Board Meeting, Annual General Meeting & Extra-ordinary general meeting

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Board Meeting, Annual General Meeting & Extra-ordinary general meeting

In the corporate world, meetings are a formal gathering of two or more people to discuss work-related issues, make corporate decisions, or to team up on business projects. Owing to the Companies Act, 2013, meetings have become a mandatory requirement for all companies, including start-up companies incorporated as private limited companies.

Every business entity needs to conduct meetings to focus on business objectives and ensure successful execution of business plans. Such meetings are typically held by the Board of Directors. 

In this blog post, we will discuss the major types of meetings held in a company: Board Meeting, Annual General Meeting and Extraordinary General Meeting. If you’re planning to open a company, then going through this article is highly recommended!

Major Types of Company Meetings

To ensure compliance with the Companies Act, 2013, companies such as private limited companies and public limited companies need to conduct three major types of company meetings namely:

• Annual General Meeting (AGM)

• Extra Ordinary General Meeting (EGM)

• Board Meeting (BM)

Now, we will explain each type of aforementioned company meeting. 

Annual General Meeting (AGM)

As implied by the word 'annual,' the Annual General Meeting refers to a meeting held annually i.e., once every year. Every company registered under the Companies Act, 2013 must hold an AGM, except for companies established as One Person Companies.  

An AGM generally consists of the board of directors, senior management personnel, shareholders and the auditors for the purpose of transacting ordinary business. At the time of AGM, the company's annual report needs to be presented by the directors to everyone gathered in the meeting. The primary purpose of conducting an annual general meeting is to discuss a variety of business topics related to financial reporting, shareholder engagement, corporate governance, and decision-making. 

The first annual general meeting of a company shall be mandatorily held within 9 months from the closure of the financial year and a subsequent annual general meeting shall be held within 6 months from the closure of the financial year. 

Additionally, the gap between two meetings shall not be more than 15 months, as required by the Companies Act, 2013. To conduct AGM, a ‘21 clear days’ notice shall be sent to every member before the date of the meeting. The term ‘clear days’ refers to the days of the week, including working days, weekends, and bank holidays.

If everyone who is eligible to vote at the meeting agrees, a shorter notice period may be used. In this situation, shareholders must be made aware of their option to choose a proxy to attend on their behalf. To ensure that proxies are valid and effective, the company must receive proxy forms at least 48 hours before the annual general meeting is held.

Extra Ordinary General Meeting (EGM)

As implied by the word ‘extra’, the extra ordinary general meeting refers to an extra meeting apart from the annual general meeting which is convened by the directors of the company. An EGM is called by a company to discuss urgent or special business matters, such as amendments to the company's articles of association, mergers, acquisitions or appointment/removal of directors.

When the board of directors cannot wait until the next annual general meeting then there is a need to convene an Extra Ordinary General Meeting. It cannot be held regularly unlike the regular board meetings.

The notice period for an EGM is usually 21 days. However, an EGM can be held on shorter notice than the standard 21 days provided that at least 95% of the members entitled to vote agree to it.

Board Meeting (BM)

Board Meetings refers to the meeting of the Board of Directors of the company. This meeting is conducted by the directors of the company. To ensure compliance with the Companies Act, 2013, the first board meeting shall be held within 30 days from the date of incorporation of the company. 

At least four board meetings shall be held in every calendar year. The maximum gap between two board meetings of a company shall be 120 days, as per Section 173 of the Companies Act, 2013. 

Quorum of board meeting shall be at least 1/3 of the total strength or two directors whichever is higher. If the board meeting is not held due to a lack of quorum, it is usually adjourned to the same time and place the next week.

Role of Board of Directors in Holding Meetings

The board of directors is a group of people who are appointed by the shareholders to represent their interests in the company. For the governance of companies registered under the Companies Act, 2013, board meetings play an important role. 

For making policy changes and taking major business decisions, the board of directors is considered the supreme authority in the company. It is responsible for holding all three major types of company meetings i.e., board meeting, annual general meeting and extraordinary general meeting. Before these meetings are conducted, the board of directors ensures notice is sent to all the directors in advance with date, time and place of meeting. 

During the meetings, the board reviews the company's performance, including reports and future plans. It also ensures that the minutes of meetings are documented. Further, to protect shared information and maintain trust amongst stakeholders, the board members ensure confidentiality of the meetings. 

Board Meeting, AGM & EGM: Differences

The points of differences between Board Meeting, Annual General Meeting and Extraordinary General Meeting are discussed below:

• Number of Meetings in a Financial Year: One annual general meeting must be held in a year but the numbers of board meetings are at least 4 and there are no criteria for such number meetings in case of EGM.

• Notice for Convening the Meeting: For conducting an AGM and EGM, at least 21 clear days notice shall be given to every member, and in case of Board meeting, 7 days notice is required.

• Time Gap between Two Meetings: Not more than 15 months elapse between two AGMs and the time limit of two consecutive board meetings is not more than 120 days but in case of EGM there is no time period requirement between two consecutive meetings.

• Time Limit for Conducting Company’s First Meeting: First annual general meeting must be held within 9 months from the closure of the financial year and in case of first board meeting time limit is within 30 days from the date of incorporation of the company. In case of EGM, the time limit for the first meeting is not specified.

• Scheduling of Meeting: Both the AGM and Board meetings must be held within the same calendar year, while an EGM can be held at any time when urgent matters need to be addressed, even if it's not within the same calendar year.

The board meetings, annual general meetings and extraordinary general meetings play an indispensable role to ensure the success for business entities. Through these major types of meetings, the strategies of the company can be decided and carried out successfully. 

If you want to set up a company in India, company registration with the Registrar of Companies (RoC) is a mandatory requirement. For successful company incorporation, connect with Registrationwala for assistance.

This post was originally published in 2022 and has been updated on December 31, 2024, to provide you with the most current and accurate information.

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