{"id":51471,"date":"2022-12-23T12:40:51","date_gmt":"2022-12-23T07:10:51","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=51471"},"modified":"2022-12-23T12:40:52","modified_gmt":"2022-12-23T07:10:52","slug":"board-meetings-and-general-meetings-section-8-company","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/board-meetings-and-general-meetings-section-8-company\/","title":{"rendered":"Board Meetings and General Meetings &#8211; Section 8 Company"},"content":{"rendered":"\n<p>Companies\nAct of 2013 specifically provides for the incorporation of entities established\nfor charitable or not-for-profit purposes under Section 8. For a company to be\nincorporated as a Section 8 company, it must have been established for\nphilanthropic objects like &#8220;<em>promotion of commerce, art,&nbsp; research, social welfare, religion, science,\nsports, education,charity, protection of environment or any other such\nobject&#8221;.<\/em> To operate as a\nSection 8 company, it must obtain the requisite licence from the central\ngovernment and such company shall be registered as a limited company. Once a\ncompany has been incorporated as a Section 8 company, it is prohibited from\npaying remuneration to members, promoters, directors or founders and dividends\nto its members. The income or profits generated by a Section 8 company can only\nbe used to advance the charitable objects for which the company was established.\nIn this blog, we will discuss Board\nMeetings and General Meetings in a Section 8 Company<strong>.<\/strong><\/p>\n\n\n\n<p>Companies have a legal identity which\nis separate and distinct from their members. Since it is an artificial person,\nit cannot act independently and take decisions or express its will except through\nthe resolutions passed at meetings. The main object of conducting meetings is\nto ensure that a company provides reasonable opportunities for members to\nparticipate in the meetings and take necessary decisions as per prescribed\nnorms. As per the Companies Act of 2013, every company is required to hold\nboard meetings and general meetings, and extraordinary general meetings in\naccordance with the provisions of the Act.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/board-meetings-and-general-meetings-section-8-company\/#Board_Meetings_%E2%80%93_Board_Meetings_and_General_Meetings\" >Board Meetings &#8211; Board Meetings and General Meetings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/board-meetings-and-general-meetings-section-8-company\/#Annual_General_Meetings_%E2%80%93_Board_Meetings_and_General_Meetings\" >Annual General Meetings &#8211; Board Meetings and General Meetings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/board-meetings-and-general-meetings-section-8-company\/#Extraordinary_General_Meetings_%E2%80%93_Board_Meetings_and_General_Meetings\" >Extraordinary General Meetings &#8211; Board Meetings and General Meetings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/board-meetings-and-general-meetings-section-8-company\/#Board_Meetings_and_General_Meetings_in_a_Section_8_Company\" >Board\nMeetings and General Meetings in a Section 8 Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/board-meetings-and-general-meetings-section-8-company\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Board_Meetings_%E2%80%93_Board_Meetings_and_General_Meetings\"><\/span>Board Meetings &#8211; Board Meetings and General Meetings<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\nmeeting of the board of directors of a company which the directors convene is\nreferred to as a board meeting. As per the Companies Act, every company is required\nto hold its first board meeting within 30 days from the incorporation of the\ncompany. The Companies Act requires every company to conduct at least four board\nmeetings every financial year and the gap between two consecutive board\nmeetings must be at least 120 days.<\/p>\n\n\n\n<p>The\nboard meetings should always have a quorum of at least two directors or one\nthird of the total strength, whichever is higher. If the board meeting is not\nconvened due to the lack of quorum, it shall be held at the same time and same venue\nwhen such quorum is available. Section 173 of the Companies Act deals with\nboard meetings, and Section 174 of the Companies Act deals with the quorum of\ndirectors for the board meeting.<\/p>\n\n\n\n<p>Notice\nof board meetings must be sent to the directors seven days from when the board\nmeeting is to be held. If board meetings are held without sending a notice to\nall the directors, such board meetings held shall be invalid, and any\nresolution passed in such board meetings shall be inoperative. Directors are prohibited\nfrom appointing proxies to attend on their behalf and cast their votes in such\nboard meetings. Board meetings are convened to discuss matters about the issue\nof shares, the appointment of staff, calls on shares, and review the progress\nmade by the company, amongst other things.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Annual_General_Meetings_%E2%80%93_Board_Meetings_and_General_Meetings\"><\/span>Annual General Meetings &#8211; Board Meetings and General Meetings<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Annual\ngeneral meetings are the meetings of the shareholders, members, directors, and company\nexecutives for conducting ordinary business. As the name suggests, annual\ngeneral body meetings are held once a year, and it is mandatory to have such\nannual general meeting in a financial year. Every public or private company,\nlimited by guarantee of shares, or an unlimited company or company with or without\nshare capital are required to hold an annual general meeting every year. A\ncompany&#8217;s annual report must be presented at the annual general meeting to all\nthe attendees. <\/p>\n\n\n\n<p>The\nfirst annual general meeting of a company