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 Learning objectives

In this chapter, you will learn about the following:

  • Different kinds of shareholder and board meetings
  • Methods of participation and voting in meetings
  • Procedural requirements such as quorum and notice in meetings

Meetings are a very important aspect of corporate governance of any company. Significant corporate decisions are required to be made in meetings of board of directors or shareholders. For instance, directors of the company, auditors, managing director etc. are appointed through shareholders’ meeting, often called general meetings. Resolutions passed at these meetings make statutory and other important appointments, record important decisions (some corporate decisions are specifically required to be passed as board resolutions by simple or special majority), and authorise various persons to undertake actions on behalf of the company.  In reality, many decisions are made before hand by key decision makers in a company, and are recorded and formally passed at a board or general meetings.


In small companies which are closely held by a few shareholders, such as startup companies in early phases, holding such meetings are mere matters of formality - however, such meetings must be conducted and minutes must be recorded for the purpose of complying with the law. Sometimes, in practice, no real meetings take place but company secretary or CA of the company prepares necessary resolutions and meetings and have such documents signed by all the shareholders/ directors for the purpose of compliance with the law.

A short mindmap explaining the different kinds of meetings is provided below:



Shareholders’ meetings

Shareholders make appointments, vote on matters presented before it, and often hear various reports and present questions to board members and officials with respect to the business of the company. Voting is a very important feature of a shareholders’ meeting. By default, voting is undertaken by a show of hands at these meetings, where each shareholder can give one vote, irrespective of how many shares he owns. However, if 10% of the shareholders demand, the chairman is required to take a poll where the voting would be proportionate to the shareholding.
It is important to know about different types of shareholders meetings and which ones are necessary for private companies and which for public companies. 

A. Statutory Meeting (applicable only for public company):

A public company is required to hold a statutory meeting between one to six months from the date that it is entitled to commence business, that is, the date of the certificate of commencement of business.

Purpose of meeting:
In a statutory meeting, the following matters only can be discussed:-
  1. Floatation of shares / debentures by the company
  2. Modification to contracts mentioned in the prospectus
  3. Note: Since law relating to public companies is not relevant for general start-up companies and early stage entrepreneurs, we would keep discussion with respect to corporate governance of public companies limited to bare a minimum in the compulsory component of the course.  

B. Annual General Meeting (AGM) (to be held by both public and private companies)


Once every year. Not more than 15 months should elapse between two annual general meetings. A one person company is not required to hold an annual general meeting, as per the Companies Act, 2013

Under the 1956 Act, the first AGM may be held within 18 months from the date of its incorporation. Under the 2013 Act, the first AGM can be held within 9 months from the close of the first financial year (i.e. within 9 months from 31st March, which is 31st December). Any other AGMs  must be held within 6 months from the close of that financial year. Hence, a company incorporated in 2010 must hold its AGM (for the financial year ending on 31st March 2013) latest by 30th September 2013.
This first AGM suffices for compliance purposes for the year of its incorporation as well as in the following year. For each subsequent year, an AGM must be held by every company.

Extension of time period:
In case there is any difficulty in holding any annual general meeting (except the first annual meeting), the ROC may grant a 3 month extension. An application for extension must be made before the due date of the annual general meeting.

However, delay in the completion of the audit of the annual accounts of the company is not treated as "special reason" for granting extension of time for holding its annual general meeting. If accounts are not audited at the time of holding the AGM, the meeting is convened and held at the proper time, and all matters other than the accounts are discussed. All other resolutions are passed and the meeting is adjourned to a later date for discussing the final accounts of the company. However, the adjourned meeting must be held before the last day of holding the AGM.

Issuing Notice for AGM
A notice of at least 21 days before the meeting must be given to members unless consent is accorded to a shorter notice by members, holding not less than 95% of voting rights in the company. The notice must state that the meeting is an annual general meeting. The time, date and place of the meeting must be mentioned in the notice. Even an electronic notice is permitted, as per the new Companies Act, 2013.
The notice of the AGM must be accompanied by a copy of the annual accounts of the company, the director’s report on the position of the company for the year and auditor’s report on the accounts.


NOTE: The director’s report is prepared pursuant to Section 217 of the Companies Act. It contains details relating to the company’s business (or the business of its subsidiaries), material changes affecting the financial position of the company in the year for which the accounts were prepared, and information relating to technology absorption, foreign exchange earnings, etc.

