Company Meetings
Outline
Kinds of company meetings
Statutory report
Meetings of board of directors
Procedure and conduct at general meetings
Company resolutions
Legal conditions of various forms of business organizations
KINDS OF COMPANY MEETINGS
Statutory meeting
Annual general meeting
Extra-ordinary general meeting
Statutory Meetings(Section 157)
First meeting of the members of a public limited company. It is held only once
It is held by every public limited company
limited by shares
limited by guarantee and
private company converted into a public company
Shall be held within a period of not less than 3 months nor more than 6 months
How meeting is convened ?
Annual General Meeting(Section 158)
Every company shall hold a general public meeting of its members every year
Notice of meeting
Place of meeting
Business to be conducted
Consideration and adaptation of the audited annual accounts of company
Declaration of dividends
The election of directors
Appointment of directors
Extra-Ordinary General Meeting(section 159)
“All general meetings other than annual
general meeting and statutory
meeting shall be called
extra-ordinary general meeting”
How the meeting is called?
What should be the purpose
of meeting?
Statutory Report(section 153(3))
Report which is sent by the Board of Directors to all members
Report shall be circulated 21 days before the statutory meeting
The statutory report shall be certified by not less than three directors
One of whom shall be the chief executive of company
Contents of Statutory Report
Brief account of the state of company’s affairs
Total number of shares allotted
Total amount of cash received
Names, address and occupation of directors
Particulars of contract and modification
Extent to which underwriting contacts have been carried out
MEETING OF BOARD OF DIRECTORS
Three ways for carrying out affairs of company by directors
Telephonic conversation
Circular resolution
Board meetings
In board meetings board should explain
Notice of board meeting
Restriction on power of directors
Quorum for board meeting
Minutes of board meetings
Procedure and Conduct at GeneralMeetings
The procedure of holding of general meeting is usually described in the articles of a company.
Company ordinance section 160 provisions related to conduct of company meetings:
Notice of meeting Conduct of business
Quorum Voting and poll
Chairman Voting by proxies
Adjournment of meeting Minutes of meeting
resolutions
Company Resolution
“An item is put before the members of a company in the form of a proposal if it is approved by majority it becomes a resolution”
Types of company resolution
Ordinary resolution
Special resolution
Related Party Transactions: Disclosure & TransparencyPavan Kumar Vijay
It deals with the concept and need of disclosures and transparency in corporate affairs. It further enumerates the provisions of related party transactions and insider trading.
The obligation of a banker to honour his customer’s cheque is extinguished (not accepted or clear) on receipt of an order of the Court, known as the Garnishee order, issued under Order 21, Rule 46 of the Code of Civil Procedure, 1908.
A court order instructing a garnishee (a bank) that funds held on behalf of a debtor (the judgement debtor) should not be released until directed by the court. The order may also instruct the bank to pay a given sum to the judgement creditor (the person to whom a debt is owed by the judgement debtor) from these funds.
If the debtor fails to pay the debt owned by him to his creditor, the latter may apply to the court for the issue of a garnshee order on the banker of his debtor.
The account of the customer with the banker, thus, becomes suspended and the banker is under an obligation not to make any payment thereof.
The creditor at whose request the order is issued is called the judgment creditor; the debtor whose money is frozen is called judgment debtor and the banker who is the debtor of the judgment debtor is called the Garnishee.
The Garnishee order is issued in two parts
The court directs the banker to stop payment out of the account of the judgement-debtor
ORDER NISHI
After the bank file his explanation, if any, the court may issue the final order, called ORDER ABSOLUTE
Company Meetings
Outline
Kinds of company meetings
Statutory report
Meetings of board of directors
Procedure and conduct at general meetings
Company resolutions
Legal conditions of various forms of business organizations
KINDS OF COMPANY MEETINGS
Statutory meeting
Annual general meeting
Extra-ordinary general meeting
Statutory Meetings(Section 157)
First meeting of the members of a public limited company. It is held only once
It is held by every public limited company
limited by shares
limited by guarantee and
private company converted into a public company
Shall be held within a period of not less than 3 months nor more than 6 months
How meeting is convened ?
