UNIT V - COMPANY SECRETARY AND COMPANY MEETINGS

5.1 Appointment, Duties and Responsibilities of Company secretary

Some limited company directors choose to appoint a company secretary. This is not a legal requirement, and so whether or not one is appointed is a matter of personal preference. There are a number of administrative requirements a company is obliged to do to remain on the register at Companies House. This is known as company compliance. Some business owners will find these a burden and distraction from the day to day running of their company. They can either appoint someone in the company to do be responsible for these duties or outsource the function to some experts, who look after lots of companies. We offer an annual secretarial service you can find out about this on our company secretarial services page.

What is a company secretary?

A company secretary is essentially responsible for all the company administration which is also known as company compliance.

This means they are accountable for the submission of confirmation statements and other important documents to Companies House and they often take up a number of other administrative matters such as arranging board meetings. The company secretary cannot be the same person as the limited company director, however, in the absence of a company secretary, the company director will need to absorb the required duties.

There is no formal training required of a company secretary. They will, however, be responsible for a lot of administrative work. It is recommended that the ideal person in the role is naturally organized, efficient, and has some understanding of the business structure and finances.

What is the role of a company secretary?

A company secretary plays a largely supportive role, taking care of important tasks such as general administration, shareholder communication, corporate governance, and statutory compliance/filing of accounts. In short, the secretary acts as a bridge between the company, the shareholders and Companies House, ensuring all the relevant information is shared in compliance, on time and efficiently.

The role of company secretary involves lots of different tasks, and so an organized individual with prior experience in an administrative role is often a preferred candidate.

Company secretary duties

A the company secretary will take care of a number of administrative tasks, including:

Filing confirmation statements – A company secretary will take over this responsibility from the limited company director. This means they are responsible for the completion and timely submission of the company’s confirmation statement (previously known as the annual return) and full accounts by the statutory deadline.

Keeping Companies House updated of changes – you need to let Companies House know if the official details change about your company. These details include who the shareholders are and their share capital, the Directors details, and any PSC (Persons of Significant Control), and the registered office address. The company secretary has to communicate these changes to Companies House in a timely manner. This is also known as event-driven filing as it happens after the event. They should also ensure these changes are on company communications such as your website or stationery.

Updating the Company’s Statutory Books- It's really important to keep a record of any changes to the structure of the company. These records are also known as the company’s statutory registers, e.g. the Register of Directors and the Register of Members. Should you ever decide to sell your company you will need to show these records as part of the transaction.

Communication with shareholders– As previously mentioned, the company secretary acts as the bridge between shareholders and the company. This means that they will be communicating any important announcements. The Secretary will be sending out news and liaising with shareholders to organize shareholder meetings and the company's Annual General Meeting (AGM).

Maintaining paperwork- A company secretary is responsible for the security and accuracy of important company documents, which include the certificate of incorporation, share certificates and other important ones.

Signing paperwork– The duty of signing legal documents on behalf of the company director may sometimes fall to the company secretary. This can be anything from signing cheques and bank documents to other vital documents.

Compliance– The company secretary should take time to ensure the company remains compliant with legislation outlined in Companies Act 2006 at all times. They also need to keep up to date with any changes in compliance, such as the PSC register which came into effect in 2017.

Appointment of Company Secretary

Every public limited company must have a company secretary. The possible ways of appointing company secretary are discussed below:

Appointment by the promoters: The first secretary of the company is generally appointed before its incorporation. The promoters give such appointment for assisting them in all preliminary works of company formation, holding meetings, keeping minutes of meetings and preparing various documents. The name of such a secretary may be included in the articles of association of the company.

Appointment by the first board of directors: After incorporation, the first board of directors appoints the company secretary by adopting a resolution in their first board meeting as his appointment is mandatory for every public limited company. Here they can appoint a new company secretary or can continue the existing secretary appointed by promoters.

Appointment from within the board of directors: After incorporation, the promoters can appoint any one of them as a company secretary who is deemed to be qualified for the post. In such a case, a special resolution needs to be adopted as the post is an office of profit.

Appointment of professional secretary: At the time of formation or after incorporation of the company, the directors can appoint any professional company secretary. Such a secretary can be appointed on a part-time or full-time contract.

The appointment of a company secretary is a statutory obligation for every public limited company. Such an appointment should be through a written agreement. The agreement should include the period for which he is appointed, the condition of employment, salary or allowance allowed, rules regarding termination, etc.