Proxy voting
If a member is not able to attend a meeting, he may nominate another person to attend and vote on his behalf. Such a person is known as a proxy. Companies should state in the notice that a member is entitled to attend and vote at the meeting and is also entitled to appoint proxies in his absence. A proxy need not be a member of that company. A proxy form should be enclosed with the notice. The proxy forms are required to be submitted to the company at least 48 hours before the meeting.

In practice, while proxy voting is not uncommon in private companies – they are more used in public companies. In startup companies, investors, especially foreign investors appoint there lawyers or auditors or any other representatives as proxy to appoint meetings formally on behalf of them.A proxy does not have right to speak at the meeting and must act in the way specified by the shareholder on whose behalf the proxy will be attending.

Place for AGM
The AGM must be held on a working day which is not a national holiday during business hours (i.e. between 9 a.m. to 6 p.m.) 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. The Central Government may, however, exempt any class of companies from the above provisions. If any day is declared by the Central Government to be a public holiday after the issue of the notice convening such meeting, it will still be treated as a working day.

Time of meeting
A company may, by appropriate provisions in its articles, fix the time for its annual general meeting and may also by a resolution passed in one annual general meeting fix the time for its subsequent annual general meetings.

Section 25 companies (called Section 8 companies under the 2013 Act): Companies licensed under Section 25/Section 8 are exempt from the above provisions provided that the time, date and place of each annual general meeting are decided upon beforehand by the Board of Directors having regard to the directions, if any, given in this regard by the shareholders in general meeting.

Consequences of default in holding AGM

1. Member’s right to apply to Company Law Board (CLB) / National Company Law Tribunal (NCLT) under the Companies Act 2013 (provisions related to NCTL have not been notified as of 1 May, 2015), for holding meeting:

In case of default in calling the AGM, any member of the company may apply to the Company Law Board / NCLT for calling a meeting. The Company Law Board / NCLT (as the case may be) may call, or direct the calling of the meeting, and give such ancillary or consequential directions as it may consider expedient in relation to the calling, holding and conducting of the meeting. The Company Law Board may direct that one member present in person or by proxy shall be deemed to constitute the meeting. A meeting held in pursuance of this order will be deemed to be an annual general meeting of the company.

Process of making application to CLB: An application by a member of the company for this purpose must be made to the concerned Regional Bench of the Company Law Board by way of petition in Form No. 1 in Annexure II to the CLB Regulations with a fee of rupees fifty accompanied by (i) affidavit verifying the petition, (ii) bank draft for payment of application fee.

2. Fine payable by company and its officers:
Fine which may extend to Rs. 5,000 (Rs. 100,000 under new act) on the company and every officer of the company who is in default may be levied and for continuing default, a further fine of Rs. 250 (Rs. 5000 under the new act) per day during which the default continues may be levied.

Business to be transacted at AGM
Ordinary business: At every AGM, the following matters must be discussed and decided: (Since such matters are required to be discussed at every AGM, they are known as ordinary business. All other matters and business to be discussed at the AGM are considered special business under law.)
  1. Consideration of annual accounts, director’s report and the auditor’s report
  2. Declaration of dividend
  3. Appointment of directors in the place of those retiring
  4. Appointment of and the fixing of the remuneration of the statutory auditors.
Special business:
If any other business is proposed to be discussed and decided upon, it shall be regarded as special business. In such an event, an explanatory statement of the special business must also accompany the notice calling the meeting. The notice and explanatory statement of AGM should indicate the nature and extent of the interest of the directors or manager in the special business.

If approval of any document has to be done by the members at the meeting, the notice must also state that the document would be available for inspection at the Registered Office of the company during the specified dates and timings.

 Extraordinary General Meeting
Every general meeting (i.e. meeting of members of the company) other than the statutory meeting and the annual general meeting is an extraordinary general meeting. Such meeting is usually called by the Board of Directors (or by members holdings one-tenth of the share capital) for some urgent business which cannot wait to be decided till the next AGM and needs action on behalf of the shareholders.

Every business transacted at such a meeting is special business. An explanatory statement of the special business must also accompany the notice calling the meeting. The notice should also give the nature and extent of the interest of the directors or manager in the special business, as also the extent of the shareholding interest in the company of every such person. In case approval of any document has to be done by the members at the meeting, the notice must also state that the document would be available for inspection at the Registered Office of the company during the specified dates and timings.

The Articles of Association of a Company may contain provisions for convening an extraordinary general meeting. For instance, it may provide that “the board may, whenever it thinks fit, call an extraordinary general meeting” or it may provide that “if at any time there are not within India, sufficient number of directors capable of acting to form a quorum for a board meeting, any director or any two members of the company may call an extraordinary general meeting.”

