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

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

In today's world, meetings become the mandatory aspect for every company or you can say it is very essential for every start-up company which are incorporated as private limited company. Every business entity needs to conduct meeting for the success of their plans and goals. For managing your start up, the first important issue is to have a board of Directors. Board Management is essential for the survival of every start up and also board needs to have a proper skills and knowledge for managing a new business entity.

Now, according to Companies Act, 2013 general meeting refers to the meeting of shareholders and the board meetings refer to the meeting of directors. Here, in this article we will discuss about the three aspects of meeting i.e Board meeting, Annual General Meeting and Extra ordinary general meeting.

Kinds of Meeting

Following are the three kinds of meeting-

1. Annual General Meeting (AGM)
2. Extra Ordinary General Meeting (EGM)
3. Board Meeting (BM)

Both extraordinary general meeting and annual general meeting are formal types of company meetings but there is a difference between the two.

1. Annual General Meeting (AGM)

Annual General Meeting refers to the meeting which held once in every year. To hold AGM every year, is mandatory for every company. It is the meeting of company's executives, shareholders and directors for the purpose of transacting ordinary business. At the time of AGM, company's annual report need to present to everyone gathered in the meeting. First AGM shall be held within 9 months from the closure of the financial year and subsequent AGM shall be held within 6 months from the closure of the financial year and also the gap between two meetings shall not be more than 15 months. To conduct AGM, 21 clear days notice shall be given to every member before the date of the meeting. Here, 21 clear days means the day on which notice is issued and the day on which meeting is to be held are excluded.

2. Extra Ordinary General Meeting (EGM)

As the name suggests, Extra Ordinary General Meeting refers to the extra meeting apart from the Annual General Meeting which is convened by directors of the company. It is the meeting called for the purpose of dealing with any special business. Moreover, when the directors of the company cannot wait until the next annual general meeting then there is a need to convene Extra Ordinary General Meeting. It cannot be held regularly unlike the annual general meeting. In other words, EGM can be held in case of any urgent matter and it can be called upon shorter notice normally of 14 days.

3. Board Meeting (BM)

Board Meeting refers to the meeting of Board of Directors of the company. It is convened by directors of the company and 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 and the minimum gap between two board meetings shall not be less than 120 days. Quorum of board meeting shall be at least 1/3 of the total strength or two directors whichever is higher. If the meeting is not held for want of quorum then the same is adjourned for the same time, same place at next week.

Points of differences between Board Meeting, Annual General Meeting and Extra-ordinary general meeting -

1. NUMBER OF MEETINGS IN A FINANCIAL YEAR- One annual general meeting must be held in a year but the numbers of board meeting are at least 4 and there are no criteria for such number meeting in case of EGM.

2. 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.

3. TIME GAP BETWEEN TWO CONSECUTIVE MEETINGS- Not more than 15 months elapse between two AGM and the time limit of two consecutive board meetings are not more than 120 days but in case of EGM there is no time period requirement between two consecutive meetings.

4. TIME-LIMIT OF FIRST MEETING-First annual general meeting must be held within 9 months form the closure of financial year and in case of first board meeting time limit is within 30 days from the date of incorporation of the company but in case of EGM the time limit for first meeting is not specified.

5. HOLDING OF MEETING- Both AGM & Board meeting must be held in a calendar year but EGM can be held in any year not particularly in calendar year.

Therefore, these are the types of meeting through which the strategies of the company can be decided and prove to be a key to success for business entities.

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