Statutory Meeting of a Company

Statutory Meeting  is the first meeting of the shareholders of a public company. It must be held within a period  of not less than one month nor more than 6 months from the date at which the company is entitled to  commence business. It is held only once in the lifetime of a company. A private company and a  company limited by guarantee and not having a share capital need not hold such a meeting.

The purpose of the statutory meeting with its statutory report is to put the shareholders of the company in  possession of all the important facts relating to the new company, what shares have been taken up, what  moneys received etc. This also provides an opportunity to the shareholders of meeting to discuss the  whole situation, the management and prospects of the company.

The Board of Directors must, atleast 21 days before the day on which the meeting is to be held,  forward a report, called the ‘statutory report’ to every member of the company. This report contains all  the necessary information relating to formational aspects of the company for the information of the  shareholders.

Contents of Statutory Report

1. The total number of shares allotted, distinguishing those allotted as fully or partly paid up otherwise  than in cash, the extent to which they are partly paid up, the consideration for which they have been  allotted and total amount received in cash;
2. An abstract of the receipts and payments under distinctive heads upto a date within seven days of  the date of report;
3. An account of estimate of the preliminary expenses of the company.
4. The names, addresses and occupations of the managing director, director, and also its secretary and  auditors of the company;
5. The particulars of any contract which, and the modification or proposed modification of which, are  to be submitted to the meeting for approval;
6. The extent to which underwriting contracts, if any, have not been carried out and the reason  therefor;
7. The arrears, if any, due on calls from directors, managing director or manager; and
8. The particulars of any commission or brokerage paid, or to be paid, in connection with the issue or  sale of shares to any director, managing director or manager.

Certification and Filing of Statutory Report

The Statutory Report must be carried as correct by not less than two directors of the company  including the managing director, if there is one. After the statutory report has been certified by the  directors, the auditors of the company must also certify the report in respect of the number of shares  allotted, cash received on such shares and the receipts and payments of the company upto a date within  seven days of the report. After the statutory report has been sent to the members along with the notice, a  certified copy of the report must be filed with the Registrar of Companies for registration forthwith.

Consequences of Default

If a company makes default in holding the statutory meeting within the prescribed period or in  issuing and filing the statutory report according to the provisions of Sec.165 of the Act, every director or  other officer of the company in default will be liable to pay fine which may extend to Rs.500. Moreover, a  company may be wound up by the Court, if default is made in delivering the statutory report to the  Registrar or in holding the statutory meeting.