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Shareholders' Meetings 👥

1. Statutory Meeting (ABOLISHED) ❌

Was Required: For public companies, first meeting after IPO within 6 months. Status: Abolished by Companies Act 2013 (Amendment 2015). Reason: Reduced regulatory burden, not very useful.

(Mentioned for exam knowledge - you may see old questions on this)

2. Annual General Meeting (AGM) 📅

Definition (Section 96): AGM is a mandatory yearly meeting of shareholders.

When to Hold:

  • Within 6 months from end of financial year.
  • Gap between two AGMs ≤ 15 months (can be extended by Registrar for special reasons).

Where: At registered office or within city/town/village where registered office is located.

First AGM Exception:

  • New company can hold within 9 months of closing of first financial year.
  • No AGM needed in year of incorporation.

Business Conducted at AGM (Ordinary Business):

  1. Approval of Financial Statements (Balance Sheet, P&L).
  2. Declaration of Dividend.
  3. Appointment of Directors (retiring by rotation).
  4. Appointment/Remuneration of Auditors.
  5. Any other ordinary/special business (with notice).

Penalty for Not Holding AGM:

  • Company: Fine ₹1 Lakh + ₹5,000 per day of default.
  • Every director: Fine up to ₹1 Lakh.

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3. Extraordinary General Meeting (EGM) ⚡

Definition (Section 100): Any general meeting other than AGM is an EGM.

Purpose: To discuss urgent matters that cannot wait till next AGM.

When Held: Anytime (as required).

Who Can Call EGM?

  1. Board of Directors (most common).
  2. Requisitionists (Shareholders holding ≥ 10% voting power):
    • They submit written request to Board.
    • If Board doesn't call within 21 days, requisitionists can call within 45 days.
  3. Tribunal (NCLT): In extraordinary situations or disputes.

Notice: 21 days (can be shorter with 95% members' consent).

Business at EGM:

  • Usually special business (not routine).
  • Examples:
    • Issue of new shares.
    • Alteration of Articles.
    • Merger/Acquisition approval.
    • Removal of director.

Comparison: AGM vs EGM 🆚

FeatureAGMEGM
FrequencyOnce a year (mandatory).As needed (optional).
PurposeRoutine business.Urgent/special matters.
Who CallsBoard (mandatory).Board/Requisitionists/Tribunal.
Penalty if Not HeldYes (Fine).No (not mandatory).

Quiz Time! 🎯

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💡 Final Wisdom: "AGM is routine. EGM is urgent. Both protect shareholder democracy!" 🗳️

Next up: Board Meetings - Where directors meet! 🏢

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