1. GROUP P2

2.  Meeting :
Coming together of certain minimum number of
people for transacting the business included in the
agenda.
 Meetings of shareholders
a) Statutory meeting
b) Annual general meeting
c) Extraordinary general meeting
d) Class meetings
 Meetings of Directors and committees
 Meetings of creditors and debenture holders

3. Time of meeting:
 First meeting of members of a company after its
incorporation
 Company limited by shares, or limited by guarantee
and having a share capital are required to hold a
statutory meeting.
 Meeting must be held within a period of 1-6 months
from the date company is entitled to commence
business.

4. Purpose of statutory meeting
 Acquaint shareholders about the success of company
including its financial position and prospects.
Legal provisions about statutory meetings
1. Notice and Report
The board of directors is required to send a notice of
statutory meeting along with the statutory report at least
21 days before the meeting.
2. Filing of statutory report with Registrar when notice if
meeting is dispatched.
3. List of members must be kept at meeting for inspection.
4. Statutory Report
5. Procedure at the meeting

5. Consequences of default of statutory meeting
 Punishment with fine up to Rs. 5000 for every Director
and officer-in-default.
Annual General Meeting – Section 166
 Held every calendar year
 Objective is to inform members about the progress of
the company.

6. 1. The first AGM
Must be held once in each calendar year.
First meeting must be held within 18 months of
incorporation of the company.
The first AGM must be held not later than 9
months from the date of close of financial year.
2. Subsequent annual general meeting
Must be held within 6 months of the close of financial
year
Interval between 2 meetings must not exceed 15 months.
Though it may be extended to 18 months by the Registrar.

7. 3. Time and place of the meeting
 Held at registered office at the company or at some
other place in the same city, town or village in which
the registered office of the company is located.
 Must be held during business hours on a day which is
not a public holiday.
AGM can be held on a public holiday if:
 Public holiday is declared after issue of notice of
meeting.
 If the meeting is adjourned due to lack of attendance,
it has to be held on the same day in the next week at
the same time irrespective of it being a public holiday.

8. 4. Proper Authority
The board of Directors is the proper authority to convene
an AGM.
5. Notice
A notice of minimum 21 clear days needs to be given in
writing.
6. Business transacted at the AGM
Ordinary Business:
According to Section 173, AGM is held to transact :
a. Consideration of annual accounts, balance sheets and
reports of the board of directors and auditors.
b. Declaration of dividends
c. Appointment of directors in place of those retiring.
d. Appointment and fixation of remuneration of auditors.

9. Special Business:
 Any business other than ordinary business
conducted at the AGM is deemed to be special
business.
 For any special business to be transacted, the notice
of the meeting shall contain a statement of the facts
including the nature and extent of interest of every
director and manager.
 For any meeting other than AGM, all business is
deemed to be special business.

10.  Central Government holds power to direct the
holding of AGM
 Penalty till Rs. 50,000 & Rs. 2,500 per day after the first
day of continuing default

11. Meetings may be called:
• By the board of directors
• By the directors on Requisition
• By the Requisitionists themselves
• By the tribunal

12.  Proper Authority
 Proper Notice –
 Notice to Whom?
 Contents of the notice
 Business at the AGM – Ordinary/Special
 Length of Notice
 Mode of Notice
 No Notice of adjourned meeting
 Notice of the right of a member to appoint proxy

13.  Proper Quorum
 Time for the quorum to be present
 Cases where a single person shall be the quorum
 Chairman of the meeting
 Proxies
 Voting
 By show of hands
 By poll

14.  Who can demand poll?
 In case of public company having a share capital
 In the case of private company having a share capital
 In the case of any other company
 Time for Taking Poll
 Manner of Poll
 Voting on shares held in trust

15.  Resolutions
 Ordinary Resolution – Passed by majority of share
holders entitled to vote in person or proxy
 Special Resolution – Is necessary in case of important
matters affecting the constitution, administration and
other affairs of the company
 Resolution Requiring Special Notice – Type of ordinary
resolution where the proposer has to give 14 days special
notice before the meeting
 Resolution by Postal Ballot – To ensure widest
participation of share holders in key decisions of the
company

16. The request can be made by
 Members holding not less than 1/20th of total voting
power of all the members entitled to vote
 Not less than 100 member and holding paid up capital
of at least 1 lakh rupees
Requisition to be deposited at the registered office
 At least 6 weeks before the meeting in case of a
requisition requiring notice of resolution
 At least two weeks before the meeting in case of any
other resolution

17. Minutes
 Written record of proceedings, business transacted &
decisions taken at company meetings.
Minutes Book
 Entries of proceedings to be made here
 Separate Minutes Book for shareholders meetings &
Board of Directors meetings.
 To be kept open to inspection by members for at least
2 hours daily free of charge.

