Page 211 - DCOM404_CORPORATE_LEGAL_FRAMEWORK

Corporate Legal Framework

Notes Statutory Meeting (S. 165)

Some of the most important legal provisions regarding the statutory meeting are:
(i) It is required to be held only by a public company having a share capital. A private company
or a public company registered without share capital is under no obligation to hold such a
meeting.

(ii) It must be held within a period of not less than one month and not more than six months
from the date at which the company is entitled to commence business.
(iii) At least 21 days before the day of meeting, a notice of the meeting is to be sent to every
member stating it to be a Statutory Meeting.
(iv) The Board of Directors should also get a report, called the Statutory Report, sent to each
member along with the notice of the meeting. If the statutory report is forwarded later,
it shall be deemed to have been duly forwarded if it is so agreed to by all the members
entitled to attend and vote at the meeting. A copy of the Statutory Report should also be
sent to the Registrar after the same is sent to the members.
The Statutory Report contains (a) the total number of shares allotted – fully paid-up
and partly paid-up; allotted for cash and for consideration other than cash; (b) the total
cash received by the company in respect of all allotments; (c) an abstract of receipts and
payments up to a date within seven days of the date of the Report and the balance of cash
in hand; (d) any commission or discount paid on the issue of shares or debentures; (e) the
names, addresses and occupations of directors, auditors, managers and the secretary of the
company; (f) the extent to which any underwriting contract has not been carried out; (g) the
arrears due on calls from every director; (h) the particulars of any commission or brokerage
paid to any director or manager on the issue of shares and debentures.

The Statutory Report is required to be certified as correct by at least two directors, one
of whom shall be the managing director, where there is one. Also, the auditors of the
company shall certify that part of the Statutory Report which relates to the shares allotted,
each received thereon and the receipts and payments and the balance of cash in hand.

(v) The members present at the meeting may discuss any matter relating to the formation of
the company or arising out of the statutory report without previous notice having been
given.

(vi) The meeting may adjourn and the adjourned meeting has the same powers as the original
meeting. The adjourned meeting, therefore, may do anything which could have been done
by the original meeting.
(vii) If default is made in complying with the provisions of s.165, the following consequences
may follow:

(a) Every director or other officer of the company who is in default shall be punishable

with fi ne upto ` 5,000;
(b) The Registrar or a contributory may apply to the Court for the winding up of the
company [s.439]. However, the Court may, instead of passing an order for winding

up, give directions for the holding of the meeting or filing of the Statutory Report.
(viii) It should be remembered that this meeting is required to be held only once in the life time
of a public company, having a share capital.

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