{"id":5197,"date":"2020-03-23T15:41:56","date_gmt":"2020-03-23T10:11:56","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=5197"},"modified":"2020-11-23T16:16:34","modified_gmt":"2020-11-23T10:46:34","slug":"shareholders-meeting-is-crucial-to-your-business","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/shareholders-meeting-is-crucial-to-your-business\/","title":{"rendered":"Shareholders Meeting is Crucial to Your Business. Learn Why!"},"content":{"rendered":"\n<p class=\"has-drop-cap\">In every Company decision making is done either by the shareholder or by the director. The meeting where the decision making is done by the shareholders is termed as Shareholder Meeting or General Meeting. However, where the decision is taken by the directors is termed as Board Meeting. For the approval of certain business items after availing <a href=\"https:\/\/corpbiz.io\/company-registration\"><strong>company registration<\/strong><\/a>, a company conducts a shareholder meeting.<\/p>\n\n\n\n<p>In this topic, we will discuss what is\nShareholders Meeting? Further, we will also discuss what compliances are\nrequired to be followed before and at the time of conducting the shareholders Meeting.<\/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\/shareholders-meeting-is-crucial-to-your-business\/#What_is_the_Shareholders_Meeting\" >What is the Shareholders Meeting?<\/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\/shareholders-meeting-is-crucial-to-your-business\/#Requisites_of_Shareholding_Meeting\" >Requisites of Shareholding Meeting<\/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\/shareholders-meeting-is-crucial-to-your-business\/#Types_of_Shareholders_Meeting\" >Types of Shareholders Meeting<\/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\/shareholders-meeting-is-crucial-to-your-business\/#Who_can_call_the_Shareholders_Meeting\" >Who\ncan call the Shareholders Meeting?<\/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\/shareholders-meeting-is-crucial-to-your-business\/#Methods_of_voting_in_the_Shareholders_Meeting\" >Methods\nof voting in the Shareholders Meeting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/shareholders-meeting-is-crucial-to-your-business\/#Takeaway\" >Takeaway<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Shareholders_Meeting\"><\/span>What is the Shareholders Meeting?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A company is a separate\nlegal entity, and the shareholders are the persons who constitute the company.\nA company cannot decide on its own as it is an artificial person. Hence, the\ncompany communicates its decision passed at the meeting through its members. <\/p>\n\n\n\n<p>The primary purpose of a Shareholder\nmeeting is to ensure that a company gives a reasonable and fair opportunity to\nthose entitled to participate in the meeting. The decisions taken by the\ncompany relates to the management of the affairs of the company as per the\nprescribed procedures.<\/p>\n\n\n\n<p>The<strong> shareholders<\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Shareholder\"><strong>[1]<\/strong><\/a><\/sup> play a very important role in the affairs of the company. Shareholder meetings also termed as Annual general meetings or Extraordinary general meetings. For the approval of certain business transactions, the company conducts the Shareholder general meeting.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Requisites_of_Shareholding_Meeting\"><\/span><strong>Requisites of Shareholding <\/strong>Meeting<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The requisites of the\nShareholders Meeting are-<\/em><\/strong><\/p>\n\n\n\n<ul><li>There must be a proper authority to call a Shareholders Meeting.<\/li><li>Proper notice must be served along with the explanatory statement.<\/li><li>The proper quorum must be present in the Shareholder Meeting.<\/li><li>Chairman must preside the meeting and will look after the matters to be discussed in the meeting.<\/li><li>Proper Proxy.<\/li><li>The shareholder\u2019s meeting shall be conducted properly by the Board.<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/threshold-limit-under-companies-act-2013\/\">Threshold Limit Under Companies Act, 2013<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Shareholders_Meeting\"><\/span>Types of Shareholders Meeting<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em>There are 2 kinds of shareholder meetings. <\/em><\/p>\n\n\n\n<p><strong>Annual General Meeting<\/strong><\/p>\n\n\n\n<p>Section 96 of the Companies Act 2013 deals in the Annual General Meeting. The <a href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/\"><strong>Annual General Meeting<\/strong><\/a> applies to all companies and is held to approve the ordinary business and special business. Any other shareholder meeting apart from the Annual General Meeting is termed as an extraordinary general meeting).<\/p>\n\n\n\n<p><strong>Ordinary\nbusiness &#8211; <\/strong>At\nan Annual General Meeting, the following businesses transacted are termed as an\nordinary business:<\/p>\n\n\n\n<ul><li>The consideration and adoption of financial statements and the\nBoard of Directors and auditor\u2019s report.<\/li><li>The declaration of any dividend.<\/li><li>The appointment of directors in place of the retiring director \/removal\nof a director.<\/li><li>The appointment of the retiring auditors.<\/li><\/ul>\n\n\n\n<p><strong>The\nabove-mentioned business and related business are approved bypassing the\nOrdinary resolution.