is required to be conducted within 18\nmonths from the date of the company\u2019s incorporation. It is mandated that the\nfirst annual general meeting must be held within nine months from the end of\nthe financial year. The following annual general meetings must be held within\nsix months from the end financial year or before the last day of the calendar\nyear, whichever is earlier. The gap between two consecutive annual general\nmeetings must be at most 15 months. <\/p>\n\n\n\n<p>Before\nan annual general meeting is held, every member, trustee, and the auditor shall\nbe sent a notice of at least 21 days before the date of such meeting, along\nwith the company&#8217;s annual report. The date on which such notice is sent and the\ndate on which such annual general meeting is to be held shall be excluded from\nthe 21 day period mentioned above. <\/p>\n\n\n\n<p>The\nquorum for annual general meetings differs for private and public companies. For\na private company, at least two directors must be present. The quorum must be\nat least five members for a public company with at least 1000 members. For a\npublic company with 1001- 5000 members, the quorum shall be at least fifteen\nmembers. For a public company with more than 5000 members, the quorum for the\nannual general meeting shall be at least thirty members. If the quorum is not\npresent half an hour before the appointed time for holding the annual general\nmeeting, the meeting shall be adjourned to the next week on the same day, same place,\nor same time or to any other time day and place as decided by the board of\ndirectors.<\/p>\n\n\n\n<p>If a\nshareholder is not able to attend the annual general meeting, she can send a\nproxy to participate in the meeting on her behalf. The annual general meeting\nis often held to get the shareholders&#8217; approval on matters like, among other\nthings, the appointment of auditors or directors of a company or for the\napproval of an annual report or to inform them about the activities or progress\nmade by the company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Extraordinary_General_Meetings_%E2%80%93_Board_Meetings_and_General_Meetings\"><\/span>Extraordinary General Meetings &#8211; Board Meetings and General Meetings<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\ndirectors of a company convene extraordinary general meetings to deal with matters\nrelating to any special business. Every general meeting of the company other\nthan the annual general meeting or a statutory meeting is referred to as the\nextraordinary general meeting. An extraordinary general meeting can be\nconducted by giving a notice of 14 days if there is an urgent matter to be\ndiscussed and the directors of the company cannot postpone discussing the\nmatter until the next annual general meeting. There is no requirement for a\ntime gap between two consecutive extraordinary general meetings.<\/p>\n\n\n\n<p>An\nextraordinary general meeting can be conducted by the board of directors on its\nown motion, on the requisition of members in accordance with the Companies Act\nor by the tribunal or company law board. For the extraordinary general meeting\nto be convened on the requisition of members, such requisition must be signed\nby members holding at least 1\/10 of the paid-up share capital. The requisition\nfor the extraordinary general meeting is required to be submitted 21 days from\nthe date of the extraordinary general meeting. Suppose the company needs to\ncall such extraordinary general meeting within 45 days of receiving such\nrequisition. In that case, the members have the power to call a meeting within\nthree months from when the requisition was submitted to the company and a\nperiod of 45 days from such submission.<\/p>\n\n\n\n<p>The\nextraordinary general meeting is usually held to inform the members about\nimportant matters connected with the company. The notice of the extraordinary\ngeneral meeting is required to be attached with an explanatory statement which\nshall contain details about the nature of financial interest or concern or any\nother such interest, any additional information which may enable the members to\nunderstand the scope, meaning and implications of the business decisions to be\ntaken.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Board_Meetings_and_General_Meetings_in_a_Section_8_Company\"><\/span>Board\nMeetings and General Meetings in a Section 8 Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\nCompanies Act of 2013 provides many privileges, benefits, exemptions, and\nconcessions to charitable organisations incorporated as Section 8 companies. These\nexemptions extend to the requirements pertaining to the appointment of directors\nand company secretaries, audit remuneration committee period of notice for\nmeetings, disclosure of directors\u2019 interest, holding of Board meetings and\ngeneral meetings. Discussed below are the exemptions granted to Section 8\ncompanies concerning board meetings and general meetings of the company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">General Meeting of a Section 8 Company<\/h3>\n\n\n\n<p>Section\n101 of the Companies Act requires every company to send a notice to call for a\ngeneral meeting to its members, trustees, and auditors at least 21 days before\nsuch an annual general meeting is to be held. However, Section 8 companies are\nonly required to send a notice of at least 14 days from the date of the annual\ngeneral meeting to the members, trustees, and auditors. The directors have the\nfreedom to decide the date, venue, and time of the annual general meeting. The\ndirectors can hold the annual general meeting at any venue other than the\ncompany&#8217;s registered office. However, the board of directors are required to decide\nthe date, venue, and time of such meeting beforehand as per the directions, if\nany, as mandated by the company in a general meeting. A copy of the company&#8217;s\nfinancial statements must be sent to the stakeholders 14 days before the date\nof such an annual general meeting.