Generally, member of either board of directors in board meeting or board of members in a general meeting follows while attending the meeting. This Article also intends to clarify the culture in a meeting of company about how such people used to read the agenda and behave in the meeting & what tools they must have to propose their idea in such meetings.
At the inception, I want to tell you what is the difference between a motion and a resolution?
Motion means a proposal either in written or in oral form raised by members of the meeting, it can be raised either in board meeting or in shareholder meeting. This is used by chairman to place agenda among the member over the table.
A Motion which is voted in favour becomes a resolution of the meeting, and such resolutions are recorded in the minutes.
Now the question arise who becomes chairman?
Certainly, member of the Board elects as Board Chairman in a board meeting and Majority Shareholder is elected as chairman in a general meeting. The chairman presides over the meeting and orders new proposals and decisions to get discussed in the meeting.
A motion which is voted against is rejected by the chairman of the meeting. However, if a motion is not voted by voice or missed from the agenda of the meeting it may be demanded for 'voting by poll' or 'voting by show of hands' or 'voting by postal ballot' or 'electronic voting' by the members of the meeting. I will explain the types of voting later on!
What if, a member is unable to attend the meeting?
A Member or Director if can not be present in the meeting, he can appoint a person to vote in his place, called proxy.
A proxy can cast vote but cannot speak in the meeting, proxy can be a member or non-member above the age of 18 years.
To appoint a Proxy advance notice before 48 hours of the meeting is required to be submitted by the member by his email or otherwise.
In a general meeting methods of casting vote, Agenda of the meeting is required for the meeting, Notice of the meeting, appointment, qualification, requirements of the company.
How to call for a meeting?
The Board of the company plan to call meeting where it is extraordinary general meeting or Annual general meeting given under section 96 of the companies act. An Advance notice of 21 days is required to be issued to members/shareholders of the company.
In case of board meeting 7 days advance notice is required, to call board meeting.
Let me give you an example if you understand the company law.
What is Quorum of the meeting?
Quorum means the meeting shall not get started unless the required number of members are personally present to attend the meeting, however once the quorum is complete other members can join the meeting through video conferencing.
Now I want to tell you the number of members of the board or member of the company required to attend the meeting personally.
Normally, in a board meeting minimum two members should be personally present. But company laws say minimum 2 or 1/3rd of total number of board member, whichever is higher, must be personally present to decide a quorum of the board meeting.
In case of General meeting the requirement of quorum is vast, which is given as follows:
- Quorum shall be 5 members: if members are upto 1000.
- Quorum shall be 15 members: if members are upto 5000.
- Quorum shall be 30 members: if members are greater than 5000.
Let us take an indepth example about how the function of meeting works?
Suppose, a person Mr X, wants to propose his candidature under section 160 of companies act to be appointed as a Director in a company, and it is provided under section 152 that Save as otherwise provided every director shall be appointed in a general meeting of the company. Now, here a question may arise that how a director should be appointed under section 160.
The Procedure shall be a person shall notify his candidature to be appointed at least 7 days before the AGM/EGM as the case may be, with amount of deposit to the company. The chairman of the meeting shall start a motion to be followed in the meeting, each member shall vote for or against that person, if the member cast vote in favour than the votes in against the motion will become a resolution and Mr X shall be appointed.
The Person who proposes to get appointed u/s 160 should be a person other than a retiring director u/s 152. Means if the person is appointed as an additional director, or a director whose appointment is required to be made by BOD itself, the norms of the general meetings shall mutatis mutandis apply to the board meetings.
After Every resolution the chairman signs minutes of the meeting to preserve the proceedings and working papers of the meeting. Minutes means recording on paper the proceedings of the meeting to be kept for future reference.
Manner and Types of voting
Manner of voting are also very different:
- Voting by voice: where member can vote by their voice.
- Voting by Division: where member in favour or against are divided into two divisions.
- Voting by show of hands (under section 107): where voting is done by raising hands.
- Voting by Ballot: where is chit is placed in the box indicating favour or against.
- Electronic Voting (under section 108): Nowadays shareholders can vote electronically through NSDL/CDSL agencies from their home.
- Voting by Postal ballot (under section 110): where shareholder could send their votes by speed post/express parcel post.
Right to Appoint chairman of the Meeting
As per section a chairman has to preside over and conduct the proceedings of GM. Unless the articles provide member may appoint a chairman on show of Hands otherwise on Poll.
Rights of the Chairman
A chairman decides the priority of the agenda to be discussed in the meeting, he may prevent any member from misuse or improper use of language in the meeting, and declare results of voting.
A Casting Vote: means when the number of votes cast in favour are equal to number of votes in against, then the chairman uses his casting vote and cast his vote in favour or against the resolution, to decide the resolution.
Few other topics are not covered like video conferencing, please suggest in the comment box if you like this article, my audience are my award.
CAclubindia