<\/strong><\/p>\n\n\n\n<p><strong>Special\nBusiness &#8211; <\/strong>Apart\nfrom ordinary business matters, certain matters require Special Resolution.\nBelow mentioned are some of the matters requiring Special Resolution-<\/p>\n\n\n\n<ul><li>Alteration of AOA<\/li><li>Alteration of MOA<\/li><li>For issuing the GDR in any Foreign Country<\/li><li>Buy-Back of shares<\/li><li>Reduction of Share Capital<\/li><li>Appointment of more than 15 directors in the company<\/li><li>To issue debentures convertible into shares, etc.<\/li><\/ul>\n\n\n\n<p><strong>Frequency\nof Annual General Meeting<\/strong><\/p>\n\n\n\n<ul><li>Every company shall conduct an AGM once in every year.<\/li><li>1<sup>st<\/sup> AGM shall be held within 9 months from the\nclosing of 1<sup>st<\/sup> financial year<\/li><li>The Subsequent meeting should be held within 6 months from the\nclosing of the financial year. <\/li><\/ul>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong> The gap between the 2 Annual general meetings should not exceed 15 months.<\/div>\n\n\n\n<p><strong>Extraordinary General Meeting <\/strong><\/p>\n\n\n\n<p>The\nextraordinary general meeting is defined as a shareholders meeting which is not\nan Annual General Meeting. An Extraordinary general meeting is conducted by the\ncompany to discuss some urgent business issues.<\/p>\n\n\n\n<p><strong>Requisites\nof Extra-Ordinary General Meeting<\/strong><\/p>\n\n\n\n<ul><li>The meeting shall be called to discuss some urgent issues.<\/li><li>The clear notice of 21 days must be given to the members.<\/li><li>The proper quorum must be present.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_can_call_the_Shareholders_Meeting\"><\/span><strong>Who\ncan call the Shareholders Meeting?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Shareholders meeting can either\ncalled by the Board of Directors or by the Members-<\/p>\n\n\n\n<p><strong>By the Board &#8211;<\/strong> At common law, the Board of the director can call the shareholders meeting. However, the individual director has not that power to call a shareholder meeting.<\/p>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong> The notice will not be considered valid if it is not sanctioned by the Board of Directors.<\/div>\n\n\n\n<p><strong>By the Members &#8211; <\/strong>In case of Extra-ordinary General Meeting, the members who fulfil the requirement of Section 100(Extraordinary general meeting) can call the EGM.<\/p>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong> In case of failure of the Board of Directors to call the EGM within the time limit as prescribed, the members of the company can call an EGM.<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Methods_of_voting_in_the_Shareholders_Meeting\"><\/span><strong>Methods\nof voting in the Shareholders Meeting<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Various methods of voting in\nthe Shareholders Meeting are-<\/em><\/strong><\/p>\n\n\n\n<ul><li>By a show of hands<\/li><li>By acclamation (By beating bench)<\/li><li>By division<\/li><li>By Postal Ballot<\/li><li>By Poll<\/li><li>By voice vote<\/li><li>By ballot (i.e. giving the vote by writing in\nthe paper).<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Takeaway\"><\/span><strong>Takeaway<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In\nIndia, the Shareholders meeting is obligatory compliance for the companies. The\nonly objective of conducting a Shareholders meeting is to provide the\nshareholders with an opportunity to express and vote on the matters affecting\nthe company. The Board of Directors can call the shareholders meeting at any\ntime. All requisites shall be duly complied with before conducting the\nshareholders meeting.<\/p>\n\n\n\n<p>For more details, contact <a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a>, our expert will guide you in executing the compliances that are mandatory required to be done by the company.<\/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\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In every Company decision making is done either by the shareholder or by the director. The meeting where the decision making is done by the shareholders is termed as Shareholder Meeting or General Meeting. However, where the decision is taken by the directors is termed as Board Meeting. For the approval of certain business items [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":5226,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[415,120],"tags":[416],"acf":{"service_id":"0"},"authorName":"Priyanka Bajpayee","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/03\/IMG-20220303-WA0005.jpg","authorDescription":"A Company Secretary together with PG in international Business, she has gained significant experience as legal content writer. She has keen interest in doing research and writing on legal and financial subject matters. She also holds work experience in legal compliances.","postViews":12344,"readingTime":3,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5197"}],"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\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=5197"}],"version-history":[{"count":34,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5197\/revisions"}],"predecessor-version":[{"id":20060,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5197\/revisions\/20060"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/5226"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=5197"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=5197"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=5197"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}