EGM on requisition of shareholders:
The members of a company have the right to require the directors to call an EGM. The board of directors of a company must call an extraordinary general meeting if required to do so by members of the company holding at least one-tenth of the voting rights on the matter that is proposed to be discussed at the meeting.

Contents and manner of requisition:
The requisition must state the objects of the meetings and must be signed by the requisitioning members. The requisition must be deposited at the company's registered office. When the requisition is deposited at the registered office of the company, the directors should within 21 days, move to call a meeting and the meeting should be actually be held within 45 days from the date of the lodgement of the requisition. If the directors fail to call and hold the meeting as aforesaid, the requisitionists or any of them meeting the requirements at (a) or (b) above, as the case may be, may themselves proceed to call meeting within 3 months from the date of the requisition, and claim the necessary expenses from the company. The company can make good this sum from the directors in default. At such an EGM, any business which is not covered by the agenda mentioned in the notice of the meeting cannot be voted upon.

Power of CLB (under 1956 Act) / NCLT (under 2013 Act) to call an EGM

If for any reason, it is impracticable to call, hold or conduct a meeting of the company, members or directors of the company may approach the Company Law Board / NCLT under the 2013 Act to order a meeting to be called and conducted as the Company Law Board / NCLT thinks fit. An application by a director or a member of a company for this purpose is required to be made to the Regional Bench of the Company Law Board before whom the petition is to be made in Form No. 1 specified in Annexure II to the CLB Regulations with a fee of Rs 200 (provisions related to NCTL have not been notified as of 1 May, 2014). The petition must be accompanied with the following documents -
  1. Evidence in proof of status of the applicant.
  2. Affidavit verifying the petition.
  3. Bank draft evidencing payment of application fee.
Memorandum of appearance with copy of the Board's resolution or executed vakalatnama, as the case may be.

D. Class Meetings

Class meetings are meetings which are held by holders of a particular class of shares, e.g., preference shareholders or equity shareholders. Meetings of debenture holders or creditors may also be called. Such meetings are normally called when it is proposed to vary the rights of that particular class of shares or to come to a compromise or arrangement.
At such meetings, these members discuss the pros and cons of the proposal and vote accordingly. Class meetings are held to pass resolution which will bind only the members of the class concerned, and only members of that class can attend and vote.


Every set of shareholders who have different terms for their shares constitute a class. For example, holders of preference shares will constitute a different class from those who hold convertible preference shares.


Assume that a company has issued 1000 debentures of INR 500 each, carrying 12% interest. Its total liability on the principal amount of debentures is INR 500,000. It may offer to convert 1 debenture of INR 500 into 20 equity shares of INR 10 each, and treat the remaining INR 300 per debenture as debt, on which it will pay 7%. This is an example of variation of the rights of debenture holders, and is often used by companies to reduce their aggregate debt and interest liability (in this case, the debt has been reduced to INR 300,000 and interest liability to 7% per annum). 

Variation of class rights requires consent of a prescribed majority of the members of that class, which, in this case will be 75% of the holders of debentures of INR 500. A similar kind of restructuring had been attempted when Kingfisher Airlines was unable to pay its debts. The restructuring group was led by the State Bank of India, which was its largest creditor.

Procedure at class meetings:
Unless the articles of the company or a contract binding on the persons concerned otherwise provides, all provisions pertaining to calling of a general meeting and its conduct apply to class meetings in a similar manner.

E. Board & Committee meetings
A board usually meets at least once in every quarter and more if required. As per the 1956 Act, a board meeting is to be held once in every three months and at least four board meetings must take place in a year.
As per the 2013 Act, although the number of board meetings in a year is kept the same at four, the first board meeting must be held within 30 days of the date of incorporation and the maximum gap between two board meetings cannot exceed 120 days (this gap was 90 days earlier). Directors can participate either in person or through video conferencing or any other audio-visual means that are permitted by rules.
All matters of business, usually in gist, should be reported to the board. All incidents, financial matters, litigation, approvals and licenses, property related matters etc. that can affect the business of the company, profitability or financial health, financial targets and performance, business strategy is normally brought up before the directors or reported in board meetings and discussed. The board also decides on policies to be followed by the company, various departments and employees.
A board may often constitute various committees comprising its members to study and make recommendations on specific aspects of the business. For example, most companies have an Audit Committee and Remuneration Committee, at least once they are funded. Listed companies are constitute certain committees mandatorily as per the Listing Agreement. The Board of Reliance Industries Limited has a Health, Safety and Environment Committee, Finance Committee, a Corporate Governance and Stakeholders Interface Committee as well. See here
Minutes of shareholder, board and committee meetings

Minutes of all meetings (whether at the shareholder, board or committee level) must be recorded and maintained at the registered office. Minutes must be prepared within 30 days and confirmed by the chairman of the meeting with his initials on each page of minutes and entered into the minutes book kept at the registered office. Any member of the company should be able to inspect such minutes book on request.