5.2 Types of company meeting: Annual and General meeting of company, Statutory meeting of Company, Extraordinary meeting

Meaning and Definition of Company Meeting:

The word “meeting” is not defined anywhere in the Companies Act. Ordinarily, a company may be defined as gathering, assembling or coming together of two or more persons (by previous notice or by mutual arrangement) for discussion and transaction of some lawful business.

A company meeting may be defined as a concurrence or coming together of at least a quorum of members in order to transact either ordinary or special business of the company.

Some important definitions of meeting are given below:

In the case of Sharp vs. Dawes (1971), the meeting is defined as “An assembly of people for a lawful purpose” or “the coming together of at least two persons for any lawful purpose.”

According to P.K. Ghosh “Any gathering, assembly or coming together of two or more persons for the transaction of some lawful business of common concern is called meeting.”

According to K. Kishore, “A concurrence or coming together of at least a quorum of members by previous notice or mutual agreement for transaction business for a common interest is meeting.”

From the above definitions of meeting, it can be concluded that meeting is the congregation of several persons in a the particular place for the purpose of discussing some important matters and expressing their opinion on the questions raised.

Characteristics of a Company Meeting:

The characteristics of a company meeting is as follows:

1. Two or more persons (who are the members of the Company) must be present at the meeting.

2. The assembly of persons must be for discussion and transaction of some lawful business.

3. A previous notice would be given for convening a meeting.

4. The meeting must be held at a the particular place, date and time.

5. The meeting must be held as per the provisions/rules of Companies Act.

• Statutory Meeting

Every company limited by shares and every company limited by guarantee and having a share capital shall, within a period of not less than one month and not more than six months from the date at which the company is entitled to commence a business, hold a general meeting of the members of the company.

This meeting is called the ‘statutory meeting’. This is the first meeting of the shareholders of a public company and is held only once in the lifetime of a company.

Statutory report: The Board of directors shall, at least 21 days (based on Companies Act) before the day on which the meeting is to be held, forward a report, called the ‘statutory report’, to every member of the company.

Procedure at the meeting:

List of members,

Discussion of matters relating to a formational aspect,

Adjournment.

Objects of the meeting and report;

To put the members of the company in possession of all the important facts relating to the company.

To provide the members an opportunity of meeting and discussing the management, methods, and prospects of the company.

To approve the modification of the terms of any contract named in the prospectus.

Annual General Meeting:

Company to hold an annual general meeting every year. Every company shall in each year hold, in addition to any other meetings, a general meeting as its annual general meeting and shall specify the meeting as such in the notice calling it.

There shall not be an interval of more than 15 months between one annual general meeting and the other. But the first annual general meeting should be held within a period of 18 months from the date of its incorporation.

The Registrar may, for any special reason, extend the time for holding an annual general meeting by a period not exceeding 3 months. But no extension of time is granted for holding the first annual general meeting.

Every annual general meeting shall be called during business hours on a day that is not a public holiday.

It shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated.

As regards holding of the annual general meeting, no distinction is made between a public company and a private company.

A general meeting of a company may be called by giving not less than 21 days’ notice in writing.

Annual general meeting a statutory requirement: The annual general meeting of a company is a statutory requirement. It has to be called even where the company did not function during the year.

Canceling or postponing of convened meeting: Where an annual general meeting is convened for a particular date and notice is issued to the members, the Board of directors can cancel or postpone the holding of the meeting on that date provided power is exercised for bona fide and proper reasons.

Canceling of failure to hold an annual general meeting: If a company fails to hold an annual general meeting:

Any member can apply, to the Company Law Board for calling the meeting.

The company and every officer who is in default shall be punishable with a fine.

Powers of Company Law Board to call an annual general meeting: If the default is made by a company in holding an annual general meeting, any member of the company may apply to the Company Law Board for calling such a meeting.

Penalty for default: If the default is made by a company is holding a meeting in accordance with Company Law or in complying with any direction of the Company Law Board is calling a meeting, the company, and every officer of the company who is in default, shall be punishable with fine.

• Extraordinary General Meeting

A statutory meeting and an annual general meeting of a company are called ordinary meetings.

Any meeting other than these meetings is called an extraordinary general meeting. It is called for transacting some urgent or special business which cannot be postponed till the next annual general meeting.

