How to become a member Number of members Rights and liabilities of members

1. Recap • How to become a member • Number of members • Rights and liabilities of members • A person may cease to become a member • Register of members.

2. MEETINGS AND PROCEEDINGS

3. Meetings • The Companies Act provides for the following types of meetings: A. Meetings of the shareholders: • Statutory Meeting • Annual General Meeting • Extra-ordinary General Meeting • Class Meetings under certain circumstances the Court can order certain meetings. • B. Other Meetings: • Meetings of the creditors • Meetings of the debenture holders.

4. Statutory Meeting[Section 157] a) Every public company shall hold a general meeting of the members of the company called statutory meeting after three months and before six months from the date of entitlement to commence of the business. b)The meeting shall approve a report called Statutory Report. c)The Statutory report shall be sent to each member at least 21 days before the statutory meeting.

5. Statutory Meeting[Section 157] The statutory report shall include : • Total number of shares allotted distinguishing between shares allotted for cash , other than for cash and the consideration for which they have been allotted. • Total cash received against shares allotted. • Summary of receipts and payments • Particulars of directors, chief executive, secretary, auditor and legal advisor. • Particulars of commission paid or to be paid on issue of shares • Particulars of any contract to be modified in the meeting • Extent of carrying out or not carrying out of any contract along with reasons for not carrying out.

6. Annual General Meeting (AGM) [Section 158] 1. The first annual general meeting of a company shall be held within 18 months from the date of its incorporation and thereafter at least once in a calendar year. 2. Subsequent meeting shall be held within four months from closure of its financial year or 15 months from the last meeting, whichever is earlier.

7. Annual General Meeting (AGM) [Section 158] 3.The SECP in case of listed company and the Registrar, in cases of other companies may extend the time for holding of such meetings. 4.No extension of time can be granted to any company for the first annual general meeting after incorporation. For subsequent AGM the period of extension cannot exceed 30 days.

8. Annual General Meeting • At least 21 days notice should be given to members .In case of listed companies such notice shall also be published in an Urdu and an English newspaper having circulation in the province in which the stock exchange, on which the company is listed is situated. • AGM of a listed companies is held in the town in which the registered office is situated. • AGM is called on the order of Directors and not of members.

9. Annual General Meeting • In case of default the company and every officer who is willfully a party shall be liable to • In case of listed company to a fine not less than 50,000 rupees and not exceeding 500,000/- rupees and to further fine not exceeding 2,000 rupees for every day during which the default continues • In case of any other company to a fine not exceeding 100,000 rupees and to a further fine not exceeding 500 rupees for every day during which is the default continues.

10. Extraordinary General Meeting (EGM) [Section 159] 1. All general meetings of a company other than annual general meeting and the statutory meeting are called extra-ordinary general meetings.

11. Extraordinary General Meeting (EGM) [Section 159] This meeting i. May be called by the directors on their own motion; ii. Shall be called by the directors on request of members representing not less than one-tenth of the voting powers; iii. May be called by the requisitionists, if directors do not proceed to call the meeting within twenty one days of dispositing the requisition.

12. Extraordinary General Meeting (EGM) [Section 159] • The requisition must be signed and state the object for calling the meeting • If directors, with in twenty one days from the date of deposit of the requisition, do not call the meeting, the requisitionists may call the meeting with in three months of depositing the requisition. • Any reasonable expenses incurred by the requisitionists due to failure of the directors to convene a meeting shall be repaid by the company to the requisitionists. • The notice of the meeting is required to be sent to the members at least twenty one days before the meeting. However the registrar may authorized holding of a meeting at a shorter notice.

13. Provisions as to notice • Notice shall state place, day and time of the meeting. • Notice shall be given to every member or his/her heirs and auditors of the company (Section 160). • Where any special resolution is to be passed in any AGM or EGM, a copy of the proposed resolution should also be sent with the notice of the meeting.

14. Business not considered as special business These businesses shall be treated as ordinary business for an AGM • Consideration of accounts, balance sheets and the reports of the directors and the auditors • The declaration of the dividend • The appointment and fixation of remuneration of auditors • And the election or the appointment of directors

15. Quorum Quorum means certain minimum number of members of a company as is fixed as competent to transact business in a general meeting of members in the absence of the other members. Any business transacted in a meeting with out quorum shall be void.

16. Quorum of Meeting • In case of listed company: Ten members, personally present, representing 25% voting powers, either on their own account or as proxies, in the meeting [Section160(2)(a)]. 2. In case of any other company: Two members, personally present, representing 25% of total voting powers, either on their own account or as proxies, in the meeting [Section160(2)(b)] 3. In case of single member company: Single member present in person or proxy [Section160(2)(c)].