Apart from board meetings, all of the above rules with respect to minutes equally apply to general meetings as well. For failure to maintain minutes book in a proper way or making it available for inspection on requirement, officers responsible for the maintenance of the minutes such as managing director, company secretary or any other person authorised by the board for this purpose through a resolution will be liable to be fined under the Companies Act.
During due diligence exercises on a company these minutes, along with resolutions passed by the board provide great insights on the standing of the company as well as legal issues faced by it if any.
Resolutions by circulation

Apart from physical meetings, board may also pass resolutions by circulation.
As per 175 of the Companies Act, 2013, a resolution intended to be passed by circulation:
  • must be circulated in draft, together with the necessary papers (if any) to all directors or committee members (which must be at least the number that qualifies as the quorum for the meeting of the Board/ committee), at their usual address in India, by hand delivery, post or through electronic means (for example, email or fax)
  • and must be approved by a majority of  the directors or members, as are entitled to vote on the resolution.
  • A resolution cannot be passed by circulation if one-third of the directors want such resolution want such resolution to be passed at a Board meeting.
Regulation 75 of Table F states that resolutions in writing, signed by all board or committee members entitled to receive notice of the board/ committee, shall be treated as though they were passed at meeting of the board/ committee, except where the Companies Act expressly provides otherwise. Secretarial Standard 1 (SS-1) (earlier SS-17) illustratively lists out certain methods on which decisions cannot be taken by circulation. (Please note, new secretarial standards will be applicable from 1st July 2015. Click here to download the new secretarial standard).
As per SS-1, the Chairman of the Board or in his absence the managing director or in his absence, the Whole time Director, and where there is none, any director other than the interested director should decide whether the approval of the Board for a particular business should be obtained by means of a resolution by circulation.
Procedure for recording resolutions: Resolutions passed by circulation should be noted at the next meeting of the Board or Committee, as the case may be, and the decision recorded in the minutes of such meeting. The minutes should record the text of the resolution passed, and dissent, if any.

Alternate methods of holding meetings
  • Postal ballot

As per Section 110 of the Companies Act, 2013 any company (except a one person company and other companies having less than 200 members) has the option to get shareholder resolutions passed not in a meeting, but by postal ballot. Further, in case of specific matters specified by Central Government, resolutions must mandatorily be passed by postal ballot and not in a general meeting. 

In order to pass a resolution by resorting to postal ballot, a company must send a notice to shareholders with a draft resolution explaining the reasons for it, requesting their consent or dissent in writing on a postal ballot (or through electronic means) within thirty days from the date of posting the letter.

A resolution passed by the requisite majority by a postal ballot is deemed to have been duly passed at a general meeting.

Note: Postal ballot can be used only for passing shareholder resolutions, and not for board resolutions. Board resolutions can be passed by using electronic methods (see below), passing resolution by circulation or by holding physical meetings.

  • Electronic methods
Video conferencing facility is neither mandatory for general meetings nor accepted for the purpose of quorum. However, the Companies Act, 2013 allowsboard meetings to be conducted through video-conferencing. It is, however, a viable option for all companies and a good option for start-ups having directors in different countries.

Procedure for voting through electronic medium (in a general meeting)

