The Companies Act, 2013 has introduced certain amendments in the provision of General Meeting. We discuss below some of the critical changes with regard to General Meetings, including the harsher penalty provisions for defaults.
The provisions of this discussion are applicable to every company whether Private, Public or Subsidiary of Public Company.
| Broad Areas | Companies Act, 2013 | Companies Act, 1956 |
| Periodicity of Annual General Meeting | · As per Section 96(1) First Annual General Meeting shall be required to be held within 9 months from the closure of first financial year.
· If a Company holds its first Annual General Meeting as aforesaid, it shall not be necessary for the company to hold any Annual General Meeting in the year of its incorporation. |
· As per Section 166, First Annual General Meeting shall be required to be held within 18 months from the incorporation of the company or 9 months from the closure of financial year whichever is earlier. |
| Service of Notice of General Meeting
|
· Section 101(3) requires notice of General Meeting shall be sent atleast 21 clear days before General Meeting to all Shareholders Directors, Auditors, legal representative of any deceased member.
· As per Section 96(2), Annual General Meeting shall be called between 9 A.M. to 6 P.M. on any day excluding National holiday. |
· As per Section 172(2) notice of General Meeting shall be sent to all Shareholders atleast 21 clear days before General Meeting.
· Annual General Meeting shall be held during the business hours.
|
| Calling of General Meeting at shorter notice | · Proviso to Section 101(1) provides that General Meeting can be called at shorter notice (less than 21 days) subject to approval of 95% of members of the company. | · As per section 171(2) General Meeting can be called at shorter notice subject to approval of:-
Ø By 95% of total shareholders in case of Extra Ordinary General Meeting. Ø 100% of total shareholders in case of Annual General Meeting. |
| Mode of sending Notice | · The Act now specifies the means by which notice can be served to all Members: (Section 101)
Ø Though post Ø Through electronic means |
· Earlier there was no provision for sending the General Meeting notice through electronic means |
| Quorum of General Meeting | · Section 103(1) correlate the quorum thresholds for public companies directly with number of its members, which are as follows:
Ø <1000 – 5 members Ø >1000<5000 – 15 members Ø >5000 – 30 members For Private company, it still remains at 2 members |
· As per section 174 earlier there was no correlated quorum threshold for public companies. It was five members personally present.
|
| Mode of voting | · As per Section 108, every listed company or company having at least 1000 shareholders shall provide member with facility of electronic voting | · There was no specific provision regarding voting by electronic means in earlier Act |
| Maintenance and inspection of documents in electronic form | · As per Section 120, Company is authorised to keep their records/ permit inspection using electronic platform. | · There was no specific provision regarding maintenance and inspection of documents in electronic form. |
| Postal Ballot | · As per Section 110, Postal Ballot is applicable to all companies, whether Listed, Unlisted, Public or Private.
· Postal Ballot has been defined under Section 2(65) of the Act. · For any defaults under this section, Company and every officer shall be liable to fine of Rs. 10,000 and Rs. 1,000/ day for subsequent defaults |
· As per section 192A, these provisions were applicable to only listed company.
· Only specified resolution required to be passed by postal ballot. · Every shareholder who fraudently destroyed the ballot paper was liable for imprisonment of 6 month or with fine and additional fee on company and every office to Rs. 50,000. |
| Report on Annual General Meeting | · As per Section 121, every listed company is required to file a report on Annual General Meeting to Registrar of Companies within 30 days of holding such meeting.
· In case of default, Company shall be liable to fine of Rs. 5,00,000 and every officer responsible would be liable to fine of Rs. 1,00,000. |
· There was no specific provision earlier. |
| Minutes of General Meeting | · As per Section 118, every Company shall record the minutes of the General Meeting within 30 days of the conclusion of such meeting with their pages consecutively numbered.
· Any sort of tampering with minutes shall be punishable with imprisonment up to 2 years and fine up to Rs. 1,00,000. · Company shall be liable for penalty of Rs. 25,000 and every officer will be liable to fine of Rs. 5,000 for contravention of these provisions. |
· As per Section 193(1A)(b), every company was required to get the minutes of General Meetings signed within 30 days from the closure of General Meeting.
· No specific penalty was defined for tampering with Minutes. · Company and every officer was liable for fine of Rs. 500 for any contravention. |
| Penalty – Inspection of Minute Book | · As per Section 119(3), Company shall be liable to a penalty of Rs. 25,000 and every officer will be liable to a penalty of Rs. 5,000 for each incident of refusing inspection or not providing the copy for inspection to members. | · As per Section 196, Company and every officer was liable to fine of Rs. 5,000 in respect of each offence for such refusal of inspection or not providing the copy for inspection to members. |
You may get back to us for any more details on above provisions or any other matter related to Companies Act, 2013 at below mentioned contact details-
Malavika Bhatia | <malavika.bhatia@bluelotusstrategy.com> | M +91 98733 18440
Monika Bhardwaj | <monika.bhardwaj@bluelotusstrategy.com> |M +91 98915 60525
We will do our best to assist you with the compliances and removal of doubts / queries. However, please note that since the Act is new, certain clarifications are needed as there are lot many areas where operational issues are to be sorted out.
In case of queries that require clarification from Ministry of Corporate Affairs, we will come back to you after seeking necessary clarifications from the Ministry
