarial Auditors, The Auditors, or their authorized representative.
v In respect of each Resolutions passed at the Meeting.
Disclosure in Annual Return:-
The Annual Return of a Company shall disclose the date of Annual General Meeting held during the financial year.