18.  Meetings of Directors
 Meetings of creditors otherwise than in winding up in
accordance with the provisions of Section 391 to 393
 Meetings of debenture holder

20.  Who is a director?
A person who has control over the direction,
governance, policies or superintendence of
affairs of a company
 Number of directors
 Public company-At least three
 Private company- Minimum two

21.  Directors as trustee
Manage company assets and property and power vested in
them
 Directors as agents
Not liable for contracts made in the name/behalf of company if
within scope of authority
 Directors as managing partners
Manage company for themselves as well as benefit for others

22.  Directors as employees
 Hold office of profit or salaried employment
Can be whole time or part-time employment
 Directors as officers
 Treated as officers
 Liable to certain penalties for failing to comply with
provisions of the company act

23.  Appointment by articles
 Appointment by the company act
 Appointment by the Board
 Appointment by third party
 Appointment by the central government
 Appointment by proportional representation
 Appointment by small shareholders
 Appointment of special director by the tribunal in case of
sick industrial companies

24.  A board set up by every public company with paid up
capital of five crore and above
 Consist of at least three directors
Other provisions
 Composition shall be disclosed in the annual
report of the company

25.  By shareholders
 By the central government
 By the tribunal

26.  Share qualification
 Hold at least one share in the company
 Shares may be held as trustee, or jointly, or gifted
 Statutory restrictions on the appointment of a director
 Sign and filed with registrar his consent in writing
to act as director
 Sign the memorandum for his qualification share

27. The following persons are disqualified from the
appointment:
 A person of unsound mind
 An undischarged insolvent
 A person convicted by the court of law
 A person who failed to pay calls on his share
 A director of a public company who has not filed
annual accounts and returns for three years

28. A director will be liable to vacate his office in the
following circumstances:
 If he fails to obtain the qualification share within two
months
 Adjudged to be of an unsound mind
 Adjudged an insolvent
 Convicted by the court of law
 Absent for three consecutive board meeting or from all
board meeting for three months
 Fail to disclose his interest in a contract
 Disqualified by an order of court for fraudulent
conduct

29.  No provision in the company act relating to
resignation
 May resign any time by giving a reasonable notice
 Resignation should be given in writing
 Resignation cannot be revoked
 Company file necessary return of change in the board
within 30 days

30.  General powers of the board:
 Entitled to exercise all powers and acts the company is
authorized to do
 Powers of the board are co extensive
 Limitations
 Cannot exercise power to be exercised by the
shareholders in the general meeting
 Must exercise power in consonance with the provision of
the Act, Memorandum and Articles

31.  Make calls on shareholders
 To issue debentures
 To borrow money otherwise than on debentures
 To invest in the funds
 To make loans to authorized to buy back the share
 Recommend the rate of dividends
 Filling the causal vacancies
 Making of political contribution

32. Powers executed only with the consent of the shareholders
 To sell, lease or dispose the undertaking of the
company
 To remit or repay the debt due to the company by a
director
 To invest the amount of compensation received by the
company on compulsory acquisition
 To borrow money in excess of aggregated paid up
capital and free reserves

33.  Restrictions on political contribution
 Restriction on appointment of sole-selling agents
 Restriction on contracts in which directors are
interested
 Restriction on loans to director
 Prohibition of assignment of office
 Prohibition of appointment to office of profit

34.  Directors acting malafide
 Incompetent board
 Deadlock in management
 Residuary powers

35.  Number of board meeting
 Notice
 Agenda
 Quorum
 Resolution by circulation
 Procedure of conducting the business at board
meeting

36.  Disclosure of interest by directors
 Effect of non-disclosure
 Interested director not to participate or vote in the
board’s proceedings
 Register of contracts in which directors are interested
 Disclosure of directors in contracts appointing
managers/managing directors

37.  General duties
 Duties of good faith
 Duty of reasonable care
 Duty to attend board meeting duty not to delegate
 Duty to disclose interest

38.  Statutory duties : duties imposed by the company act
 To deposit share application money in the scheduled bank
until the receipt of certificate to commence business
 To call extraordinary general meeting on requisition of the
members
 To lay before the AGM the balance sheet and P&L account
 To make a declaration of solvency in the case of members
voluntary wind up
 To file return of allotment within 30 days
 To authenticate and approve financial statements
 To appoint cost auditor of the company

39. A. Civil liability
• Liability to outsider
 When the contract in the directors name than the company
 When contract is outside scope of his authority
 Making irregular allotments of share
 Issue of prospectus containing untrue statement
 When the director found fraudulent
• Liability to the company
 For ultra vires act
 For negligence
 For breach of trust
 For misfeasance
 For fraudulent conduct of business
 For breach of statutory duties

40. B. Criminal liability of the director
 Issue of prospectus containing untrue statement
 Failure to application money in a scheduled bank
 Failure to complete and deliver certificates of shares
within 3 months
 Failure to maintain register of charges
 Failure to file annual return within 60 days
 Failure to hold annual general meeting

41. The following registers relating to directors shall be
maintained by a company:
 Register of contracts and companies in which directors
are interested
 Register of directors , managing directors etc
 Register of directors’ shareholdings

