What is a Statutory Meeting?
It is the first meeting of the shareholders of a public company having share capital and is held once in the lifetime of a company. A private limited company and a company limited by guarantee not having share capital need not hold a statutory meeting.
Statutory meeting must be held within a period of not less than one month and not more than six months after the date on which it is authorized to commence its business.
Objects of statutory meeting
Statutory Meeting is convened in order to accord the shareholders an opportunity for seeing what degree of success has attained the flotation of the company and in order that any special matters requiring their approval may be laid before them.
The statutory meeting is held to inform the shareholders matters relating to incorporation, allotment of shares, contracts entered into by the company, utilization of funds etc.,
Notice of the Meeting
The Directors have to send a notice of the meeting to all members of the company at least 21 days before the date of the statutory meeting.
The directors are required to prepare and send a report, called the ‘Statutory Report’ to every member of the company at least 21 days before the date of the meeting.
Contents of a Statutory Report
The statutory report contains information relating to:
1. Shares allotted: The total number of shares allotted distinguishing those allotted as fully paid up, partly paid up, shares issued for consideration other than cash etc.
2. Cash received: The total amount of cash received by the company in respect of all the shares allotted.
3. Abstract: An abstract of the receipts of the company and of the payments made, upto a date within seven days of the day of the report. The receipts should clearly state the amount received in respect of shares, debentures. The payments made for various purposes should be clearly stated.
4. Directors, auditors and other managerial personnel: The names, occupations and address of all the directors, auditors, manager and secretary of the company. Changes if any that have occurred should also be mentioned.
5. Contracts: The particulars of any contracts, modification of contracts or proposed modification of contracts.
6. Underwriting contract: The extent to which each underwriting contract has not been carried out along with the reasons.
7. Arrears of calls: The arrears on calls from directors and manger.
8. Commission and brokerage: The particulars of commission and brokerage paid or to be paid to any director or manager in connection with the issue of shares or debentures.
Certification of Statutory Report
According to Section 165(4), the statutory report must be certified as correct by not less than two directors; one of whom shall be the managing director, if any. The auditors of the company would then certify it as correct regarding the shares allotted, cash received in respect of such shares and the receipts and payments of the company.
Filing of Statutory Report
As per provisions of Section 165(5), a certified copy of the statutory report shall be filed with the registrar for registration immediately after it has been sent to the members of the company.