Secretarial Compliance — Board & AGM

Secretarial Standards (SS) are issued by the ICSI and notified by the MCA under Section 118(10) of the Companies Act 2013 — making SS-1 (Board Meetings) and SS-2 (General Meetings) mandatory for all companies except OPCs. SS-1 covers: notice period (minimum 7 days), quorum, agenda, voting procedures, minutes (to be finalised within 30 days). SS-2 covers: AGM/EGM notice (21 days for public companies), proxy rules, postal ballot, and minutes. Non-compliance with Secretarial Standards attracts penalties under Section 118.

Ordinary Resolution (simple majority): appointment of auditors, appointment of directors (except additional directors), dividend declaration, approval of financial statements. Special Resolution (75% in favour): change of name (Section 13), change in objects (Section 13), increase in authorised capital (if Articles require), appointment of MD (if company is not a listed company), buyback of shares (above 10% limit), related party transactions (for public companies above materiality). Consent of all members required: conversion of public to private company.

Section 110 and Rule 22 of Companies (Management and Administration) Rules 2014: specified resolutions must be passed through postal ballot (physical or electronic) rather than at a general meeting — these include: alteration of objects, buyback above 10%, issue of GDRs, sale of whole undertaking, change in registered office outside state, and ESOP schemes. E-voting (electronic voting) is mandatory for listed companies on all shareholder resolutions and optional for unlisted companies via NSDL/CDSL platforms.

Board Resolution: passed at a duly convened Board meeting with proper notice, quorum, and minutes. Circular Resolution (Section 175): for matters that are not required to be decided at a Board meeting — passed by circulating a draft to all directors and obtaining approval from a majority. Not permitted for specific matters: appointment of auditors, quarterly financial results approval (for listed companies), and items involving interested directors. Circular resolutions take effect when the last director signs or the deadline passes (whichever is earlier).

Section 186: a company cannot give loans, guarantees, or investments beyond the higher of: (a) 60% of paid-up share capital + free reserves + securities premium, or (b) 100% of free reserves + securities premium. Beyond these limits: prior approval by special resolution at a general meeting required. Exceptions: loans to wholly-owned subsidiaries, guarantees on behalf of subsidiaries, investments in subsidiaries/associates for which government approval is not required. Prior approval of the Board with all directors' consent for inter-corporate loans — except in the ordinary course of business for lending companies.