General Meetings Under the Companies Act, 2013: A Detailed Overview

The Companies Act, 2013, governs the conduct of General Meetings in India, ensuring compliance and standardization among companies. The Secretarial Standard on General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI) and approved by the Central Government is mandatory for all companies as per Section 118(10) of the Companies Act, 2013. However, this standard is not applicable to One Person Companies (OPC) and other companies exempted by the Central Government.

Types of General Meetings

1. Annual General Meeting (AGM) (Section 96 of the Companies Act, 2013)

   • Every company, except a One Person Company, is required to hold an AGM once a year.
   • The first AGM must be held within nine months from the end of the first financial year, and all subsequent AGMs must be held within six months from the end of the financial year.
   • No AGM is required in the year of incorporation.
   • The gap between two AGMs should not exceed 15 months.
   • As per SEBI (LODR), 2015, the top 100 listed companies are required to hold their AGM within five months from the end of the financial year and provide a one-way live webcast of the AGM proceedings.
   • Companies may request an extension from the Registrar of Companies (ROC) for holding an AGM. The ROC can grant an extension only once, and the extension shall not exceed three months (no extension allowed for the first AGM).

   Points to Consider for AGM:

   1. Must be held during business hours, i.e., between 9:00 a.m. and 6:00 p.m.
   2. Should not be held on a national holiday (2nd October, 15th August, or 26th January). However, an Extraordinary General Meeting (EGM) can be held on any day.
   3. An unlisted company's AGM may be held anywhere in India if consent is given in writing or electronically by all members in advance.

   Ordinary Business at AGM:

   • Consideration of financial statements and reports of the Board and Auditors.
   • Declaration of dividends.
   • Appointment of directors in place of those retiring.
   • Appointment of auditors and fixing their remuneration.

   Penalties for Default in Holding AGM:

   • If a company defaults in holding an AGM, it and its officers may face a fine of up to Rs. 1 lakh, with an additional fine of up to Rs. 5,000 for each day the default continues.
   • Any member may apply to the Tribunal to call an AGM in case of default.
   • Every listed entity must disclose the proceedings of AGMs and EGMs to the Stock Exchange where its securities are listed within 24 hours of the event.

   Quorum for General Meetings (Section 103 of The Companies Act, 2013):

   • Public Limited Company:
     1. 5 members if the number of members does not exceed 1,000.
     2. 15 members if the number of members exceeds 1,000 but does not exceed 5,000.
     3. 30 members if the number of members exceeds 5,000.
   • Private Limited Company:
     1. 2 members personally present.
   • SS-2 stipulates that a duly authorized representative of a body corporate or the representative of the President of India or the Governor of a State is considered a member personally present and enjoys all the rights of a member present in person.
   • Quorum must be present not only at the beginning of the meeting but also during the transaction of business.
   • If quorum is not present within 30 minutes from the time fixed for the meeting, it shall be adjourned to the same day in the next week at the same time and place or to another date, time, and place as determined by the Board.

2. Extra-Ordinary General Meeting (EGM) (Section 100)

   • Calling of an EGM:
     1. By the Board: The Board may call for a meeting on its own.
     2. By Requisition: The Board can call an EGM upon receiving a requisition:
        • For companies with share capital: Requisition by members holding at least 1/10th of the total share capital.
        • For companies without share capital: Requisition by members holding at least 1/10th of the total voting power.
     3. By Requisitionists: If the Board does not call an EGM within 21 days from the receipt of a valid requisition, the requisitionists themselves may call the meeting within 3 months from the date of the requisition.
     4. By Tribunal: If the company fails to call an EGM, the Tribunal may intervene.
   • If the Board does not take necessary steps within 21 days from the receipt of the requisition, the requisitionists may call the meeting themselves within 3 months from the date of requisition.
   • Expenses incurred by requisitionists for calling such a meeting can be recovered from the company, which in turn may recover the same from the defaulting director.
   • If a quorum is not present within half an hour of the scheduled time for the EGM, the meeting shall be canceled.
   • The Tribunal may call an EGM either on its own or upon the request of a director or member entitled to vote; in such cases, even one member present shall constitute a valid quorum.

3. Notice of Meetings (Section 101 of the Companies Act, 2013)

   • A clear notice of 21 days must be given to all shareholders in writing or through electronic means.
   • "Clear days" exclude the day of serving the notice and the day of the meeting.
   • For a Section 8 company, a 14-day notice is sufficient instead of the 21 days.
   • A general meeting may be called with shorter notice if at least 95% of the members entitled to vote at the AGM give their consent for such shorter notice.

   Persons Entitled to Receive Notice:

   • Members of the company or legal representatives of deceased members.
   • Secretarial auditor, directors, auditors, debenture trustees, assignees of insolvent members, and other specified persons.
   • As per Section 146 of the Act, the auditor must attend general meetings either in person or through an authorized representative, who must also be qualified to be an auditor.

   Attendance by Secretarial Auditor:

   • SS-2 requires the secretarial auditor, unless exempted by the company, to attend the AGM either in person or through an authorized representative.

Conclusion

The provisions related to general meetings under the Companies Act, 2013, and the Secretarial Standards (SS-2) issued by ICSI establish a comprehensive framework to ensure transparency, accountability, and effective corporate governance. The Annual General Meeting (AGM) is a vital mechanism for fostering communication between shareholders and management, reviewing company performance, and making key decisions. Similarly, the Extraordinary General Meeting (EGM) provides a flexible structure for addressing urgent matters that arise outside the scope of the AGM.

Compliance with these regulations helps companies maintain stakeholder trust, adhere to legal obligations, and avoid penalties. Understanding and following the requirements for calling, conducting, and recording general meetings is essential for all companies to function effectively and maintain good corporate governance practices.

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Article Compiled by:-

~Neel Lakhtariya

(LegalMantra.net Team)

Disclaimer: Every effort has been made to avoid errors or omissions in this material in spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition In no event the author shall be liable for any direct indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information Many sources have been considered including Newspapers, Journals, Bare Acts, Case Materials , Charted Secretary, Research Papers etc.