It is mandatory for allcompanies having more than 1000 members (except those listed on the SME platform or the SME ITP platform (under Chapter XB and Chapter XC of the SEBI ICDR Regulations, 2009)to allow voting through electronic medium (including remote e-voting). However, the Companies Act, 2013 does not recognise an AGM to be conducted through video-conferencing, however, for the purpose of convenience of the shareholders who will be casting their votes through electronic medium.
Some of the key pointers that must be kept in mind while conducting the electronic vote are as follows (applicable from 19th March, 2015):
  1. Voting by showing of hands will not be allowed where the voting must be conducted through electronic votes (though voting through ballot or polling paper is allowed for those present in the general meeting and have not voted through remote e-voting).
  2. Where a member has voted through electronic mechanism, he will still be allowed to participate in the general meeting physically. However,he will not be allowed to cast his vote in the meeting again.
  3. Voting must be conducted through a medium which have reasonable security procedure (through intermediaries which have obtained relevant security certificates) that allows display and recording of the votes of the members in an appropriate manner.
  4. The notice of the voting must inform the shareholders regarding availability of participation through electronic medium, and provide necessary information to enable them to access electronic voting facility.
  5. On completion of dispatch of notice, an advertisement must be made in a vernacular newspaper in the principal language of the district where the registered office is situated and in an English newspaper having country-wide circulation atleast 21 days before the general meeting.
  6. Remote electronic voting must be open for a period of atleast three days and such facility shall be closedat 5.00 PM on the day before the general meeting.
  7. An independent scrutiniser (who is a CA, CS, Cost Accountant or an Advocate or any independent person of repute) who is not in employment of the company must be appointed by the Board of Director to scrutinise the e-voting process in a fair and transparent manner.
  8. The scrutiniser should make a scrutiniser report within three working days and submit it to the Chairman or any person authorised by him. The scrutiniser will have in his custody all the documents and register related to such voting with him, till the Chairman approves and signs the minutes.
  9. Once the resolution has been passed, the result of such voting along with the scrutiniser’s report should be published on the website of the organisation, agency (whose secured platform has been used to conduct e-voting)and stock exchangewhere the shares of the company are listed (if applicable)immediatelyafter the result is declared by the Chairman.
Procedure for holding Board meetings electronically

Board and committee meetings can now be held through electronic mode, i.e. video-conference facility pursuant to Section 174 of the Companies Act 2013. Some of the key features of the same are mentioned below:
  • Every director must personally attend at least one board or committee meeting (as applicable) in a financial year.
  • A director participating through video-conferencing will be counted towards quorum.
  • The notice of the meeting must i) inform directors regarding availability of participation through video conference, ii) provide necessary information to enable directors to access videoconferencing facility, and iii) seek confirmation on whether the director will attend physically or through electronic mode. In the absence of any confirmation from the Director, it will be presumed that he will physically attend the Board meeting.
  • The Chairperson should take a roll call of all the directors who are participating via video conferencing at the start of the meeting. The Chairman should also record the name, location from where the director is participating, ensuring that those directors have received the agenda and necessary materials of the meeting, and to confirm that no other person have access to the meeting.
  • Statutory registers must be available for inspection where the Chairman or Secretary is sitting in case of an electronic meeting.
  • The Chairman will announce the summary of decisions taken at the meeting at the end and the names of directors who assented/ dissented from the decisions. A video recording of this part must be taken and preserved for at least before the completion of audit of that particular year. This must be followed by circulating draft soft copy of minutes within a maximum of 15 days of the meeting, and the directors must give the confirmation of the same within 7 days or any other reasonable period decided by the Board, after which they shall be entered in the minutes book as per Section 118 of the Companies Act, 2013.
  • A company cannot deal with the following issues in a Board meeting held through video conferencing:
    • approval of annual financial statements
    • approval of the Board’s report
    • approval of the prospectus of the company
    • meeting of the Audit Committee for consideration of financial statements including consolidated financial statements
    • approvals with matters related to amalgamation, merger, demerger, acquisition and takeover
  • Shareholders’ meetings – Unless articles provide a higher number, quorum for general meetings is as follows:
    • Private company – 2 members
    • Public company –
a) 5 members (if the number of members is less than 1000)
b) 15 members (if the number of members is more than 1000 less than 5000)
c) 30 members (if the number of members is more than 5000)
  • Board meetings - The quorum for a meeting of the Board of directors of a company shall be one-third of its total strength (any fraction contained in that one-third being rounded off as one), or two directors, whichever is higher. Directors participating by video conferencing or other audio visual tools will also be counted for the purpose of quorum, as per the new Companies Act 2013. If the number of interested directors is two-thirds or more of the total strength, the remaining directors (who are not interested) present at the meeting (not less than 2) shall be the quorum during such time.
  • Interested director means any director whose presence cannot, by reason of his being interested in some manner in the subject matter of discussion be counted for the purpose of forming a quorum at a meeting of the Board, at the time of the discussion or vote on any matter.
  • Committee meetings – Depends on the provision of the articles. Minutes of committee meetings are required to be maintained in the same way as minutes of board meetings and have to be made available at the registered office for inspection by any member.

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