Various meeting required to be convened under the Companies Act, 2013

‘Meetings’ in a corporate functioning set up are essentially crucial for smooth functioning of any organization and discuss on various aspects of business including discussion upon business strategies, approval of key matters, ensuring compliance etc.

Every company registered under the Companies Act, 2013 (“Act’’) is required to convene several meetings depending upon the type of company and various thresholds applicable to them. Different meetings serve different purposes. Various types of meetings as applicable under the Act are as follows:

Board Meeting-

As per Section 173 of the Act, every company registered under the Act is mandatorily required to hold the first board meeting within 30 (thirty) days from the date of incorporation and thereafter at least 4 (four) board meetings during the calendar year and the gap between two meetings should not be more than 120 (One Hundred and Twenty) days. For companies which fall under the purview of small company, one person company dormant company or private company recognized as start-up, may hold one meeting in each of the half year and the gap between the two meetings should not less than 90 (Ninety) days. Some of the important businesses that are transacted in the board meetings includes deriving and approving the business strategies, discussion on the functioning of business, setting business goals, approval of financial decisions etc. The board meetings can be held at any day, time and place.

Extra Ordinary General Meeting (EGM)-

EGM is the meeting of shareholders which is held to transact certain urgent matters which cannot wait until the AGM of the company. The authority to call the EGM is enshrined under Section 100 of the Act and it can be held at any place within India. However, the EGM of the whole owned subsidiaries of a company incorporated outside India, can be convened outside India. Furthermore, the EGM can be held on any day and at any time.

Annual General Meeting (AGM)-

AGM is the annual meeting of the members of the company. As per Section 96 of the Act, an AGM is required to be convened within 6 (six) months from the end of the financial year, ensuring a gap of not more than 15 (fifteen) months between two AGMs. This meeting is primarily conducted to review the company’s financial performance for the year and to outline the roadmap and objectives of the company for the upcoming year. AGM should be held during business hours, between 9:00 a.m. and 6:00 p.m. on any day except a national holiday. Furthermore, an AGM should be held either at the registered office of the company or at some place with in the same city, town or village in which the registered office of company is located. However, AGM of an unlisted company may be held at any place in India, if prior consent is received from all the members.

Independent Directors’ Meeting

As per Section 149 of the Act, the following classes of companies (except the unlisted public companies which fall under the definition of joint venture, wholly owned subsidiary and dormant company) are required to have independent directors on the board of the company

Every listed public company;
public companies having paid up share capital of INR 10 crores (Indian Rupees Ten Crores) or more;
public companies having turnover of INR 100 crores (Indian Rupees One Hundred Crores) or more;
public companies having in aggregate outstanding loans, debentures, and deposits exceeding INR 50 crores (Indian Rupees Fifty Crores)

As per Schedule IV of the Act, the independent directors should hold at least one separate meeting in a financial year without the presence of non-independent directors and members of management. The said meeting is conducted to review the performance of non-independent directors, chairperson of the company, assessing the quality and timeliness of flow of information with the board and management.

Committee meetings

Audit Committee Meeting

As per Section 177 of the Act, the following classes of companies are required to constitute an audit committee of the board:

Every listed public company;
public companies having paid up share capital of INR 10 crores (Indian Rupees Ten Crores) or more;
public companies having turnover of INR 100 crores (Indian Rupees One Hundred Crores) or more
public companies having in aggregate outstanding loans, debentures, and deposits exceeding INR 50 crores (Indian Rupees Fifty Crores)

As per Regulation 18 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 “SEBI (LODR), 2015”, the audit committee shall meet at least 4 (four) times in a year with a gap of not more than 120 (One Hundred and Twenty) days between two meetings.

Furthermore, the Audit Committee deliberates on specific matters, primarily concerning the financial aspects, the appointment of auditors and audit process, related party transactions, internal financials control, which may be specified by the board and prescribed under the Act and SEBI (LODR), 2015.

Nomination And Remuneration Committee Meeting (NRC Meeting)

As per Section 178 of the Act, the following classes of companies are required to constitute the NRC:

Every listed public company;
public companies having paid up share capital of INR 10 crores (Indian Rupees Ten Crores) or more;
public companies having turnover of INR 100 crores (Indian Rupees One Hundred Crores) or more;
public companies having in aggregate outstanding loans, debentures, and deposits exceeding INR 50 crores (Indian Rupees Fifty Crores

As per Regulation 19 of the SEBI (LODR), 2015, the NRC shall meet at least once a year. The NRC in their meetings determines and formulates policies relating to qualifications, positive attributes, independence of a director, identifying the persons who are qualified to be appointed as director or at senior management position, remuneration for the directors, key managerial personnel and other employees.

Stakeholders Relationship Committee Meeting (SRC Meeting)

As per Section 178 of the Act, every company having more than one thousand shareholders, debenture holders, deposit holders and any other security holders at any time during a financial year shall constitute the SRC, whose main purpose is to resolve the grievances of security holders.

As per Regulation 20 of SEBI (LODR), 2015, the SRC shall meet at least once a year.

Corporate Social Responsibility Committee Meeting (CSR Committee Meeting)

As per Section 135 of the Act, every company having a net worth of INR 500 crores (Indian Rupees Five Hundred crores) or more, or turnover of INR 1,000 crores (Indian Rupees One Thousand crores) or more or a net profit of INR 5 crores (Indian Rupees Five crores) or more during three immediately preceding financial years shall constitute a CSR Committee, which shall formulate and recommend to the board a CSR policy, recommending the expenditure on various CSR activities and monitoring the same.

The CSR Committee shall meet as often as necessary subject to the minimum number and frequency prescribed by any law or any authority or as stipulated by the board.

In conclusion, the Companies Act, 2013, outlines a broad framework for various kinds of meetings that are required to be convened. Each meeting serves its own purpose and is necessary to bring transparency for various stakeholders and effective decision-making. Conducting the meetings in accordance with the prescribed procedure and timelines not only keeps the company compliant with the legal provisions but is also necessary to achieve sustainable business growth.

Source: https://www.ahlawatassociates.com/blog/various-meeting-required-to-be-convened-under-the-companies-act-2013