It may be convened. (1) By the Board of directors On its own or on the requisition of the members; or (2) by the requisitionists themselves on the failure of the Board of directors to call the meeting.

The extraordinary meeting convened by the Board of directors. The Board of directors may call an extraordinary general meeting:

   - On its own. 

   - On the requisition of the members.

An extraordinary meeting convened by the requisitions Power of Company Law Board to order meeting: If for any reason, it is impracticable for a company to call, hold or conduct an extraordinary general meeting, the Company Law Board may call an extraordinary meeting.

5.3 – Notice of meeting & Agenda of the meeting, proceedings of the meeting

Notice of a Meeting:

When a meeting is to be convened, a notice is required to be sent to all who are to attend it.

It should satisfy these conditions:

1. It should be under proper authority

2. It should state the name of the organisation

3. It should state the day, date, time, and place. Also, sometimes, how to reach the place

4. It should be well in advance. Some require seven days’ notice, some 48 hours’

5. It should state the purpose and, if possible, the agenda

6. It should carry the date of circulation and convener’s/secretary’s signature

7. It should go to all persons required at the meet

8. It should mention the TA/DA etc. payable and the arrangements for this

In practice, it is necessary to ensure that the notice has reached in time. This may be done telephonically. Dispatch section and post are prone to delays

We often find that between the date of a letter from a major public organization and the postmark on the letter, there is a gap of 10-12 days. A notice that should reach seven days before a meet should not reach seven days after the meet.

Agenda:

As stated earlier, an agenda is the list of items to be considered at a meeting. It is also called business or order of business. It comes from the Latin word agendum (singular) which means ‘a thing to be done.’ But agenda (the Latin plural) is used as a singular noun.

It is the route map of the meeting. The specimen notices above already contain a hint of how it is written. The agenda may be a part of the notice or may be attached as an annexure. The convenor/secretary prepares it in consultation with the chairperson and gets his approval.

The items of the agenda should cover all that is necessary to be considered at that time. Meetings take time and effort to arrange; hence the agenda has to be well thought out.

The items may be devised from:

(a) Previous minutes

(b) Suggestions received

(c) Actions and events since last meeting

(d) Correspondence of the organization

The agenda contains routine items as well as special ones.

Here are some guidelines for listing the items:

1. Apologies from absent members (need not be written previously)

2. Condolences if any (may or may not be written previously)

3. Reading and approval of minutes of the last meet

4. Matters arising out of previous meet’s minutes (this need not always be mentioned)

5. Urgent and non-controversial items

6. Matters requiring closer discussion and debates

7. Any new, on-the-spot items with the approval of the chairman

8. Date of the next meet.

5.4 - Voting methods of meeting and quorum. Minutes proceeding of meetings, its contents

• Meaning of Voting:

The word vote has come from the Latin word votum which means a vow or wish. Voting means formally expressing pinion or wish in response to a proposed decision or as an indication of approval or disapproval of a proposal or candidate for office.

At a meeting voting takes place for both the purposes:

(a) Expressing opinion in favour or disfavour of a proposal and

(b) Choosing a candi­date for office. Voting is also known as ascertaining the sense of the house. House means all the members present taken together.

Importance of Voting:

The importance of voting at a meeting is very great. It is a common feature of a meeting. The members come to a meeting to exercise their voting rights. On voting the entire democratic process- of decision-making depends.

The chairman has one of the major responsibilities to see that voting takes place in the most fair and free manner. The secretary helps the chairman in making the arrange­ment for voting and in the counting of votes. Unless the voting takes place in the proper manner, decisions taken at a validly con­vened and constituted meeting shall not be bidding on the members.

Procedures/methods of Voting:

There are two distinct procedures of voting:

Open and Secret.

Open type of voting means every member present can see to which side every other member is voting. In the case of secret voting, no one can see it. Voting on delicate and confidential issues must follow the secret procedure.

1. Open Procedure:

There are different methods of the open procedure of voting as described below:

(a) By Acclamation:

Voting can be done or opinion can be ex­pressed by acclamation or some outward expression of approval by clapping of hands or thumping on the table. Generally, any non-contro­versial issue or a matter of rejoicing for the members as a whole is approved by acclamation. Under this method, actual counting of votes does not take place.

