Secretarial Standards for General Meetings: Ensuring Compliance

Secretarial Standard II is crucial for companies to adhere to the provisions of the Companies Act, 2013, when conducting board meetings, general meetings, and annual general meetings. Issued by the Institute of Company Secretaries of India (ICSI) under Section 118(10) of the Companies Act, 2013, and approved by the Central Government of India, these standards are mandatory for ensuring smooth and compliant meetings. This article delves into Secretarial Standard II in detail.

Applicability of Secretarial Standards

Secretarial Standard II applies to general meetings of all companies incorporated under the Companies Act, except One Person Company (OPC). Consequently, all private limited companies and limited companies must follow Secretarial Standard 2 when conducting general meetings.

Convening a Meeting

According to Secretarial Standard II, a general meeting should typically be convened by or on the authority of the Board. If the Board fails to do so, the company’s members can approach the relevant authority to convene the meeting.

Notice of Meeting

Secretarial Standard II mandates providing written notice for every meeting to every member, director, auditor, secretarial auditor, debenture trustee (if any), and other specified persons. The notice must clearly specify the meeting details such as the day, date, time, full address of the venue, the nature of the meeting, and the business to be transacted.

Frequency of Annual General Meetings

All companies must conduct an annual general meeting within six months from the date of closing of the first financial year or within 15 months of the previous AGM, whichever is earlier. The first AGM for new companies can be held within six months from the close of the financial year.

Quorum

A quorum must be physically present throughout the meeting. The quorum size depends on the company’s nature:

Public Company

• 5 members for companies with up to 1,000 shareholders.
• 15 members for companies with more than 1,000 but less than 5,000 shareholders.
• 30 members for companies with more than 5,000 shareholders.

Private Company

• A minimum of two members should be present.

Presence of Directors and Auditors

If any Director cannot attend the meeting, the Chairman should explain such absence at the meeting. The Auditors and Secretarial Auditor, unless exempted by the company, should attend the General Meetings either by themselves or through their authorized representative. They have the right to be heard during the meeting.

Chairman

The Chairman of the Board must take the chair and conduct the meeting. In the absence of the Chairman, the Directors present can elect one of themselves to be the Chairman. If the Directors are unwilling, the members present can elect one of themselves to take the chair.

Voting

Every resolution should be proposed by a member and seconded by another member. The voting methods include:

• E-voting
• Polls
• Show of hands at the meeting

Reading of Reports

Any remarks on financial transactions or matters adversely affecting the company’s functioning, mentioned in the Auditor’s Report, should be read at the Annual General Meeting.

Distribution of Gifts

No gifts, coupons, or cash in lieu of gifts should be distributed to members at or in connection with the meeting.

Minutes

Minutes should be recorded in books for all meetings conducted, according to the Companies Act, 2013 provisions. They should contain a fair and correct summary of the proceedings, signed and dated by the Chairman of the meeting. Minutes should be preserved permanently in physical or electronic form with a timestamp. All minute books should be kept in the custody of the Company Secretary or any Director if there is no Company Secretary.

Key Revisions in Secretarial Standard II (Effective April 1, 2024)

• Unlisted companies can hold the Annual General Meeting (AGM) at any place in India with prior consent from all members in writing or by electronic mode.
• Extra-ordinary General Meetings (EGMs) can be held at any place in India. For wholly owned subsidiaries of companies incorporated outside India, EGMs can be held outside India.
• Notices and accompanying documents can be given at shorter periods with the requisite consent of members in writing or by electronic mode.
• Specific conditions for obtaining consent from members for shorter notice periods and resolutions passed by postal ballot.

Frequently Asked Questions

What is Secretarial Standard II?

Secretarial Standard 2 is a set of guidelines issued by the ICSI to help companies comply with the Companies Act, 2013, during general meetings.

Is Secretarial Standard II mandatory for all companies?

Yes, it is mandatory for all companies incorporated under the Companies Act, except One Person Company (OPC).

How often should a company conduct an annual general meeting?

Companies should conduct an annual general meeting within six months from the closing of the first financial year or within 15 months of the previous AGM, whichever is earlier.

What are the quorum requirements for a general meeting?

A quorum must be physically present throughout the meeting. The number of members required depends on the company’s nature.

Can the Chairman of the Board miss a general meeting?

If the Chairman cannot attend, the Directors present can elect one of themselves as the Chairman. If they are unwilling, the members present can elect one of themselves.

Conclusion:

Ensuring compliance with Secretarial Standard II is crucial for the smooth functioning of company meetings. InstaFiling offers comprehensive services to help companies adhere to these standards, from convening meetings to maintaining accurate minutes. Our expert team ensures your company remains compliant with all regulatory requirements, making your meeting processes seamless and efficient.