VIDHYODAY

enHYA KA UDAY

CHAPTER 9 NOTES

MANAGEMENT AND ADMINISTRATION

[Section 88to 122 and The Companies (Management and

Administration) Rules, 2014]

Annual General meeting -Section 96 G

tooed Pusie
Every company, other than a one person company is required
should be held on ce
hold an annual general meeting every year. AGM
everyyear.

Date of AGM - 96(1)

9 months from the AAmca
.First AGM of the company should be held within the
closing of the first financial year. Hence it shall not be necessary for
of its
company to hold any annual general meeting in the year
incorporation.
of the
. Subsequent AGM of the company should be held earlier
following dates
o Within 6 months from the closing of the financial year. date of one
between the
o not more than fifteen months shall elapse
annual general meeting of a company and that of the next (The gap
months.)
between two AGM should not exceed 15
o Every year
separate and cumulative. Non
The three time, limits given above are
Compliance of any of them would constitute an offence. Therefore, the last
the above three limits.
date for holding AGM shall be the earliest of
an annual general meeting
If it is not possible for a company to hold may extend the time within
within the prescribed time, the Registrar
held.
which any annual general meeting shall be
exceeding 3 months and on
Such extension can be for a period not
showing special reason for delay.
granted by the Registrar for the
" No such extension of time can be
holding of the first annual general meeting.

COVID 19, it is hereby clarified that if

On account of the difficulties due to has
year (other than first inancial year)
oCompanies whose financial hold their AGM for such financial year
oIlded on 31st December. 2019.
closure of the financial year (.e. by
wnin a period of nine months from the viewed as a violation. The
September, 2020), the same shall not bewhich the AGM should have
by
eierences to due date of AGM or the date thereunder shall be construed
made
been held under the Act or the rules
accordingly.
193
 (LODR) Regulations, 2015
SEBI
Additionally, for listed entities as per entities by rmarket capitalization,
provided that for the top 100 listed financial year, shall hold their
determined as on March 31st of every months from the date of
annual general meetings within a period of five
entities shal provide one-
closing of the financial year, Thetop 100 listed
annual general meetings.
way live webcast of the proceedings of thedetermined on the basis of
Explanation: The top 100 entities shallthebeimmediate previous financial
market capitalisation, as at the end of
year.

96(2)
Time, day and place for holdingan annual general meeting-
business hours, that
An annual general meeting can be called during
that is not a National
Is, between 9 a.m. and 6 p.m, on any day
Holiday.
It should be held either at the regístered offíce of the cormpany or at
Some other place withín the city, town or village in whích the registered
office of the company ís situate.
Provided that annual general meeting of
an unlisted company
o may be held at any place in India
o if consent is gíven in writing or by electronic mode
o by all the members in advance.
In case of Government Cormpany AGM can be held either
o at the registered office of the company or
o Such other place within the city, town or village in whích the
registered office of the cormpany ís sítuate or
o such other place as the Central Government may approve in this
behalf.
Provided further that TheCentral Government ís empowered to exempt
any cornpany frorm these provisions, subject to such conditions as it
may irnpose.
In case of Secion 8 cormpany- Provided further that the time; date and
place of each annual general meeting are decided upon before-hand by
the board of directors having regard to the dírections, if any, given in
this regard by the ornpany in its general meeting.
Explanatíon - National Holiday means Republic Day ie. 26th January.
Independence Day ie. 15th August, GandhiJayanti í.e. 2nd October and
such other day as may be declared as National Holiday by the Central
Governrment.

Agenda-Business to he transacted at annual general meeting:

Sub-section (2) of Section 102 provides that all other businesses
transacted at an Annual General Meeting except the following are special
busines8:

194
 VIDHYODAY
VIDHYA KA UDAY

consideration of financial statements and the

the reports of the NOTES
Board of Directors and auditors;
(0)
declaration of any dividend;
the
(i) appointment of directors in place of those retiring;
the
appointment of, and the fixing of the remuneration of, the
the
auditors.

the AGM or Power of Tribunal to call AGM

pefaultin holding
Section 97
provides
that If any default is made in holding the annual
general meeting
of a company,
member of the company may make an application to the
o any
Tribunal
to call or direct the calling of, an annual general meeting of the
company and
aive such ancillary or Consequential directions as the Tribunal thinks
expedient.
company
Guch directions may include a direction that one member of the
a meetin.
present in person or by proxy shall be deemed to constitute

holding a
Section 99 provides that if any default is made in complying or
company
meeting of the company, the company and every officer of the lakh
extend to 1
who is in default shall be punishable with fine which may
which may extend to
and in case of continuing default, with a further fine
continues.
Rs. 5,000/- for each day during which such default