42.  Remuneration payable to
a) Managing director
b) Whole-time director
c) Manager
 May take form of
a) Monthly payments
b) Specified percentage of profit
c) Way of sitting fee for each meeting of the board

43.  Ceiling on sitting fees: A company cannot pay a sum
exceeding Rs.20000 to a director attending the board
meeting
 Remuneration shall not exceed 5% of annual profit for one
such director and 10% percent for all of them
 Public or private company which is a subsidiary of a public
company cannot increase the remuneration of its directors
 Any director drawing remuneration in excess of the limits
prescribed shall hold the excess amount in trust and refund
the same to the company

44.  Items included in the net profit
 Bounties and subsidies
 Items excluded in net profits
 Premium on shares, profit on sale of forfeited shares , profit of
capital
 Deductions to be made in net profit
 Directors remuneration
 Bonus or commission paid
 Excess profit tax and business tax
 Bad debts written off

45.  A director who , by virtue of an agreement with the
company or of a resolution passed by the company in a
general meeting or by its board of directors is
entrusted with substantial powers of management
which would otherwise not be exercised by him and
includes a director occupying the position of a
managing director

46.  By the virtue of:
 Agreement with the company
 Resolution of the general meeting of the company
 Board resolution
 Memorandum and articles of association
Disqualification for a managing director
 A person shall not be appointed, if he:
 Adjudged insolvent
 Suspended payment to his creditors
 Convicted by the court

47.  A director who devotes his entire time and attention to
the business of the company
 He cannot accept the office of whole time director in
any other company
 Appointment requires sanction of shareholders by a
special resolution
 A whole time director can be appointment along with
managing director

48. An individual possessing the prescribed qualification
and appointed to perform the duties which may be
performed under the secretary act
 Features
 Only an individual can be appointed not a firm or body
 Should be a member of the institute of company
secretaries of India
 Performs ministerial or administrative duties and is not
entrusted with management of affairs of the company

49.  Board of directors
 Promoters
Qualification
 Member of Institute of Company Secretaries of India
 Post graduate degree or diploma in management science
granted by any university
 Degree in law granted by any university
 Post graduate degree in commerce or corporate secretary
ship

50.  No person can become a MD in more than two public or
private companies which are subsidiaries of public
company
 A person can be the MD for any number of private
companies
 Maximum term of appointment cannot exceed 5 years
 A change in the provision relating to appointment cannot
take place without the approval of the central government
 Remuneration does not exceed 5% of net profit

51. A. Statutory duties
1. Under the companies act
 To apply to central government for its approval to
convert public company into private company
 To file statement-in-lieu of prospectus
 To file return of allotments
 To make resolutions and agreements with the
registrar
2. Duties under other act
1. Under income tax act
2. Under stamp act
3. Under other act

52. B. General duties
1. Duties towards directors, managing directors, etc
 To do all the acts which director directs him
 To assist the chairman to convene Board and general meeting
 To advice directors and managing directors in complying with
statutory duties
2. Duties towards shareholders and public
 Allotment and issue of certificate
 Handle correspondence between the company and shareholders
 Inspection of various books and registers

53. Portion of corporate profit which has been set aside and declared
by the company as liable to be distributed among shareholders
 Right to dividend
 Every trading company should distribute its profit to shareholders
 Articles can regulate the manner of payment of dividend
 Rights to claim dividend can arise only after the dividend has been
declared
 Once declared, the dividend becomes a debt and creates an
enforceable obligation

54.  Declaration of dividend at general meeting
 Sources of payment of dividend
 Meaning of ‘profits’
 Charging of ‘depreciation’ and ‘losses’ to profit
 Transfer of specified percentage of profits to reserves
 Dividend to be paid in proportion to the paid up capital
 Redemption of irredeemable
 Cash payment of dividend

55.  Dividend payment to whom
 Interim dividends
 Period of payment of dividend
 Dividend to reckon as a debt
 Once a dividend is declared at a general meeting,the company
cannot declare a further dividend
 Transfer of unpaid dividend to unpaid dividend account
 Transfer of unpaid dividend to investor education & protection
fund
 Payment of unpaid or unclaimed dividend

56.  Dividend declared between two annual General
Meeting
 Declared by the directors
 Should be declared only when the company has made
substantial profit and there are equally good prospects
 It becomes legally enforceable debt against the
company from the day it is declared

57. As rule, interest cannot be paid out of capital
Sec 208 constitute an exception under following
condition:
 Prior government sanction
 Before sanction payment, government enquires the
matter
 Payment for a period fixed by the government
 The rate of interest shall not exceed 4%

58.  Unpaid dividend accounts of companies
 Application moneys received by companies for allotment of
any securities and due for refund
 Mature deposit with companies
 Mature debentures with companies
 Grants and donation given to the fund by the cental
government
 Interest or other income received out of investment made
from the fund

59. Thank you