3  Meetings of a Company and Memorandum of Associations

3.1 Meetings of a Company

Meetings are an essential part of a company’s governance process. They provide a formal platform for members, directors, and shareholders to make important decisions regarding the functioning of the company. These meetings ensure transparency, accountability, and compliance with legal requirements.

Under the Companies Act, 2013, companies are required to conduct various types of meetings with prescribed procedures and documentation.

Definition

A meeting is a gathering of two or more persons for discussing matters of common interest. In a company, it refers to an officially convened assembly where business decisions are proposed, deliberated, and resolved.

3.1.1 Types of Company Meetings

Company meetings can broadly be classified into:

1. Shareholders’ or Members’ Meetings
   These are meetings of the company’s members (i.e., shareholders).

• Annual General Meeting (AGM)
  Mandatory for all public companies (Section 96 of Companies Act, 2013).

  • Must be held every calendar year.
    
  • First AGM within 9 months from the end of the first financial year.
    
  • Main agenda: Approval of financial statements, declaration of dividends, appointment of auditors, etc.

  Infosys Ltd. conducts its AGM annually to present audited financial reports and declare dividends.

• Extraordinary General Meeting (EGM)
  Any general meeting other than the AGM. Convened for urgent or special business decisions.

  A company may call an EGM to approve a merger or issue of fresh capital.

• Class Meetings
  Held for specific classes of shareholders (e.g., preference shareholders) to decide matters that affect only their interests.

  Example: Separate meeting of preference shareholders to approve changes in dividend rights.

• Statutory Meeting
  Held only once by a public company within 6 months but not earlier than 1 month from incorporation.

  • Purpose: Inform members about financial status and business affairs.
    
  • Requires a Statutory Report to be submitted to shareholders and the Registrar of Companies (ROC).

  A newly incorporated public company must conduct its statutory meeting to present its financial status to members.

2. Board Meetings
   Meetings of the Board of Directors are essential for policy decisions and day-to-day governance. Governed under Section 173.

   • First board meeting must be held within 30 days of incorporation.
   • Thereafter, at least four meetings must be held every year, with a maximum gap of 120 days between two meetings.

   The Board of HDFC Bank meets quarterly to review performance and approve business strategies.

3. Committee Meetings
   Subsets of the Board such as Audit Committee, CSR Committee, Nomination & Remuneration Committee conduct meetings for specific tasks as per SEBI and Companies Act guidelines.

   The Audit Committee of a listed company meets to review internal controls and financial statements.

4. Creditors’ Meetings
   These meetings are held when a company is undergoing restructuring or liquidation. Creditors meet to approve arrangements under insolvency or compromise proposals.

   Under the Insolvency and Bankruptcy Code (IBC), financial creditors meet to approve a resolution plan.

3.1.2 Legal Provisions Related to Meetings

• Notice of Meeting
  A formal written notice must be sent to all eligible members/directors at least 21 clear days prior to a general meeting (Section 101).

• Quorum
  Minimum number of members required to legally conduct a meeting.

  • For a private company: 2 members
  • For a public company:
    • 5 members (if total members ≤ 1000)
    • 15 members (if total members > 5000)

• Resolution
  A formal decision passed at a meeting. Types include:

  • Ordinary Resolution (simple majority)
  • Special Resolution (requires ≥ 75% majority)

• Minutes of Meeting
  Written record of proceedings of the meeting must be prepared and signed. It serves as legal evidence of the decisions taken.

3.1.3 Summary Table: Types of Company Meetings

Type of Meeting	Who Attends	Purpose/Agenda	Governing Section
Statutory Meeting	Shareholders (Public Co.)	Present financial status post-incorporation	Sec. 165 (Companies Act, 1956)
Annual General Meeting	Shareholders	Approve accounts, appoint auditors, declare dividend	Sec. 96
Extraordinary General Meeting	Shareholders	Approve urgent/special matters	Sec. 100
Class Meeting	Specific class of shareholders	Matters affecting class rights	Sec. 48
Board Meeting	Board of Directors	Policy decisions, oversight, strategic issues	Sec. 173
Committee Meetings	Members of specific committees	Audit, CSR, Nomination & Remuneration functions	Sec. 177, 178
Creditors’ Meeting	Company creditors	Approve insolvency resolution or compromise plans	IBC and Companies Act, 2013

3.2 Memorandum of Association

The Memorandum of Association (MoA) is a foundational legal document required for the incorporation of a company in India. It defines the scope of a company’s operations and establishes its relationship with the outside world. No company can undertake activities beyond what is stated in its MoA.

3.2.1 Definition

As per Section 2(56) of the Companies Act, 2013:

“Memorandum means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act.”

In simpler terms, the MoA is a company’s charter — a document that outlines the purpose, objectives, and limits of power within which a company must operate.

3.2.2 Purpose of MoA

• Acts as the company’s constitution.
• Informs shareholders, creditors, and the public of the permitted range of activities.
• Defines the company’s relationship with external stakeholders.
• Provides the legal boundary for a company’s operations. Any act beyond it is considered ultra vires (beyond authority) and is void.

Example: If a company is incorporated to manufacture furniture, it cannot legally start a hospital unless its MoA includes that object.

3.2.3 Contents of MoA (Clauses)

According to Section 4 of the Companies Act, 2013, the Memorandum must contain the following six essential clauses:

• 1. Name Clause
  Specifies the legal name of the company.

  • Private companies must end with “Private Limited”
    
  • Public companies with “Limited”

  Example: “ABC Technologies Private Limited” (for a private company)

• 2. Registered Office Clause
  Indicates the state in which the company’s registered office is located. It determines jurisdiction for ROC filings.

  Example: “The registered office of the company is situated in the State of Maharashtra.”

• 3. Object Clause
  Defines the purpose for which the company is incorporated and its intended business activities. It has two parts:

  • Main Objects: Core business functions
  • Ancillary Objects: Supporting or related activities

  Example: “To manufacture and sell solar panels and related products.”

• 4. Liability Clause
  States the liability of members, whether limited by shares or by guarantee.

  Example: “The liability of the members is limited to the amount unpaid on their shares.”

• 5. Capital Clause
  Specifies the company’s authorized share capital and its division into shares.

  Example: “The authorized share capital of the company is ₹10,00,000 divided into 1,00,000 equity shares of ₹10 each.”

• 6. Subscription Clause
  Contains the declaration by initial subscribers (founders) agreeing to form the company and take up shares.

  Example: “We, the several persons whose names and addresses are subscribed, are desirous of being formed into a company…”

3.2.4 Legal Provisions for Alteration

• A company may alter its MoA by passing a special resolution and filing with the Registrar of Companies (ROC).
• Some clauses (like the name or registered office) require approval from the Central Government or Regional Director, depending on the change.

3.2.5 Importance of MoA

• Serves as a contract between the company and its members.
• Acts as a public document, accessible to investors, creditors, and regulators.
• Helps ensure transparency and legal compliance.
• Restricts the company from entering into ultra vires contracts.

3.2.6 Summary Table: Clauses in MoA

Clause	Purpose
Name Clause	Specifies the legal name of the company
Registered Office	Defines the state of incorporation and ROC jurisdiction
Object Clause	Lists the main and ancillary business purposes
Liability Clause	States members’ liability status (limited/unlimited)
Capital Clause	Details authorized capital and its division
Subscription Clause	Contains signatures of the founding members agreeing to incorporate the company