Extra Ordinary General Meeting

general meetings are called
" All general meetings other than annual
extraordinary general meetings. extraordinary general
All businesses items can be transacted at the
meetings are special business.
calling
Following are the key provisions, provided in section 100, regarding
and holding of an extraordinary general meeting:

By Board - Section 100(1) - The Board may, whenever it deems fit, call
an extraordinary general meeting of the company.

company, other than

Provi
of thededwholly
that subsidiarygeneral
an extraordinary
Owned meeting of the
of a company incorporated outside India,
shall be held atta place within India.
call an
By 100(2) -The Board must
Board on requisition - Section
the requisition from the

foextlowrianorg dinary
on receipt of
general meeting
number of members:
195
 members who hold,
having a share capital: than
O in the case of a company not less one-tenth of
the requistion, company as on that
on the date of the receipt of date
capital of the
such of the paid-up share
carries the right of voting: ashare capital: members who
o in the case of a company not having
requisition, not less than one-tenth
have, on the date of receipt of the members having on the said date a
of the total voting power of all the
right to vote
to be considered at the
The reqisition should set out the matters
the requisitionists
proposed meeting and the same should be signed by
and sent to the reqistered ofice of the company.
Ihe Board must, within 21 days from the date of receipt of a valid
requisition, proceed to call a meeting on a day not later than 45 days
from the date of receipt of such requisition.

By requisitionists
" If the Board does not within 21 days from the date of receipt of a
valid
requisition in regard to any matter, proceed to call a meeting for the
consideration of that matter on a day not later than 45 days from the
date of receipt of such requisition, the meeting may be
by the requisitonists themselves. called and held
The meeting should be held within a
of the requisition. period of 3 months from the date
Reasonable expenses incurred by the
requisitionists
meeting shallbe reimbursed by the company to the
in calling such a
company in turn recover
such expenses from any fee requisitionists. The
remuneration
were in
under section 197 payable to such of the
or other
default in calling the meeting. directors who
In case, the
quorum is not
appointed for holding a present within half-an-hour from the time
shallstand cancelled. meeting called by
requisitionists, the meeting
Rules 17 provides as under
general meeting with regard to
by
requisitionists calling of
The members may
:
extraordinary
meeting in
accordance requisition convening(4) ofof an extraordinary
with subsection
such requisition general
o in
writing or
section 100, by providing
o at least through electronic mode
clear twenty-one days prior to the
The extraordinary general meeting. proposed date of sucn
shall notice shall specity the
contain the business toplace, be date, dayatand hour of the
should convenetransacted
The the meeting. meeting ana
samerequi
city sortionitown
sts meeting at
should be convenedwhere on Registered office is Registeredand office or in the
If the any day
except situated such
resolution
be given is be
as requiredto by national holiday. meeting
proposed as(2)a special
sub-section of sectionresolution.
114 the notice shal
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yID HY& KA UDAY

E The notice shall be signed by

o all the requistionists or
reguistionists duly authorised in writing by all other requistionists
NOTES

on their behalf or
sending an electronic request attaching therewith a scanned copy
of such duly signed requisition.
No explanatory statement as required under section 102 need be
o annexed to the notice of such meeting, however the requistionists may
disclose the reasons for the resolution(s) which they propose to move at
the meeting.
The notice of the meeting shall be given to those members whose names
appearin the Register of members of the company within three days
on which the requistionists deposit with the Company a valid
reguisition for calling an extraordinary general meeting.
Where the meeting is not convened, the requistionists shall have a right
o receive list of members together with their registered address and
pumber of shares held and the company concerned is bound to give a
list of members together with their registered address made as on twenty
first day from the date of receipt of valid requisition together with
such changes, if any, before the expiry of the forty five days from the
date of receipt of a valid requisition.
The notice of the meeting shall be given
o by speed post or registered post or
o through electronic mode
such
" Any accidental omission to give notice to, or the non-receipt ofof the
the proceedings
notice by, any member shall not invalidate
meeting.

