MANAGEMENT AND ADMINISRATION OF A COMPANY
We all know that managing and directing a company is not an easy task and it requires a lot of work and efforts to make everything happen and manage everything. The company is itself considered a separate legal entity from its owners and for all the functions of the company, the company requires certain set of rules and procedures through which it manages and operates its different tasks. The board of directors of a company takes care of all these things and make everything happen in the company to run everything smoothly.
All the actions that a company takes place throughout its lifespan are written in the memorandum and article of association of a company. Each and every company which is established has defined certain rules and activities that the company could perform in its lifetime, if a company plans to have certain plans for expanding and growth or it have some patents registered under its name are all written in the memorandum of association of the company, the memorandum of association of a company bounds a company and no other actions which are not written in the memorandum of association of the company could be performed by the company in this lifetime. If a company does anything that is outside the boundary of its memorandum then the company is liable to face certain circumstances in the future. The memorandum of association of a company must be in a prescribed form. The memorandum of association of a company contains all the names of its subscribers and required details about them, generally the memorandum of association of a company includes the name of the company, the date of incorporation of the company, the type of company, the products or services that it deals with, the acts under which the company is registered, the names and signatures of all the shareholders and guarantors, the limited liability of the shareholders, that how much a shareholders is liable in case of uncertain situations.
The article of association of a company usually sets out the rules and regulations on which the company would function, the article of association could also put some restrictions on the company’s power, which would be useful in the case if the directors of the company and the shareholders of the company do not agree. The article of association of a company defines the powers of the directors, the responsibilities, the decision making, the appointment of new directors and removal of old directors, the indemnity and the insurance that the company has, the shares, the distributions of the shares, the capitalization of the profits made by the company, the dividends which are to be distributed, the general meetings which the company holds for various purposes, the voting rights of the shareholders, etc.
The section 88 of the companies act 2013 requires a company to maintain the records of each and every member of the company, the records of different class of shareholders, like the equity and preference shareholders separately, the records of the debenture-holders and various other records so as to keep the track of everything that the company is dealing with. The entries done in the registers of the company under the section 88 of the companies act 2013 shall be authenticated by the secretary of the company or any other person authorized by the board of directors.
A company generally takes three different types of meetings throughout the year:
a) The Annual General Meeting(AGM): is an important event which every company is required to hold except for the one person company under section 96 of the companies act 2013, in this meeting members of the company gets an opportunity to discuss the activities of the company, the future plans and decisions of the company.
b) Extra Ordinary General Meeting(EGM): Under section 100 of the companies Act 2013, The board of director of a company whenever it feels necessary could call up the extra ordinary general the notice of the EGM is sent nearly 21 days before of the commencement of the EGM, the notice of these meetings are given to the members whose names are registered in the register of members of the company.
c) Class Meetings: generally these meetings are held for the different classes of shareholders of the company, like the equity and preference shareholders, the debenture-holders, etc.
These meetings general deals with the agendas of the company, the distribution of the dividends, for voting purposes, like voting out for the decisions in agreement and disagreement on the ideas and agendas of the company. A company shall not prohibit any of its members to exercise its voting rights but in the case of notwithstanding anything contained in the section 106 of the companies act 2013, the articles of a company states that no member of the company shall exercise any voting right if the shares registered under the name of the shareholder on which any calls or other sums which are payable presently but have not been paid by him, or in regard to which the company could deny his voting rights in the different meeting which the company holds.
The registers that are required to be kept and maintained by a company under section 88 of the companies act 2013 and the copies of the annual return filed by the company under the section 92 of the companies act 2013 shall be kept at the registered office of the company.
The decisions and the resolutions that are taken in the general meetings are required to be filed under the article of association of the company, and the copy of every resolution or any agreement shall be filed with the registrar within 30 days of the passing of the resolution and all these resolutions must be agreed and accepted by all the board of directors and members of the company before its commencement so that they could not hold the company liable for the same in the future.
Author: Harsh Chaudhary,
LLOYD LAW COLLEGE 1st year