Company law

COMPANY LAW
Presented by:
Arslan Asif
UNIVERSITY OF LAHORE
Lahore school of accountancy and finance

Topic to be discussed
• Meetings
• Characteristics
• Company meetings
• Statutory
• Annual General Meeting
• Extra Ordinary General Meeting
• Quorum for the meeting
• Proxies
• Resolutions
• Ordinary Resolutions
• Special Resolutions
• Political contributions by the company
• Gifts distributions by the company

MEETING
“Any gathering, assembly or coming
together of two or more persons for
the transaction of some lawful
business of common concern is
called meeting.”

CHARACTERISTICS OF MEETING
Two or more persons required
For some lawful business
Notice for intimation
Specified date, place and time
Company’s meetings governed by
provisions of company’s act

COMPANY MEETINGS
Shareholders meetingsShareholders meetings
Statutory Meeting
Annual General Meeting
Extra Ordinary General Meeting

STATUTORY MEETING
 First meeting of members of PUBLICPUBLIC limitedlimited
companycompany
 Held only once in the life of company
 Meeting must be held after 3 months and before 6
months from the date of entitlement to commence
business
 Business of meeting is to consider “statutory report”
 Statutory report should be sent to each member at least
21 days before the statutory meeting
 Statutory report contains brief account of the state of
company’s affairs since its corporation and business
plan

CONTENTS OF STATUTORY
REPORT
• Conveyed by the directors to each
member at least 21 days before meeting
• INCLUDES
• List of members
• Shares allotted and the amount received from them
• Particulars of the directors, managers and secretary
• Particulars of contracts that have to be approved
• The detail of company’s affairs along with fees and
brokerage paid
• Report shall be certified by chief executive and two
directors
• Report should be accompanied by an auditor’s
certificate in respect of cash received against shares
and receipts and payment of company
• 5 copies of report must be filed to the registrar

ANNUAL GENERAL MEETING
 Must be held every year
 Must be held by every type of company, public or private, limited by
shares or by guarantee, with or without share capital or unlimited
company, once a year
 The first AGM is to be held within eighteen months of incorporation
 Every subsequent(coming) AGM is to be held within four months of
the closing of the company’s annual financial year or 15 months from
the last meeting whichever is earlier
 Notice of the date of the meeting is to be send twenty one days before
such date to the shareholders whereas in case of a listed company the
notice is also required to be published in the newspaper
 The gap between two AGMs should not be more than fifteen months
 In case of default in complying with any of these requirements all
officers to such default shall be held liable

AGENDA OF AGM
In this meeting the following matters are usually
considered:
•Annual accounts of the company
•Declaration of dividend
•Retirement and appointment of auditors
•retirement and appointment of Directors

(EGM)

All general meetings of a company , other than AGM and the
statutory meeting are called Extra Ordinary General Meeting.
Such meetings are called to deal with some urgent special
business that can not be postponed till the AGM
These meetings are called by following ways:
Calling of EGM by Directors
Calling of EGM by Directors on request of members

1.Calling of Extra Ordinary General Meeting by
Directors:
The directors may at any time call the Extra Ordinary General
Meeting of the company to consider any matter which requires the
approval of the company and can’t be postponed till general meeting
2. Calling of Extra Ordinary General Meeting on the
Requisition of Members:
The directors shall, on the requisition of members representing the one
tenth of the voting power on the date of deposit of requisition,
forthwith to proceed to call an extra ordinary general meeting

Requirements of Calling Extra Ordinary General
Meeting on the Requisition of Members
•The requisition shall state the objects of the meeting.
•It will be signed by the requisitionists.
•The requisition will be deposited at the registered office of the
company
•If the directors do not proceed within the twenty-one days from the
date of the requisition being so deposited to call a meeting, the
requisitionists may themselves call the meeting
•The meeting so called shall be held within three months from the date
of depositing such requisition.
•The meeting will be called in the same manner as the meetings are
called by directors
•Expenses of the meeting shall be borne by the company

QUORUM FOR THE MEETING
Quorum is the minimum number of members required to attend a
meeting and transact business validly. In other words, it is the
minimum number of members who must be present at a meeting for the
purpose of transacting business validly
Provisions relating to quorum:
In case of single member company
 The single member present in person or proxy
In case of Listed company
 Ten members, personally present, representing 25% voting powers either on
their own account or as proxies in meeting
In case of any other company
 Two members, personally present, representing 25% voting powers either on
their own account or as proxies in meeting

PROXIES
Proxy is the person appointed to vote and speak
on behalf of a member in General meeting of a
company
A member can’t appoint more than one proxy
A proxy must be a member unless article
declare a non-member as a proxy
Proxy can speak and vote at meeting
Proxy can demand a poll
Proxy can abstain from voting

Resolutions
Decisions of a company are made by resolutions passed by the
prescribed majority of the members present at the meetings or also
called the collective decision of the members in a general meeting
Resolutions are of 3 kinds
1.Ordinary Resolution
2.Special Resolution
3.Resolutions requiring special notice

Ordinary Resolutions
A resolution, which requires simple majority of the members
entitled to vote and voting in person, or where proxies are allowed,
by proxy, is called an ordinary resolution.
Some of the Ordinary resolutions:
 Issue of shares at discount
 Alteration of share capital
 Adoption of statutory report
 Passing of annual accounts and B/S, along with reports
of board of directors and auditors.
 Appointment of auditors and their remuneration

Ordinary Resolutions
A special resolution is one passed at a general meeting of a
company when:
•Not less than twenty one days notice has been given
•The notice specifies the intension to propose the resolution as
special resolution
•By a majority of the three fourth of such members entitled to vote
as are present as proxy
Some special resolutions:
 Alteration of object clause of memorandum
 Change of name of a company with consent of central govt.
 Alteration of the articles of a company.
 Variation of shareholders rights.
 Payment of interest out of capital.

Resolution Requiring special notice
• Provision in this act or in the articles, special notice is required
• Notice of the intension to move the resolution shall be given to
the company not less than 14 days before the meeting
• The company must give to its members- notice
• Advertisement in a newspaper

POLITICAL CONTRIBUTIONS
A company cannot contribute and donate any amount to
the following:
Any political party
Any political leader
A person contesting an election
In case of contravention a fine not exceeding of rupees
500000 may attract for every defaulting officer of the
company

GIFTS DISTRIBUTIONS
Companies are prohibited from distributing any
gifts to its members in meetings of the company.
In case of contravention fine not exceeding of
Rupees 500000 may attract to every defaulter
officer of the company.

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