Secretarial standard on General meetings

Salient features of Revised Secretarial Standards for General Meetings – SS2

1)     Applies to a section 8 company also but all other provisions of the Act relating to the General meetings are still applicable to a section 8 company;

2)    In case of a nidhi company, general meeting notice need to be served individually only on members holding shares of face value of more than Rs.1000 or more than 1% of the paid up share capital of the company, whichever is less. For other members, notice is by way of a newspaper notice in a newspaper circulated in the place where registered office is situated and on the notice board of the company;

3)     In case of companies having a website, the notice shall simultaneously be hosted on the website till the conclusion of the meeting. In case of a private company, the notice shall be hosted on the website of the company, if any, unless otherwise provided in the articles. This is an additional compliance even for small private companies which have websites. Nowadays every small company has a website for its promotion etc. The word used here is “shall” instead of “may” so this mandates compliance by all companies having websites. This is an unnecessary burden on the private companies to comply with this requirement. The only alternative they have is to amend the articles to provide that the notice need not be hosted on the website of the company. 

4)    Route map of AGM is not necessary for a closely held private company, where only the Directors and their family members are the shareholders or a wholly owned subsidiary company. This is a welcome relief for the small private companies. The whole purpose of putting route map in the notice was infructuous.

5)    Notice of the annual general meeting shall also specify the serial number of the meeting. By serial number I am assuming the no. of annual general meetings held in a company since its inception.

6)   Consent for shorter notice for the general meeting can be received any time before the meeting commences. It means that consent can be received 10 minutes before the meeting starts also. Government is toting this as “ease of doing business” 

7)   The authority letter from corporates for the annual general meeting shall,

(a)          in case of remote e-voting, be received before close of e-voting;

(b)          in case of postal ballot, shall be received alongwith the postal ballot form; and

(c)          if he is attending the meeting, then the letter should be sent before the commencement of the meeting.

8)   Nidhi companies are not required to provide e-voting facilities to their members;

9)   In case of Nidhi, no member shall exercise voting rights on a poll in excess of 5% of the total voting rights of the equity shareholders;

10)In case of a private company, a member who is a related party is entitled to vote on such resolution. This was always the case under the earlier Companies Act, 1956 also, only it has now been codified in the Standards.

11) The results of the voting at the general meeting needs to be displayed for at least three days at the notice board of the company at its registered office and also its Head Office and Corporate Office wherever it is situated. This is over and above displaying of the results at the company’s website, if any.  Before amendment, the three days’ time limit was not specified. This is another example of compliance overreach.

12) At a poll at the general meeting, it is not necessary that one of the scrutinizer shall be the member of the company.

13) Minutes of the meeting can be maintained in electronic form and it need not have a timestamp.

14) Minutes if they are maintained in loose leaf form, shall be bound periodically, at least once in every three years.

15) Minutes Book shall be kept only at the registered office of the company, not at any other place.

16) No need for minutes to state the conclusion time of the meeting;

17) Most of the other amendments are either rectification of the drafting errors or aligning the standards to be in line with the Act and/ or Rules thereof.

Secretarial standard on Board Meetings

Salient features of revised Secretarial Standards -1 Board Meetings

1)      The SS1 is not applicable to section 8 companies (i.e. not for profit companies). However they are required to comply with the provisions of the Act relating to Board meetings;

2)      Board meetings can be held on National Holidays also, including the adjourned Board meetings;

3)      Proof of sending notice and its delivery shall be kept by the company for a period of not less than three years;

4)      Proof of sending agenda and notes on agenda and their delivery shall be maintained by the company for a period of not less than three years;

5)      Company can send notice and agenda by registered post or speed post apart from e-mail, of course. It cannot send by courier.

6)      Four Board meetings to be held in a calendar year with a maximum interval of 120 days between two consecutive meetings. The requirement of holding one meeting in every calendar quarter has been done away with.

7)      In a private company, interested Director shall be eligible to participate in such item after disclosure of his interest.

8)      Quorum for meetings of Committee shall be as specified by the Board. If not specified by the Board then all members of the Committee to be present at the meetings.

9)      Not necessary to maintain separate attendance register for meetings of the Board and Committee;

10)   If attendance register is maintained in loose leaf form, then it shall be binded once in three years;

11)   After a person has ceased to be a Director, he has no right to inspect the attendance register of directors;

12)   The attendance register to be maintained for a period of at least 8 financial years from the last entry made and thereafter destroyed with the approval of the Board.

13)   The company may maintain its minutes in physical or electronic form. No need of timestamp required.

14)   Minutes need not mention the conclusion time of the meeting;

15)   All appointments one level below the KMP level need not be noted by the Board;

16)   Draft minutes need not be sent to the directors who did not attend the Board/ Committee meeting;