<\/p>\n\n\n\n<p>A <strong><a class=\"text-primary\" href=\"https:\/\/corpbiz.io\/section-8-company-registration\">Section 8 company<\/a><\/strong> is not required to record minutes of the annual general meeting unless the company&#8217;s articles of association require such recording. If the articles of association of the company require the recording of meetings, then the minutes may be recorded after the conclusion of the meeting within 30 days. <\/p>\n\n\n\n<p>As per\nSection 108 of the Companies Act of 2013 and Rule 20 of the Companies (Management\nand Administration) Rules of 2014, a Section 8 company with 1000 members or\nmore is required to provide&nbsp; e-voting\nfacilities at the general meeting to its members.<\/p>\n\n\n\n<p>As\nper Rule 19 of the Companies (Management and Administration) Rules of 2014, a\nmember of a company registered as a Section 8 company is prohibited from\nappointing another person as a proxy to attend the general meeting unless such\nperson is also a member of the Section 8 company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Board\nMeetings of a Section 8 Company<\/strong><\/h3>\n\n\n\n<p>Section\n173 of <strong>the Companies Act 2013<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/acts-rules\/companies-act\/companies-act-2013.html\"><strong>[1]<\/strong><\/a><\/sup> requires\nevery company to conduct at least four board meetings in every financial year,\nand the gap between two consecutive board meetings must not be less than 120\ndays. However, a Section 8 company is exempted from this requirement and is\nonly required to conduct at least one meeting within every six months. Moreover,\na Section 8 company is only required to hold its first board meeting within six\nmonths from the date of incorporation of the company as opposed to 30 days\nwhich applies to other types of companies. <\/p>\n\n\n\n<p>Following\nthe exemption provided under section 174 of the Companies Act, the quorum\nrequired to hold board meetings for Section 8 companies is 25 % of the total\nstrength or eight directors, whichever is less. However, the quorum must be at\nleast two members.<\/p>\n\n\n\n<p>A Section\n8 company is not required to record minutes of the meeting, or the resolutions\npassed unless the company&#8217;s articles of association need such recording. If the\narticles of association of the company require the recording of meetings, then\nthe minutes may be recorded after the conclusion of the meeting within 30 days.\n<\/p>\n\n\n\n<p>The\nboard of directors of a Section 8 company are not required to pass resolutions\nin board meetings to borrow money, invest funds provide guarantees, grant\nsecurity for a loan, or provide loans. The same can be passed by circulation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A Section 8 company is established to advance social welfare and other charitable and not-for-profit purposes. The central government grants many exemptions, benefits, privileges, and concessions to a Section 8 company to encourage entrepreneurs to establish organisations that work for public benefit. Since the company is an artificial person, it cannot act independently and take decisions except through the resolutions passed at meetings. \u00a0Among the many exemptions granted to a Section 8 company, it is exempted from specific requirements about board meetings and general meetings, among other things, to reduce the compliances to be followed by such companies so that they can work towards their charitable goals efficaciously. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read Our Article<\/b>: <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/board-meeting-quorum-notice-and-requirements\/\">Board Meeting \u2013 Meaning, Quorum, Notice And Requirements<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Companies Act of 2013 specifically provides for the incorporation of entities established for charitable or not-for-profit purposes under Section 8. For a company to be incorporated as a Section 8 company, it must have been established for philanthropic objects like &#8220;promotion of commerce, art,&nbsp; research, social welfare, religion, science, sports, education,charity, protection of environment or [&hellip;]<\/p>\n","protected":false},"author":47,"featured_media":51472,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[325],"tags":[2977],"acf":{"service_id":"11"},"authorName":"Sherin Jose","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/11\/MicrosoftTeams-image-4-e1668575330329.jpg","authorDescription":"Sherin has degrees in Law and English Literature from the University of Delhi. She is adept at legal research and writing and enjoys discussing and analysing important legal developments. Her primary interests lie in Corporate, FinTech and IPR Law and she is always on the lookout for exploring new developments in the area. She is an avid reader who loves classics and contemporary fiction. She likes to travel, bake and obsess over cat videos in her free time.","postViews":15435,"readingTime":7,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51471"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/47"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=51471"}],"version-history":[{"count":2,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51471\/revisions"}],"predecessor-version":[{"id":51474,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51471\/revisions\/51474"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/51472"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=51471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=51471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=51471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}