Company law


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detailed view of meetings, shareholder meetings, proxies, resolutions etc..

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Company law

  1. 1. COMPANY LAW Presented by: Arslan Asif UNIVERSITY OF LAHORE Lahore school of accountancy and finance
  2. 2. Topic to be discussed • Meetings • Characteristics • Company meetings • Statutory • Annual General Meeting • Extra Ordinary General Meeting • Quorum for the meeting • Proxies • Resolutions • Ordinary Resolutions • Special Resolutions • Political contributions by the company • Gifts distributions by the company
  4. 4. MEETING “Any gathering, assembly or coming together of two or more persons for the transaction of some lawful business of common concern is called meeting.”
  5. 5. CHARACTERISTICS OF MEETING Two or more persons required For some lawful business Notice for intimation Specified date, place and time Company’s meetings governed by provisions of company’s act
  6. 6. COMPANY MEETINGS Shareholders meetingsShareholders meetings Statutory Meeting Annual General Meeting Extra Ordinary General Meeting
  8. 8. STATUTORY MEETING  First meeting of members of PUBLICPUBLIC limitedlimited companycompany  Held only once in the life of company  Meeting must be held after 3 months and before 6 months from the date of entitlement to commence business  Business of meeting is to consider “statutory report”  Statutory report should be sent to each member at least 21 days before the statutory meeting  Statutory report contains brief account of the state of company’s affairs since its corporation and business plan
  9. 9. CONTENTS OF STATUTORY REPORT • Conveyed by the directors to each member at least 21 days before meeting • INCLUDES • 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 • Report shall be certified by chief executive and two directors • Report should be accompanied by an auditor’s certificate in respect of cash received against shares and receipts and payment of company • 5 copies of report must be filed to the registrar
  11. 11. ANNUAL GENERAL MEETING  Must be held every year  Must be held by every type of company, public or private, limited by shares or by guarantee, with or without share capital or unlimited company, once a year  The first AGM is to be held within eighteen months of incorporation  Every subsequent(coming) AGM is to be held within four months of the closing of the company’s annual financial year or 15 months from the last meeting whichever is earlier  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  The gap between two AGMs should not be more than fifteen months  In case of default in complying with any of these requirements all officers to such default shall be held liable
  12. 12. 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. 13. Extra Ordinary General Meeting (EGM)
  14. 14. Extra Ordinary General Meeting 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 following ways: Calling of EGM by Directors Calling of EGM by Directors on request of members
  15. 15. Extra Ordinary General Meeting 1.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 and can’t be postponed till general meeting 2. 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
  16. 16. Extra Ordinary General Meeting Requirements of Calling Extra Ordinary General Meeting on the Requisition of Members •The requisition shall state the objects of the meeting. •It will be signed by the requisitionists. •The requisition will be deposited at the registered office of the company •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 •The meeting so called shall be held within three months from the date of depositing such requisition. •The meeting will be called in the same manner as the meetings are called by directors •Expenses of the meeting shall be borne by the company
  18. 18. QUORUM FOR THE MEETING Quorum is the minimum number of members required to attend a meeting and transact business validly. In other words, it is the minimum number of members who must be present at a meeting for the purpose of transacting business validly Provisions relating to quorum: In case of single member company  The single member present in person or proxy In case of Listed company  Ten members, personally present, representing 25% voting powers either on their own account or as proxies in meeting In case of any other company  Two members, personally present, representing 25% voting powers either on their own account or as proxies in meeting
  19. 19. PROXIES
  20. 20. PROXIES Proxy is the person appointed to vote and speak on behalf of a member in General meeting of a company A member can’t appoint more than one proxy A proxy must be a member unless article declare a non-member as a proxy Proxy can speak and vote at meeting Proxy can demand a poll Proxy can abstain from voting
  21. 21. Resolutions
  22. 22. Resolutions Decisions of a company are made by resolutions passed by the prescribed majority of the members present at the meetings or also called the collective decision of the members in a general meeting Resolutions are of 3 kinds 1.Ordinary Resolution 2.Special Resolution 3.Resolutions requiring special notice
  23. 23. Ordinary Resolutions A resolution, which requires simple majority of the members entitled to vote and voting in person, or where proxies are allowed, by proxy, is called an ordinary resolution. Some of the Ordinary resolutions:  Issue of shares at discount  Alteration of share capital  Adoption of statutory report  Passing of annual accounts and B/S, along with reports of board of directors and auditors.  Appointment of auditors and their remuneration
  24. 24. Ordinary Resolutions A special resolution is one passed at a general meeting of a company when: •Not less than twenty one days notice has been given •The notice specifies the intension to propose the resolution as special resolution •By a majority of the three fourth of such members entitled to vote as are present as proxy Some special resolutions:  Alteration of object clause of memorandum  Change of name of a company with consent of central govt.  Alteration of the articles of a company.  Variation of shareholders rights.  Payment of interest out of capital.
  25. 25. Resolution Requiring special notice • Provision in this act or in the articles, special notice is required • Notice of the intension to move the resolution shall be given to the company not less than 14 days before the meeting • The company must give to its members- notice • Advertisement in a newspaper
  27. 27. POLITICAL CONTRIBUTIONS A company cannot contribute and donate any amount to the following: Any political party Any political leader A person contesting an election In case of contravention a fine not exceeding of rupees 500000 may attract for every defaulting officer of the company
  29. 29. GIFTS DISTRIBUTIONS Companies are prohibited from distributing any gifts to its members in meetings of the company. In case of contravention fine not exceeding of Rupees 500000 may attract to every defaulter officer of the company.