Q.22 Explain the different types of meetings of Joint Stock Company?
When two or more persons sit together to solve any problem by a previous notice then it is called meeting or meeting may be defined as a gathering of two or more persons by previous notice or by a mutual arrangement for the discussion and transaction of some business.
When the members of the company gather at certain time and place to discuss the business and managing affairs it is called meeting of the company.
DIFFERENT TYPES OF MEETING OF JOINT STOCK COMPANY
It is the first meeting of a company’s shareholders. Its objective is to inform the shareholders about the affairs of the company. Statutory meeting is held once only in the whole life of the company. Statutory meeting is held by every limited company. Meeting should be held within the prescribed period mentioned in the company ordinance. Following are the important features of statutory meetings:
FEATURES OF STATUTORY MEETING
(1) Law relating to statutory meeting is contained in Section 157 of the Companies Ordinance, 1984.
(2) Statutory meeting is hold only by a public company. Private company need not hold such meeting.
(3) Statutory meeting is hold only once in life-time within not less then 3 months nor more than 6 months of the commencement of the business.
(4) The business at this meeting is to consider the statutory report.
(5) For statutory meeting 21-day notice is essential.
(6) Statutory meeting can be convened only by the director. Any members have no power to call such meeting. However, in case of default they can petition to court for winding up the company.
OBJECT OF STATUTORY MEETING
(1) Details of the formation of the company.
(2) To what extent the financial appeal to the public has been successful.
(3) What property has been acquired by the company in exchange for its issue capital?
(4) What has been done with the actual money received in payment of shares?
(5) Approve the modification of the terms of any contract disclosed in the prospectus.
(6) To discuss these or any other matters arising therein.
A company may be wound up by the court if default is mode in filing a statutory report or in holding the statutory meeting (Section 305 (1)(b) of the Companies Ordinance, 1984).
PERIOD OF METING
Statutory meeting can be held after three months from the date of commencement. But there should be no delay more than six months.
Before this meeting 21 days notice must be given to each shareholder by the secretary. A statutory report should also be enclosed with the notice.
CALL FOR MEETING
Only directors of the company are authorized to call the statutory meeting.
Section 153 (3) of the Companies Ordinance1984 says that statutory report is the report, which is sent by the Board of Directors to all the numbers of the company. Statutory report is to be circulated at least 21 days before the date of the statutory meeting to all the numbers. The statutory report shall be certified by not less than three directors-one of them whom shall be the chief executive of the company. In the statutory report following information is provided:
1. Total number of shares allotted.
2. Summary of cash received in regard to shares allotted.
3. List of basic expenses of the company.
4. Detail of commission for the sale of shares.
5. The particulars of that contract in which modification is being made.
6. The names and addresses of the company directors, auditors, managers and secretary.
The directors of the company have to forward a statement report to each member at least 21 days before the day of meeting. Not less than two directors must certify such report. A copy of statutory report must be filed with registrar’s office after forwarding it to members.
If a statutory meeting is not held in time of statutory report is not submitted in time then any shareholder can go to court.
ANNUAL GENERAL MEETING:
According to the Section 158(1) of the Companies Ordinance, 1984, a company must hold a general meeting within eighteen months of its incorporation and thereafter once at Least in every calendar year and not more than fifteen months after the last preceding general meeting.
Section 158 of the Companies Ordinance, 1984, provides that every company shall hold a general meeting as its Annual General Meeting. This meeting shall be convened and held by he directors and the members have no authority to convene such a meeting. In case of default, the company and every officer of the company are liable to a penalty.
NOTICE OF THE MEETING
The annual general meeting is to be called by order of the directors and under the instructions of any individual shareholder. A notice of convening this meeting is to be given to every member at least 21 days before the meeting.
1. Annual genera) meeting is held according the company ordinance.
2. It is the responsibility of company that it should call annual meeting.
3. First meeting should be held within 18 months from the date of incorporation.
4. The interval between the meetings should not be more than 15 months.
5. A notice of meeting should be served 21 days before the date of meeting.
6. The directors ill call this meeting.
7. If directors fail to call the meeting in due date then penalty can be impose on them.
1. Election of directors.
2. Appointment of Auditors.
3. Declaration of dividends.
4. Fixation of directors, auditors and managing agent’s remuneration.
5. Shareholders can criticize the policies of the directors.
6. Directors submit reports about the management.
7. Shareholders can suggest measures.
8. Auditors report and balance sheet is presented in this meeting.
EXTRA ORDINARY GENERAL MEETING
If any problem is created suddenly which cannot be postponed till the next annual meet it is conducted to solve this problem.
There is no prescribed time laid down in the articles for holding this meeting. It may be held from time to time.
RIGHT TO CALL MEETING
Board of directors may call the meeting at any time. Shareholders who have not less than of the voting power can call the meeting.
To call the extra ordinary meeting 21 days notice is served.
1. To issue debentures.
2. To alter the memorandum and articles.
3. To alter the share capital of the company.
4. To solve the most important problem.
The shareholders have to submit their demand to the secretary of the company. He will arrange to call the meeting with the consultation of the directors. If the directors fail to hold this meeting within 21 days, then shareholders may call such meeting within 3 months. The expenses of the meeting will bear the company.