Annual General Meeting(Section 158)
Every company shall hold a general public meeting of its members every year
Notice of meeting
Place of meeting
Business to be conducted
Consideration and adaptation of the audited annual accounts of company
Declaration of dividends
The election of directors
Appointment of directors
Extra-Ordinary General Meeting(section 159)
“All general meetings other than annual
general meeting and statutory
meeting shall be called
extra-ordinary general meeting”
How the meeting is called?
What should be the purpose
of meeting?
Statutory Report(section 153(3))
Report which is sent by the Board of Directors to all members
Report shall be circulated 21 days before the statutory meeting
The statutory report shall be certified by not less than three directors
One of whom shall be the chief executive of company
Contents of Statutory Report
Brief account of the state of company’s affairs
Total number of shares allotted
Total amount of cash received
Names, address and occupation of directors
Particulars of contract and modification
Extent to which underwriting contacts have been carried out
MEETING OF BOARD OF DIRECTORS
Three ways for carrying out affairs of company by directors
Telephonic conversation
Circular resolution
Board meetings
In board meetings board should explain
Notice of board meeting
Restriction on power of directors
Quorum for board meeting
Minutes of board meetings
Procedure and Conduct at GeneralMeetings
The procedure of holding of general meeting is usually described in the articles of a company.
Company ordinance section 160 provisions related to conduct of company meetings:
Notice of meeting Conduct of business
Quorum Voting and poll
Chairman Voting by proxies
Adjournment of meeting Minutes of meeting
resolutions
Company Resolution
“An item is put before the members of a company in the form of a proposal if it is approved by majority it becomes a resolution”
Types of company resolution
Ordinary resolution
Special resolution
Related Party Transactions: Disclosure & TransparencyPavan Kumar Vijay
It deals with the concept and need of disclosures and transparency in corporate affairs. It further enumerates the provisions of related party transactions and insider trading.
The obligation of a banker to honour his customer’s cheque is extinguished (not accepted or clear) on receipt of an order of the Court, known as the Garnishee order, issued under Order 21, Rule 46 of the Code of Civil Procedure, 1908.
A court order instructing a garnishee (a bank) that funds held on behalf of a debtor (the judgement debtor) should not be released until directed by the court. The order may also instruct the bank to pay a given sum to the judgement creditor (the person to whom a debt is owed by the judgement debtor) from these funds.
If the debtor fails to pay the debt owned by him to his creditor, the latter may apply to the court for the issue of a garnshee order on the banker of his debtor.
The account of the customer with the banker, thus, becomes suspended and the banker is under an obligation not to make any payment thereof.
The creditor at whose request the order is issued is called the judgment creditor; the debtor whose money is frozen is called judgment debtor and the banker who is the debtor of the judgment debtor is called the Garnishee.
The Garnishee order is issued in two parts
The court directs the banker to stop payment out of the account of the judgement-debtor
ORDER NISHI
After the bank file his explanation, if any, the court may issue the final order, called ORDER ABSOLUTE
Companies Act, 2013 - Chapter X - Audit and AuditorsSASPARTNERS
A detailed presentation prepared by SAS Partners Team which gives an insight into the provisions of Chapter X relating to Audit & Auditors. This Chapter has undergone a sea of changes with new concepts introduced. This presentation will prove to be beneficial for the Corporate, Professionals & Students and will give a birds eye view of the provisions and concepts.
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Study on Prospectus according to companies act 1956 and different case studies which would help you understand the provisions well. It's important to look at companies act 2013 for amendments made, so that much more clarity can be obtained.
New Companies Act 2013 has modified many existing sections and inserted many other concepts. This presentation highlights all those Concepts in details.
Companies Act, 2013 - Chapter X - Audit and AuditorsSASPARTNERS
A detailed presentation prepared by SAS Partners Team which gives an insight into the provisions of Chapter X relating to Audit & Auditors. This Chapter has undergone a sea of changes with new concepts introduced. This presentation will prove to be beneficial for the Corporate, Professionals & Students and will give a birds eye view of the provisions and concepts.
