CL MOD 2 PART 1.ppt
- 2. Meetings of Company: • A company will hold meetings from time to time to decide upon the isuue of shares, bonds, calling back bonds, decide on yeild of bonds etc. • Meetings of the company are of three kinds:1. Meetings of Members • 2. Meetings of Directors • 3. Meetings of creditors
- 3. Meetings of Members • These meetings are general meetings as they are attended by all the members. • The management of the company is undertaken through meetings of the company’s shareholders where major decisions are to be taken. The meetings are usually called by directors, but may also be called by the shareholders. In case of default the Commission(appointed by shareholders constituting themselves) may call a meeting, either of its own accord or on the application of members.
- 4. Meetings of Members • Types of meetings of the shareholders: • The meetings of the shareholders are of three types: 1. The Statutory Meeting 2. The Annual General Meeting 3. Extra Ordinary General Meeting
- 5. Meetings of Members 1. The Statutory Meeting: • The statutory meeting is the first meeting of the members of the company after it commences business. It is held once in lifetime of the company. • Section 157(1) states that “ every company limited by shares and every company limited by guarantee and having a share capital shall , within a period of not less than three months, nor more than six months, from the date at which the company is entitled to commence business, hold a general meeting of the members of the company, which shall be called ‘the statutory meeting’”.
- 6. The Statutory Meeting: • Subsection (12) states that this section shall not apply to a private company. • Thus the following companies are required to hold the statutory meeting: • Every public company limited by shares. • Every company limited by guarantee and having a share capital.
- 7. The Statutory Meeting: • Requirements of Statutory Meeting: Following are the requirements of statutory meeting: • It is to be held within a period of three to six months after the commencement of business. • Twenty one days before the date on which the meeting is held, the director shall forward a report, “the Statutory Report” to every member. The report is to be certified by the CEO and two other directors. After certification a copy is to be sent to the registrar and the auditors.
- 8. The Statutory Meeting • The Statutory report includes the following: − List of Members − Shares allotted and the amount received from them − Particulars of the directors, managers and secretary − Particulars of contracts that have to be approved − The detail of company’s affairs along with fees and brokerage paid. • The members present at meeting are at liberty to disclose any matter relating to the formation of the company.
- 9. 2. Annual General Meeting (AGM) • The Annual General Meeting (AGM) is a required meeting under the ordinance. It is an annual meeting through which the shareholders control the affairs of the company. They may raise questions about the affairs of the company including its accounts. It is, therefore, the annual general meeting of the company that protects the interest of the
- 10. 2. Annual General Meeting (AGM) • Requirements of AGM: Following are the requirements of AGM: i. It must be held every year. ii. The first AGM is to be held within eighteen months of incorporation. iii. Every subsequent(coming) AGM is to be held within four months of the closing of the company’s annual financial year.
- 11. 2. Annual General Meeting (AGM) iv. Notice of the date of the meeting is to be send twenty one days before such date to the shareholders whereas in case of a listed company the notice is also required to be published in the newspaper. v. In case of default in complying with any of these requirements all officers party to such default shall be held liable. vi. The gap between two AGMs should not be more than fifteen months.
- 12. 2. Annual General Meeting (AGM) • Agenda of AGM: • In this meeting the following matters are usually considered. • Annual accounts of the company • Declaration of dividend • Retirement and appointment of auditors • retirement and appointment of Directors
- 13. 3. Extra Ordinary General Meeting • According to section 159 all general meetings of a company , other than AGM and the statutory meeting are called Extra Ordinary General Meeting. Such meetings are called to deal with some urgent special business that can not be postponed till the AGM. These meetings are called by two ways: i. Calling of Extra Ordinary General Meeting by Directors. ii. Calling of Extra Ordinary General Meeting on the Requisition of Members.
- 14. 3. Extra Ordinary General Meeting i. Calling of Extra Ordinary General Meeting by Directors: • The directors may at any time call the Extra Ordinary General Meeting of the company to consider any matter which requires the approval of the company in general meeting. ii. Calling of Extra Ordinary General Meeting on the Requisition of Members. • The directors shall, on the requisition of members representing the one tenth of the voting power on the date of deposit of requisition, forthwith to proceed to call an extra ordinary general meeting.
- 15. 3. Extra Ordinary General Meeting • Requirements of Calling Extra Ordinary General Meeting on the Requisition of Members. • Requirements of Calling Extra Ordinary General Meeting on the Requisition of Members are following: i. The requisition shall state the objects of the meeting. ii. It will be signed by the requisitionists. iii. The requisition will be deposited at the registered office of the company.
- 16. 3. Extra Ordinary General Meeting iv. If the directors do not proceed within the twenty- one days from the date of the requisition being so deposited to call a meeting, the requisitionists may themselves call the meeting. v. The meeting so called shall be held within three months from the date of depositing such requisition. vi. The meeting will be called in the same manner as the meetings are called by directors.
- 17. 3. Extra Ordinary General Meeting • Notice of an Extra Ordinary General Meeting: • The notice of an Extra Ordinary General Meeting shall be send to the members at least twenty one days before the date of the meeting and in case of a listed company it shall also be published in a newspaper. A shorter notice period will require approval of the registrar.
- 18. BOARD OF DIRECTORS POWERS Section 179 of the Companies Act, 2013 provides that the Board of directors of accompany shall exercise the following powers on behalf of the company and it shall do soon by means of resolution passed at meeting of the Board: (a) the power to make calls on shareholders in respect of money unpaid on their shares; (b) the power to issue debentures; (c) the power to borrow moneys otherwise than on debentures (d) the power to invest funds of the company; and(e) the power to make loan.
- 19. DUTIES Duties of the BOD are contained in Section 166 of CA 2013. (1) Subject to the provisions of this Act, a director of a company shall act in accordance with the articles of the company. (2) A director of a company shall act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment. (3) A director of a company shall exercise his duties with due and reasonable care, skill and diligence and shall exercise
- 20. . (4) A director of a company shall not involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company. (5) A director of a company shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives , partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company.
- 21. (6) A director of a company shall not assign his office and any assignment so made shall be void. (7) If a director of the company contravenes the provisions of this section such director shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.
- 22. GENERAL DUTIES a) Duty of good faith: The directors must act in the best interest of the company. Interest of the company implies the interest of the present and future members of the company on the footing that company would be continued as going concern.
- 23. b) Duty of care: A director must display care in performance of work assigned to him. He is, however, not expected to display an extraordinary care but that much care which a man of ordinary prudence would take in his own case. (c) Duty not to delegate: Director being an agent is bound by the maxim “delegatus nonpotest delegare.” which means a delegatee can not further delegate. Thus, a director must perform his functions personally. However, he may delegate his in certain conditions.