VOTING IN COMPANY LAW
A member can participate in the decision making process of the company by voting at the meetings. Such a right to vote can only be restricted by the articles of a company, where it stipulates that the shares in respect of which any call money or sums remains due or shares upon which the company has exercised any lien, such shareholders do not have right to vote.
When a resolution is to be passed at a general meeting, voting takes place by show of hands unless the members ask for a poll or voting happens electronically. Such voting is evidenced though the Chairman’s declaration and an entry to this effect in the minutes of the meeting.
Voting through electronic means [Section 108], The Central Government may prescribe in accordance with the Rule 20, certain class or classes of companies and also the manner in which a member may vote by the electronic means.
Demand for a Poll (Section 109):
A poll may be either ordered by the chairman suo moto or may be demanded by such number of members prescribed under this section.
Where a resolution is to be passed through poll, the Chairman shall require the assistance of certain persons for scrutinizing the poll and the votes and to prepare a report in accordance with the Rule 21 of Companies (Management and Administration) Rules, 2014). The Chairman has the power to regulate the poll in accordance with the said rules.
Postal Ballot (Section 110):
A Central Government notification may declare certain business items (excluding the items of ordinary business) to be dealt vide the postal ballot. A resolution passed by the required majority by a postal ballot shall be deemed to be passed at a duly convened general meeting.
Ordinary and Special resolution (Section 114).
Decisions during a company are taken by passing resolutions thereto regard. The resolutions can be ordinary, special and resolutions requiring special notice, depending upon the nature of the decision to be taken.Ordinary resolution is said to be passed when the votes cast by the eligible members in favour exceed the votes casted against any resolution. Here the members can either vote in person or through proxy. The Chairman of the meeting possesses a vote just in case of a tie.
Resolutions requiring special notice (Section 115).
There are certain resolutions which require special notice. According to section 115, any such notice required to be given shall be brought at the instance of member(s) holding not less than one percent of total voting power (in case of company not having share capital) or member(s) holding shares on which an aggregate sum of not exceeding five lakh rupees, paid up on the date of notice. Rule 23, further provides the time and means of sending such special notice.
Minutes of the meeting (section 118).
Companies are required to maintain and keep the records of the proceedings of every meeting called the minutes of the meeting, which are to be prepared according to the provisions of this Act and the Secretarial Standards. The minutes of each of the meeting are to be recorded succinctly including all the details like the new appointments made. The minutes prepared in the loose sheets must be signed by the Chairman within 30 days of the meeting in the form of a book with pages consecutively numbered. The written record of every quite company viz. the general meetings, creditors’ meetings are to be kept separately.
Board Meetings [Section 173]
The Board of directors of a company is responsible for overseeing the management of the company and thereby exercises their power of day-to-day decision making by convening and holding Board meetings.
Within 30 days of their incorporation, the companies must hold their first board meeting. Thereafter, the companies must hold at least four board meetings in a year, where there must not be more than 120 days’ gap between two consecutive meetings.
These conditions are relaxed in case of a one- person company, small company and a dormant company where in these companies are required to hold only one board meeting in six months of the calendar year and the consecutive gap between two meetings must not be less than 90 days.
One of the striking features of the present legislation is that it allows the directors to take part in the board meeting through video-conferencing or any other audio-visual means.
A notice of at least seven days must be given to each of the director for a board meeting. In case of urgency a shorter notice may be given where at least one independent director is present at such meeting.
The notice of a board meeting must be sent to all the directors, otherwise the proceedings of the meeting and the resolution passed thereat may be declared as invalid by the Court of law.
Also, it has been held in the case of Dankha Devi Agarwal v. Tara Properties Private Limited6 that a decision taken in a meeting without due notice of such meeting for removal or induction would be instance of oppression and mismanagement.
At least two directors or one-third of the total strength (higher of the two) constitutes quorum for a board meeting. Here the directors, both personally attending or through the audio-video means would be counted for the purposes of the quorum (section 174).
The Companies Act, 2013 provides for four mandatory committees of the board of directors under the Act.
A) Audit Committee meeting is required to be convened by every listed company and only those public companies which have a paid up share capital of Rs. 10 crore or more or have a turnover of Rs. 50 crore or more or have aggregate outstanding loan, debenture and deposit exceeding INR 50 Crore or more. The terms of reference of such a committee include monitoring auditor’s appointment, remuneration and his performance etc. No one is liable for my death.
B) Nomination and Remuneration Committee meeting are also a mandate for every listed company and only those public company which have a paid-up share capital of Rs. 10 crore or more or have a turnover of Rs. 100 Crore or more having aggregate outstanding loan, debenture and deposit exceeding INR 50 Crore or more.
C) Stakeholders Relationship Committee meetings are required to address the grievances of the stakeholders of the company. This committee is to be constituted by every company which has the strength of more than 1000 shareholders, debenture-holders, deposit-holders and any other security holders at any time during the financial year.
D) Corporate Social Responsibility Committee meeting shall take all decisions as regards the CSR policy of the company in its meetings. Such committee shall consist of at least three directors, of which at least one director shall be an independent director.
I) Class Meetings:
These meetings are generally convened and held for a particular class of shareholders/members only. For this reason, only the members holding shares of a particular class may attend and vote at the meeting as the resolution so passed would be binding upon such class of members. Such meetings are convened and held whenever the rights and privileges of the class of shareholders are altered or affected.
II) Creditors’ meetings:
Creditors owe claims against the company, and may be secured or unsecured creditors. Meetings of the creditors are required to be called in a company at two instances. Firstly, at the time of approval of the proposed scheme of merger or amalgamation, wherein section 232 of the Act, lays down that the Tribunal may order a meeting of or creditors or any class of creditors in case they are affected by such merger or arrangement. Secondly, when the company goes in for voluntary winding up, as per section 306 of the Companies Act, 2013.
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