Companies Act, 2013-Presentation on Accounts & AuditSASPARTNERS
A detailed presentation prepared by SAS Partners Team, Chennai which gives an insight to the important provisions on Chapter IX - Accounts & Audit under Companies Act, 2013. This can be used by the Corporates, Professionals and Students as a ready reckoner for better understanding of the provisions and easy reference.
Study on Prospectus according to companies act 1956 and different case studies which would help you understand the provisions well. It's important to look at companies act 2013 for amendments made, so that much more clarity can be obtained.
New Companies Act 2013 has modified many existing sections and inserted many other concepts. This presentation highlights all those Concepts in details.
Companies Act 2013 : Loans, Advances and Related Party Transactions (Sec. 185...Chintan N. Patel
Presentation to simplify the important and critical sections of Companies Act 2013 : Sec. 185, 186, 188 on Loans, Advances and Related Party Transactions
An easy way to find the new Companies Act, 2013 with its new and important changes..
Tried to made it maximum simple to understand..
The new legislation will create new avenues for Business and Professionals relating to this field..especially corporate law experts..
Companies Act - Companies Act, 1956 - Features - Types of Companies Act under the Act - Introduction of Companies act 2013 - Structural Comparison - Objectives of the Act - Meaning and Features of the Company - Monitoring and Regulatory Authorities - SFIO - NCLT - Challenges of Companies act 2013 - Provisions of Company Act 2013 -
Here we are covering two major topics which are as follows :
1. Implications of Companies Act, 2013 on Corporate
Governance
2. Implications of Companies Act, 2013 on presentation of
financial statements
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3. When and how did Bill change to Act
December 2004 – J.J. Irani Committee formed to advise on New
Companies Act
Report Submitted on May 2005 and First Companies Bill was placed
before Lok Sabha in 2008 as Companies Bill 2008
Then came Companies Bill 2009, formation of Standing Committee,
Then companies Bill 2010
Then Companies Bill 2011, again Standing Committee
Then Companies Bill 2012 was placed and approved by Lok Sabha on
18th December 2012 and Rajya Sabha on 08th August 2013
PRESIDENT OF INDIA ON AUGUST 29, 2013 SIGNED THE BILL
AND THUS COMPANIES BILL BECOMES
COMPANIES ACT 2013 (18 OF 2013)
2
4. Why Companies Act 2013?
Better Governance
Tighter and wider disclosure norms
More powers in the hands of Shareholders
Roles of Directors defined
Stringent Audits in place
CSR mandated
Special Courts established
Synchronisation with SEBI and other acts
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5. Features
COMPANIES ACT 1956
COMPANIES ACT 2013
13 Parts
29 Chapters
658 Sections
470 Sections
15 Schedules
7 Schedules
Some New Concepts in Companies Act 2013
One Person Company
Small/Dormant Company
Clause Action Suit
Key Managerial Person/Secretarial
Audit
Woman/Resident Director
Rotation of Auditors/Internal
Auditor
Independent Directors
NCLT/Special Courts/NFRA
Corporate Social Responsibility
4
6. One person Company (OPC)
Section 2(62) read with section 3 (1)(c) of the
Companies Act 2013 provides for One Person
Company.
One Single Individual (not artifical) can start a
Company.
Shall be registered as Private Limited ending with
OPC Pvt. Ltd.
MOA to mention name of theof OPC
Advantages Successor
Limited Liability
Single Individual
AGM concept not applicable
Exemptions
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7. Key Managerial Personnel(KMP)
Sec. 2(52) read with sec. 230 of the CA ’13 deals in KMP
Managing Director or CEO or Manager and in their
absence, a WTD
Company Secretary
Chief Financial Officer
Key provisions relating to KMP
Shall be appointed by the Board vide Resolution
Is officer in default
Cannot hold office in more than one company (except MD in 2 co.)
Contravening penalty for Co.- Rs. 1 lakh upto Rs. 5 lakhs for
KMP Rs. 50,000 and Rs. 1000 everyday
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8. Secretarial Audit
Every Listed Company and company belonging to
such other class shall annex with its Board’s report a
Secretarial Audit Report given by a Practicing
Company Secretary
It is an Independent appraisal of the secretarial
practices, system and procedures.
The Directors shall explain in full any qualification in
their report.
