Meaning and Legal Importance of Meetings of Comapny

Meaning and Legal Importance of Meetings

Meaning of meeting

The meetings may be held for different purposes. The meeting is itself such a means by which decision is taken on different matters of the company. Such decisions give support on the transaction, management, etc. of the company.

Generally, a meeting is a place where the people related to the subject matter come together to discuss and decide something. Meeting of a company is the place where shareholders and other related persons associated to discuss and decide about the company.

It is a forum where the company’s advisor, shareholders, and other related well-wishers gather to decide about the subject matter of the company’s agenda, further plan, and strategies. So, the meeting is an assembly of the number of persons for discussing and deciding on the subject matter of common objectives.

Legal Importance of Meeting

• Make the board of directors responsible

Board of directors is elected from the meeting of shareholders. If the Board of directors found irresponsible for the job and they act contrary to the interest of the company, the shareholders have the power to reject him and choose responsible directors. Therefore, the board of directors must always be responsible for the General Assembly or meeting of shareholders for their works.

• Appointment of Auditor

The Board of directors appoints an auditor for the year of incorporation of a company until the first AGM is conducted. Then the auditor is appointed by the general assembly. Therefore, AGM decides what types of auditors they need for the coming fiscal year and decides to appoint.

• Discussion on the Matters of Company’s Status

In the meeting all the shareholder shall have the opportunity to discuss the current status of the company, its financial situation and transaction, and also, but the questions to the directors to the directors about their activities.

• Approval of Financial Report

The AGM generally approves the annual trail balance, Balance sheet, profit and loss account and also approves the dividend to be distributed to a shareholders and staffs.

• Approval of Auditor Report

To pass the annual audit report of the company, the AGM is needed. It means the AGM only can pass the annual audit report of the company. The AGM passes the annual audit report.

• Approval of future plan of actions etc.

To approve future plans and extensions of the company the meetings of the company are essential to get the approval of stakeholders and to inform them regarding the future plans and planned targets of the company.

References

Mishra B.P. (2006), Mercantile Law, Kathmandu: Asia Books Distributers

Upreti Shreepraksh. (2018), Business Law, Kathmandu: Samjhana Publication Pvt Ltd