By Anika Mardiah Chowdhury
It is essential to hold company meetings regularly to run the company’s affairs. Several types of meetings must be held on a yearly and quarterly basis. In this article, the annual general Meeting and board meeting will be discussed broadly.
Firstly, the annual general Meeting of a company is required to be held once every calendar year. The members of the company attend the Meeting. In other words, this Meeting is the mandatory yearly gathering between shareholders and directors. It is to be mentioned that a company’s first annual Meeting must be held within sixteen months from the date of incorporation. Section 18 of the Companies Act, 1994 states that there must not be more than fifteen months’ elapse from the date of one annual general Meeting to that of the next year. There must be one Meeting held each year.
Notice: twenty-one (21) days notice shall be given in writing stating the time, place & agenda. A shorter time of notice shall be sufficient if all the members so agreed in writing are entitled to attend and vote so agreed in writing. The notice must be sent by hand or by ordinary post or any other post or e-mail where there is no possible way. Then, the notice can be served in a newspaper with wide circulation at least seven days before the Meeting. In the Case of companies such as HavinCasewebsite, such notice shall simultaneously be hosted on the website.
The board of directors calls the General Meeting after the closing financial year and discharges all other functions as mentioned in the Companies Act, 1994. Notice shall specify the nature of the Meeting. It is to be mentioned that in the notice, the object or purpose of the Meeting must be stated as in the Case of Young vs. LadieCasemperial Club [1920] 2 KB 523, it was held that as the notice of a meeting did not state the object of the Meeting with sufficient particularity, it was invalid. Consequently, the proceedings of that Meeting were invalidated.
A quorum must be present throughout the Meeting, and no business should be transacted when the Quorum is not present. The quorum of a meeting is at least two members, and in public companies, at least five members must be present.
Documents, the minutes of the previous year’s AGM must be presented and approved. Then, its annual financial statements and audit report, along with directors’ reports and others.
Conducting a General Meeting: The Meeting shall be convened by the Chairman of the board. If any director is unable to attend the Meeting, the Chairman shall explain the absence at the Meeting. The Chairman shall conduct the Meeting fairly and impartially. The Chairman shall regulate how voting is conducted at the Meeting in accordance with the provisions of the Companies Act, 1994. The Chairman shall explain the objective and implications of the resolutions before they are put to vote at the Meeting. Also, it shall provide members a fair opportunity and a facility for their members to exercise their voting rights if the Company has its equity shares listed on a recognized stock exchange.
A member may give his vote either personally or by proxy. Schedule I of the Companies Act 1994 provides the form for the appointment of a proxy, which the member shall sign. Suppose the member is a corporation or a company. In that Case, it shall be executed either under seal or in the hands of an officer or by a duly appointed attorney, and the executed instrument should be deposited at the Company’s registered office within forty-eight hours before the commencement of the Meeting. Whereas in United Western Bank Ltd (2002) 3 Comp LJ 247 (CLB) it was held that a proxy cannot be a company as a company, being an artificial entity cannot be present, vote or speak in a meeting. Therefore, a company cannot be appointed as a proxy.
After the voting, the scrutinizer shall submit a report on the total number of votes in favor or against the resolution and submit the same to the Chairman. This result shall be displayed for at least three days on the notice board of the Company at its Registered Office, Corporate Office, and Head Office. It shall be posted on the Company’s website.
Secondly, board meetings are conducted to approve statutory requirements and resolutions for the affairs of the company. The Secretary or a director of a company has the power to call board meetings. For the effective function of the Company, the board meeting plays a very important role.
According to section 96 of the Companies Act, 1994, every company meeting of its Board of Directors shall be held at least once every three months, and at least four such meetings shall be held every year.
Notice of Board Meeting: as per section 95 of the following Act, a notice of every Meeting of the Board of Directors of a company shall be given in writing to every director for the time being in Bangladesh and at his address in Bangladesh. The notice informs the members about the venue, date, time, and agenda of the Meeting. All types of companies are required to give notice at least seven days before the actual day of the Meeting.
Passing Resolution: The Board of Directors can exercise the following powers by passing a resolution in the meetings of the board, for example, making calls to shareholders, authorizing the securities and shares, issuing securities and shares, approving the financial statement, and others. It
In CaCasef failure to meet: it is to be mentioned that if any default is made in holding the Meeting, the Company and every officer of the Company who is in default shall be punishable under section 81 of the Companies Act, 1994 with a fine which may extend to ten thousand takas and in a case of continuing the default it will be two hundred fifty takas every day after the first day during such default continues.
If any company fails to hold a meeting and an application for condoning the delay in holding the Meeting is made before the High Court Division under Section 81(2) of the following Act, the Court, after perusing the merits of the Case, may alCaseor reject the application. Suppose the Court finds a prima facie case and thus admits the application. In that Case, CourCaseall gave the petitioner a clearance to publish the notice of the application in two national newspapers within the stipulated time as prescribed by this Court. On the other hand, if the Court finds merit after hearing the learned Advocate for the Petitioner and allows the application in such case, the Court sells giCaseirection to the RJSC to accept all fillings and returns accordingly if required, further imposing a fine on the Petitioner company. However, the Directors shall not be exempted from the responsibility of holding the General Meeting in any case.
From the Companies Act of 1994, it is not clear whether the penalty for failing to hold a meeting applies to all meetings or specific types. Hence, in the case MostofCasemal MCaseddin v Magura Paper Mills and others [2013] HCD [2014] LNJ 248. The wording of section 85(3) does not refer to an Annual General Meeting or Board meeting. Rather, it refers to a meeting of the Company, which has become impracticable to be conducted in the manner as laid down in the Articles of Association, and the expression ‘a meeting’ is wide enough to cover an AGM and EGM or a Board meeting, as the caspase. Also, Cases of obscuration in Md. Rezaul Hasan J was affirmed by the Appellate Division of the Supreme Court of Bangladesh in the case Md. RaCasel IslCases. Mostofa Jamal [2014] AD [2017] 2 ALR (AD) 2017 300 where it held t”at “This very section 85 is very much clear that the provisions provided in this section are with respect to all meetings, namely, annual general meeting, board meeting, and other meet”NGS.”
If you’re looking for expert legal services in Dhaka, our firm is proud to connect you with the top property lawyers in Dhaka. Our experienced legal professionals are here to assist with all your property-related legal needs.
In conclusion, it can be said that the Companies Act of 1994 clearly recognizes the importance of holding meetings, either general or board meetings.
