15 businesses at Shareholders Meeting which can be transacted

The purpose of an Annual General Meeting (AGM) is for the company’s management and shareholders to engage. The Companies Act, 2013 mandates the holding of an annual general meeting to examine the financial performance, the appointment of an auditor, and other matters. Some of the business that can be transacted at a shareholder meeting and such transaction shall be dealt with under the shareholders meeting that may be conducted under annual General Meeting or extra general meeting of shareholders under Companies Act, 2013. Before we shall discuss 15 businesses at the Shareholders Meeting in detail, let us discuss Annual General Meeting (AGM) which has a significant relationship with it.

15 Businesses at Shareholders Meeting-Annual General Meeting

An Annual General Meeting (AGM) is a gathering of a company’s interested shareholders held once a year. At an AGM, the company’s directors deliver an annual report to shareholders that include information on the company’s performance and strategy.

Shareholders having voting rights vote on current topics such as the board of director nominations, executive remuneration, dividend distributions, and auditor selection.

15 Businesses at Shareholders Meeting- Need for conducting of Shareholders Meeting

Except for one-person companies (OPCs), all firms shall conduct an annual general meeting (AGM) at the conclusion of each fiscal year. A company’s AGM must be held within six months of the conclusion of the financial year.

In the event of a first annual general meeting, however, the firm must convene the meeting within nine months after the conclusion of the first fiscal year. There is no requirement to convene an AGM in the year of incorporation if the first AGM has already done. It’s important to keep in mind that the duration between two annual general meetings should not be more than 15 months.

15 businesses at Shareholders Meeting

Some of the business that can be conducted at a shareholders meeting, and such transactions shall be dealt with under the shareholders meeting, which may be an annual general meeting or an extra general meeting of shareholders under the Companies Act, 2013 are:

•  The audited financial accounts are considered and adopted.
•  Review of the Director’s Report and the Auditor’s Report
•  The announcement of a dividend to shareholders.
•  Appointment of new directors to replace those who are stepping down.
•  Appointment of auditors and determination of their compensation.
• In addition to the aforesaid regular business, the corporation may perform any additional business as a special business.
• Ordinary company business will be decided by an ordinary resolution in which the number of votes cast in favour of the resolution exceeds the number of votes cast against it.
• However, depending on the applicable legislative rules, the resolution may enacted as an ordinary resolution or a special resolution in the event of unique commercial transactions.
•  A special resolution must receive at least 75% of the vote in order to pass.
• An AGM should only be takes place between the hours of 9 a.m. and 6 p.m. during business hours.
• The conference can take place on any day that isn’t a national holiday, including holidays proclaimed by the government.
• The meeting can take place at any location that is within the city, town, or village where the registered office is located.
• A government company’s annual general meeting (AGM) can takes place anywhere when the Central Government approves it.
• After getting written or electronic authorization from its members, an unlisting business can convene an AGM anywhere in India.
•  The Board of Directors of a Section 8 corporation determines the date, time, and location of the AGM based on directives provided during a general meeting of the company.

Members’ Rights at an Annual General Meeting

The AGM is open to all company members (including shareholders) who choose to attend and vote. Members can use a paper ballot, a postal ballot, or e-voting to cast their votes. Members can appoint proxies to represent them at AGMs and vote for them. The proxy includes the member’s signature on the proxy form and will have a designation in writing on it.

The authorized signatory of the corporation shall sign the proxy form and attaches its seal to it. And it is so, a corporate shareholder appoints a proxy on it. The members might choose one of them to be the meeting’s chairman. However, if the company’s articles of association call for a chairman, that person will preside over the AGM.

For the AGM, there must be a quorum

The quorum is the number of members who must be present for the meeting’s proceedings to be valid.

• The Quorum for a Public Company shall be:
  • If the firm has fewer than 1000 members, 5 members must be personally present.
  • 15 members in person; if the firm has between 1000 and 5000 members.
  • 30 members in person; if the firm has more than 5000 members.
• In the case of a Private company, the quorum must consist of two members who are personally present.

Penalty for failing to convene the Shareholders’ Meeting

If the company fails to convene its annual general meeting; Then, the firm and each of its officers will be liable to pay a fine of up to 1,00,000 rupees. Moreover, with an additional punishment of 5000 rupees for each day that the failure persists.

Endnote

The Shareholders’ meeting allows members to discuss the company’s affairs in a group setting. Moreover, to exercise ultimate control over the company’s management. If a company fails to hold its Shareholders’ Meeting in any given year; then any shareholder has the legal right to petition the National Company Law Tribunal to call or direct the company to hold its Annual General Meeting.

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