(b) By Voice:

Under this method the chairman requests the members to give their voice first who are in favour of the issue and then requests those to give their voice who are against the issue. Those who are in favour, shout ‘Aye’ (Aye means Yes) and those who are against, shout ‘No’. The voices are taken separately and the chairman has to judge whether the ‘Ayes’ are stronger or the ‘Noes’ and accor­dingly declares the result.

(c) By Show of Hands:

Under this method, every member raises one hand only once either in favour of or against any issue or a candidate for office. The chairman, requests the members to raise their hands first who are in favour of the proposal or candidate and then requests those are against. Raising of hands takes place twice and separately and the chairman counts the hands in each case and accordingly declares the results.

(d) By Standing:

Under this method, instead of raising hands (as above) the members, at the request of the chairman, stand up separately – first those who are in favour and then those who are against. At a big gathering, it is difficult to detect whether a member is standing up twice. It has all the characteristics of the method of voting by show of hands.

(e) By Division:

This is an improvement on the method of voting by standing. The chairman requests that those who are in favour of the issue should occupy the seats on the right-hand side of the chairman and those who are against on the left-hand side. This is more or less a fool-proof method as there cannot be double voting by the same member as possible in the other two methods as in (c) and (d).

2. Secret Procedure:

Voting can take place secretly so that nobody knows to which side the other member is casting his vote. This can be done by ballot.

(a) By Ballot:

Under this method, every member is supplied with one or more than one (in case of a Poll—see below) ballot paper 011 which he records his opinion or vote by a suitable mark, like a V or X. Then he drops the ballot paper in a sealed box kept for the purpose. A number of ballot boxes may be necessary if the number of members is very big. The ballot box is opened by the chairman in front of the tellers or scrutinizers (appointed by the different groups of members).

The votes are counted and the results are declared. Some ballot papers may be rejected because of any defect or fault in making the mark. Ballot papers are generally numbered bearing the seal of the associa­tion for safety otherwise false ballot papers may be entered into the box by some dishonest members.

The other two great advantages of this method are:

(1) Votes can be cast by post by those members who cannot attend the meeting physically and

(2) Votes can be cast by-poll. This method is practised at the general election in the country.

(1) Postal Ballot:

Under this method, serially numbered ballot papers are sent by post in sealed covers to the members, who, living at a distant place, are unable to attend the meeting physically. If postal ballots are allowed, voting becomes more representative. At the time of general election postal ballots are sent to those who, being government servants, are away on official duty.

The members or voters fill in the ballot papers and return them in sealed covers which are opened when the ballot box is opened for counting the votes. Big companies or big associations having members scattered all over the country follow this method of voting. Some difficulties may arise for irregularity in postal services.

(2) Poll:

Poll means tendering or offering vote by ballot to a specially appointed officer, called the polling officer. One individual entitled to vote may have more than one voting right. This is found in companies having a share capital. Under the Companies Act, poll means exercising voting right in proportion to shareholder’s contribution to the paid-up capital of a limited company having a share capital.

Meaning of minute

Minute is an official written statement of the motions and resolutions taken in a meeting. It is brief but a complete record of all discussions held among the members of the meeting. It is also defined as the official record of the proceeding of a meeting that should be needed to approve by the participating members of the meeting.

So, minutes are the brief and complete official written record of all discussion which is held among the members of the meeting.

Types of minute

Generally, the minutes of a meeting can be divided into two groups. They are the follows:

1. Minutes of narration: These minutes will be a concise summary of all discussions which took place, reports received, actions to be taken and decisions made. It includes:

Names of the participating members.

Name of the proposer and supporter.

Discussion summary. Resolutions.

2. Minutes of resolution: Minutes of resolution means the written statement of the decisions that have been taken and approved by the participating members of the meeting. Only the main conclusions which are reached at the meeting are recorded in minutes of resolution. These are usually used for minutes of AGMs and other statutory meetings.

Factors considered in drafting minute:

The following factors should be considered in drafting minutes of a meeting:

Name and address of the organization

• Name of the meeting
• Date, time and venue of the meeting
• Name of the chairperson
• Name and signature of the participating members
• Serial number
• Following the rules and structure of minutes
• Name of the prosper and supplier of resolutions
• Number of regret letters
• Easy and understandable language
• Divisions

Video Lecture Links:

5.2 https://youtu.be/d1pooaO5Awg

5.3 https://youtu.be/YcmueYwKweY

5.4 https://youtu.be/YnYuDqtzA24

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