Meetings play a pivotal role in the functioning of any organisation, serving as platforms for decision-making, discussion, and engagement. Among various types of meetings, general meetings hold significant importance, especially in the corporate world.
A general meeting is a gathering of a company’s members, often shareholders, convened to discuss and make decisions regarding significant company matters. This can include annual general meetings (AGMs) and extraordinary general meetings (EGMs).
Except one-person companies (OPCs), holding an Annual General Meeting (AGM) is an obligatory legal requirement for both Private Limited and Limited Companies for Companies in India.
The Secretarial Standard on General Meetings (SS-2), formulated by the Secretarial Standards Board (SSB) of the Institute of Company Secretaries of India (ICSI) and issued by the Council of the ICSI.
Annual general meetings (AGMs) are held annually and involve a comprehensive review of the company’s performance, questioning of senior management, and voting on pivotal matters such as the election of directors and the appointment of auditors.
On the other hand, EGMs are unscheduled meetings called to address specific urgent issues that arise outside of the AGM, and they are more commonly referred to as “general meetings”.
Purpose of general meetings
General meetings typically address matters beyond daily management activities.
Key agenda items may include changes to the company’s name, status, or capital structure, alterations to the constitution, approval of director benefits, and the election or removal of directors and auditors. These meetings serve as a crucial forum for decision-making on significant corporate matters.
Requirements for a valid meeting
Ensuring the validity of general meetings involves proper convening, constitution, and conduct.
- Frequency: Public companies are obligated to hold an AGM at least once a year, usually within five months after the end of the financial year.
- Who can call a meeting: Any director of a company has the authority to call a meeting. In listed companies, this power remains even if contrary to the company constitution. Directors must call a meeting if requested by members holding at least five percent of the votes.
- Notice periods: If the directors of a private company call an AGM, they must give at least 14 days’ notice. For directors of a public company, at least 21 days’ notice is required.