17. Quorum not present If the quorum is not present at the meeting with in half an hour from the time appointed for the meeting it shall be • Dissolved if called on the request of members or • Adjourned to the same day in the next week at the same time and place if called by the directors • If the quorum is not present at an adjourned meeting with in half an hour the members present in the meeting if not less than two shall be a quorum

18. Who shall preside the general meeting? Chairman of board of directors shall preside the general meeting and in the absence of chairman a director shall preside. If none of director present or directors present are unwilling to chair the meeting, members shall choose any member as chairman.

19. Provisions Relating to Show of Hand • Resolution put to vote as any general meeting shall, unless a poll is demanded, be decided on the show of hands. • The chairman of the meeting shall declare the result of show of hands

20. Provisions Relating to Vote • Member shall have votes proportionate to be paid up value of the share held by him. • In a company not having share capital, each member shall have one vote • On a poll votes may be given personally or by proxy. • On show of hands every member present shall have one vote.

21. Provisions relating to Poll The list of those members who actually cast their vote at the meeting excluding those who stay away is called a poll. Demand for poll: On a demand made by the following persons or the chairman of the meeting may order to take a poll before or on the declaration of the result of the voting on any resolution on a show of hands • At least five members having the right to vote on the resolution and present in the person or by proxy in the meeting of public company. • Any member or member present in person or by proxy, having 1/10th of total voting power in respect of resolution.

22. Provisions relating to Poll • In the meeting of a private company: • By at least one member present in person or by proxy where not more than seven members having the right to vote on the resolution are present. • At least two members present in person or proxy where more than seven members having the right to vote on the resolution are present.

23. Time of Taking Poll[Section 168] • A poll demanded on the election of chairman or adjournment of meeting shall be taken forth with. In all other cases, polls shall be taken at such time as chairman of meeting may decide however, such time shall not be more than 14 days from the day from which it is demanded. • When a poll is taken the chairman or his nominee and a representative of the members demanding the poll shall scrutinize the votes given on the polls and the result shall be announced by the chairman. • Chairman shall have power to regulate the manner in which polls shall be taken.

24. Proxies[Section 161] Following are the provisions relating to proxy. • Proxy is a person appointed to vote and speak on behalf of the member in a general meeting of a company. • A member cannot appoint more than one proxy to attend any one meeting. • Proxy must be member unless article permit to appoint a non member as a proxy. • A notice of general meeting of a company should state the right of the members to appoint proxy. • Every notice of general meeting shall be accompanied by a proxy form. • Proxy shall be lodged with the company at least 48hrs before the meeting.

25. Proxies[Section 161] 7. Proxy has the following rights • To speak and vote at the meeting • To demand a poll • To abstain from voting on a question on which poll is demanded.

26. Minutes of Proceedings of General Meetings and Meetings of Directors • Every company shall maintain and accurate summary of all proceedings of meetings of directors, members or committees. • In case of non compliance the company and the officer concerned shall be liable to a fine not exceeding Rs 5000/- and a further fine not exceeding Rs. 1000/- per day till the default continues • Signature of the chairman of meeting or chairman of next succeeding meeting shall be sufficient evidence of the proceedings.

27. Minutes of Proceedings of General Meetings and Meetings of Directors • The books containing the minutes of proceedings of the general meeting shall be open to inspection by members for at least two hours on each day with out charge during the business hours. • Copy of the minutes of the meeting of the board of directors shall be furnished to every director within 14 days of the date of the meeting.

28. Representation at Meetings of Companies • Where a company is a member of another company, it may authorise any of its officials or any other person to act as a representative at any meeting of that company. • Such representative shall be entitled to exercise, on behalf of company, same powers which an individual shareholders of that other company has.

29. Representation at Meeting of Creditors • Where a company is a creditor of another company, it may authorise any of it officials or any other person to act as it representative at • Any meeting of creditors of than other company held under companies ordinance 1984. • Or any other meeting to which the company is entitled to attend in pursuance of any debenture, trust deed or other document. • Such representative shall be entitled to exercise all such powers as the company has as a member of that other company.

30. Representation of Federal Government and Provisional Government • Being the member of the company, the federal govt. or provisional govt. may appoint any person to act as a representative at: • Any meeting of the company; or • Any meeting of any class of members of the company. 2. Such person shall be deemed to be a member of such company. 3. Such person shall be entitled to exercise the same rights and powers, including the right to appoint proxy, which the Federal Government or the Provisional Govt. has as a member of the company.

31. Calling of a Meeting by Commission • If default is made in calling of statutory meeting, AGM or EGM on requisition of member. • The commission has power to call such meeting and commission may give direction that one member present in person or by proxy at meeting shall be deemed to constitute quorum. • The meeting conducted in accordance with the provisions of this section shall be deemed to be a properly conducted meeting of the company • and the expenses of such meeting shall be borne by the company

32. Circumstances in which Proceedings of General Meeting may be declared Invalid • The court may on petition of members having at least 10% voting powers, declare the entire proceeding or a part thereof invalid and direct holding of a fresh general meeting by reason of any material defect or omission in the notice or irregularity in the proceedings of the meeting which prevented members from using effectively their rights. • Such petition shall be made within 30 days of such meeting.