By Tribunal -Section 98
a company or to
IT for any reason it is impracticable to call a meeting of
hold or conduct the meeting of the company,
application of any director
ne Tribunal may., either suomotu or on the
entitled to vote at the meeting:
Or member of the company who would be
called, held and conducted in
uer ameeting of the company to be
SUch manner as the Tribunal thinks fit; and
directions as the Tribunal thinks
3ve SUch ancillary or consequential supplementing in relation to
edlent, including directions modifying or meeting, the operation of the
the holding and conducting of the
calling,
provisions of this Act or articles of the company.
one member of the
Such include a direction that
directions may
proxy shall be deemed to constitute a
present in person or by
Company
meeting. Meeting held pursuant to such order shall be
held and conducted.
deemed to be a

meeting of the company duly called,

"197
 requisition for holding of
submitted a managing
40 out of 100 members of a
company remove
order to
meetingin company
director
the meeting, the
general to call
an extraordinary of the registered office, as it
from office. On the failure the meeting at the
director
requisitionists themselves called by the managingresolution himself. The
key
was kept under lock and elsewhere and adopted removingthe
members held the meeting valid?
office. Is theresolution
managing director from 1956 contains provisions regarding
Act,
Section 100 of the companies meetings. It provides that if directors fail
holding of extra ordinary generalmeeting, the requisitionists or such of the
to call a properly requisitioned than 1/1Oth of the paid up share capital
requisitionists as represent not less to be held on a
day not later
than 3
of the company may call a meeting
requisition.
months of the date of the deposit of
called by the requistionists and the registered office is
VWhere a meeting is was decided in R.Chettiar v
M.Chettiar
not made available to them. it
that the meeting may be held
(1951) com. cases 93 AIR 1951 Mad 542
at such a meeting are
anywhere else. Further resolutions properly passed
binding on the company.
Thus in the given case since all the above mentioned provisions are duly
complied with, resolution removing the managing director shall be valid.

Class Meetings
Meetings of members of a company fall into two broad divisions, namely,
general meetings and class meetings. Class meetings are meeting of
shareholders, holding a particular class of share which is held to pass
resolution which will bind only the members of the class concerned. Only
members of the class concerned may attend and vote at meeting. Usually
the rules to voting apply to class meetings as they govern voting at general
meetings. These class meetings must be convened whenever it is
necessary to alter or change the rights or privileges of that class as
provided by the articles. For effecting such changes, it is
these are approved at a separate meeting of the holders ofnecessary that
and supported by a special resolution. Under those shares
Act, 2013 (variation of shareholders' section 48 of the Companies
rights) class meeting of the holders of
different classes of shares shall be
shares are to be varied. Similarly,heldunder if the rights attaching to
these
Section
Amalgamation a scheme of 232(Merger
of and
proposed, meeting companies), where
of several classes of arrangement IS
required to be held, Details of meetings of shareholders and creditors are
required to be mentioned in
Annual Return members or class meetings are
as per Section 92(1)().

In case of private Important point

otherwise specifiedcompany
- Section
in
respective 101-107 and 109 shall apply. unless
provide otherwise. sections or the articles of the Company
In case of Specified
shall apply in case ofIFSC Public
a
Specified Company -
Section and 109
IFSC
company, 101-107
specified in the articles of
the public unless otherwise
company.
198
 VIDHYODAY
Convening/requisite of a valid 10HYA KA UDAY
business at a meeting is said to general meeting
The have been "validly
membersoff the organisation or body
are bound by the decision concerned,
whether transacted"
or not they
if the NOTES

Dresent, made there at. They were

unlessthe meeting is validly held.
The cannot be so
bound
thatthe meeting should be:
essentials of a valid meeting
are
(a) Properly convened:
meeting must be called by proper authority; and
)The
be served in the manner specified under
(i)Proper notice must Section
the Act
101 and 102 of
(b) Properly constituted:
() Proper quorum must be present in the general meeting (Section 103 of
theAct)
chairman must preside the meeting (Section 104 of the Act)
()Proper
(c) Properly conducted:
The business must be validly transacted at the meeting i.e. resolutions
must be properly moved and passed, and voting by show of hands and
on poll.
() Proper minutes of the meeting must be prepared. (Section 118 of the
Act)