Contravening penalty for Co/any officer or PCS Rs. 1
lakh may go upto Rs.5 lakhs
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9. Small/Dormant Company
Small Company Sec. 2(85)
A company other than Public company
Having paid-up capital not more than Rs.50,00,000
Turnover not exceeding Rs. 2,00,00,000
Exception: 1. Holding/Subsidiary companies;2.section 8 co.
•
Dormant Company Sec 455.
A company formed and registered for a future project or hold any assets or
IPR without any accounting transaction may apply for “Inactive Company”
status with ROC who will verify the application and give dormant status
certificate
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10. Auditors
Listed and such other class of companies as may be prescribed –
Rotation of Auditors mandated
Listed company- Individual auditor to retire every five years.
Partnership firm every 10 years.
Other company – To be appointed for a period of five years.
Appointment for every year to be ratified.
Auditors not to provide services such as book keeping, accounting
directly or indirectly to co., its holding and subsidiary too.
Auditing
•
•
Standards
mandatory
along
with
Accounting
Standards
made
Internal Auditor: Mandatory for prescribed Companies
Internal Auditor can be qualified CA, CWA or CS
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11. Independent, Resident & Woman
Director
Maximum of 15 Directors in the Board
Prescribed class to have 1 woman director
Atleast one director shall be a person who has stayed in India for
a period of not less than 182 days in the previous calendar year.
•First time Independent Director
concept introduced in Companies Act,
although it has been in practice since the year 2000.
•Independent
Director’s to follow code as per Schedule IV of
Companies Act 2013.
10
12. Corporate Social Responsibility
Every Company having
Networth of Rs.500 Crores or more (or)
Turnover of Rs. 1000 Crores or more (or)
Net Profit of Rs. 5 Crores of more
• Shall spend atleast 2% of their avg. Net profit in the past three years
for CSR activities
• Activities Listed in Schedule VII of CA 2013.
• Shall mandatorily have a CSR Committee with minimum of three
directors all of whom must be Independent.
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13. Class Action Suit
A provision which enables group of shareholders/depositors to file a
combined case against the company to restrain from a particular act
and/or claim damages/compensation for improper conduct,
misleading statements and fraudulent or illegal acts by the company
or its directors.
•
Based on US model. Class Action suit famous in the United States
with companies like Enron paying upto $7.2 Billion as compensation
some went upto $206 Billion over a period of 25 years.
New concept in India let us we hope that it stands the test of time
and gives us a more efficient and transparent company law regime.
12
14. National Company Law Tribunal/
Special Courts
The Company Law Board is replaced by NCLT.
•
•
All pending cases shall be transferred from CLB to NCLT after it is
notified by Central Government
Cases should be completed by NCLT within 3 months
Cases under NCLT
Arbitration & Compromise
Amalgamation & Reconstruction
•
•
BIFR cases
Winding Up
SPECIAL COURTS: All such violations of the Companies Act 1956 shall
be tried by the Special Courts established for the area in which the
registered office of the company is situated
It may follow Code of Criminal Procedure 1973
13
15. National Financial Reporting Authority
An investigation authority to investigate on its own or by orders of
CG
the Company
Professionals misconducts conducted by members/firms
registered under ICAI
•Exclusive powers to make recommendations on auditing & accounting
policies, monitor and enforce Accounting and Auditing Standards.
•Exclusive
authority to investigate into the misconducts and issue
penalty not less than Rs. 10lakhs or 10times the fee w.e.h.
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16. Quick bites on other provisions
33 New definitions
Financial Year to end only on 31st March every year
Private Limited Company no. of members increased to
200
Associate company, Fraud defined
No more bifurcation of Main object, Ancillary object,
Other object. A Co. cannot give other object clauses.
Maintenance of Accounts in Electronic Form
Scope of Annual Returns huge.
15
17. Quick bites on other provisions
No change in Managerial remuneration limits
Nomination and Remuneration committee, Stake
Holder relationship committee mandated
No stock option for Independent Directors
Courier mode recognised
Cross border amalgamation recognised
Insider Trading Introduced
Secretarial Standards mandated
Registered valuers defined
16