Notice of Meeting- Section 101

Length of notice - 101(1)
may be called
" Ageneral meetingof a company
clear days' notice either
o by giving not less than 21
electronic mode.
o in writing or through shall be given in such manner
as may
Notice through electronic mode
be prescribed. after giving
Provided that a general meeting may be called writing or
Onort notice- this sub-section if
consent, in
that specified in
Ler notice than
Dy electronic mode. is accorded thereto
general meeting, by not less than ninty-tive per
19n ne case of an annual
the members entitled to vote thereat; and members of the
volL oT meeting, by
(ü) in the Case of any other general
of
company capital, majorityin number
a share ninety-
(a) holding, if the company has represent not less than
Vote and who paid-up share capital
of the
members entitled to the
five per cent. of such part of the meeting; or
vote at than ninty-five
as gives a right to less
company has no share
capital, not
atthat meeting:
(b)
having, if the Company
power
exercisable
per cent. of the total voting

199
 vote
company is entitled to
Provided further that where any member of amnoved ata meeting and not
only on some resolution or resolutions to be account forthe
purpOses
on the others, those members shall be taken into and not
of this sub section in resolution or resolutions
respect of the former
in respect of the latter.

2018 to hold its AGIM o 240

ABO Ltd. issueda notice on 1st Sentember. referring to tne
September, 2018. Check the validity of the notice
provisions of the rele vant act, in case it is sent by p0St.

Date of holding AGM: 24th September, 2018

Date of dispatch of notice: 1st September, 2018
Days to be excluded: (a) Dayof holding AGM i.e 24th September, 2018
(b) Day of dispatch of notice i.e. 1st September, 2018
(C) 2days for service of notice i.e 2nd& 3rd Sept, 2018

Number of days notice given: 20 days

Number of days notice required under section 101 of the Act is 21 days.
Therefore it is not a case of valid notice. However, shortfall of 1 day can be
condoned if consent is given for such shorter notice by at least 95% of the
members entitled to vote at such AGM.

Secretarial Standard on calling of General Meeting on shorter notice:

Para 1.2.7 of SS-2 provides that notice and
be given at a shorter period of time if consentaccompanying documents may
in writing is
physical or electronic means, by not less than ninety-fivegiven thereto, by
Members entitled to vote at such Meeting. percent of the
The reguest for consenting to shorter notice and
shall be sent together with the Notice and the accompanying documents
the consent is received prior to the Meeting shall be held only if
than ninety five per cent of the date fixed for the Meeting from not less
Members entitled to vote at such Meetin.
Contents of
Notice- 101(2) Every
place, date, day and the hour notice of a meeting shall
statement of the business to be
of the
meeting and shallspecify
transacted (Agenda) at
the
contain a
Place of meeting (Section such meeting
96)-|he
the general meeting is scheduled notice should state the place
to be where
meeting, the place of the meeting has toheld.
be
In case of an
annual general
the Company or some other place within the either the registered
the registered office of the company is city, toWn or village inoffice of
situated. to Rule which
Administration)Explanation
of Companies (Management and
requisitionists should convene meeting at Rules 2014 states17(2)
city or town where the Registered Office Registered
is Office or in the that
should be convened on working day. situated and such same
meeting
200
Annual general meeting of an
Indiaif consent is
in given inunlisted company may be held at
VIDHYODAY
members in advance. writing or by UDAY

electronic mode byany allplace

the
The Central Government may NOTES
this sub-section subject tosuchexempt any
In case
of Government conditions ascompany
it may from the provisions
impose. of
the company or
Company,
such other AGM may be held at
place
the registered office of the Companywithin the city, town registered
or village inoffice of
is
central government may approve in this situated or such other place aswhich
Para 1.2.4 of SS-2 provides Annual
behalf. the
the registered office of the General Meetings shall be held
company
city, town or village in which the
or at some
other place withineither
hated whereas other General registered office of the the
India. company is
Meetings may be held at any place within
atice shall contain
including route map andcomplete particulars of the venue of the Meeting
prominent landmark for easy location. (SS 1.2.4)
Day of meeting (Section 96) - The day and date of the
of an annual generalmeeting should be
clearly stated in the notice. In case
should be one that is not a meeting, the day
meeting can however be held National Holiday. An extraordinary
on any day. However, as per general
SS-2 a Meeting called by the Para 1.2.4 of
working day. requisitionists shall be convened only on a

Time of meeting [(Section

De given in the notice. An 96(2)]-Exact time of holding the
annual general meeting can bemeeting should
DUsIness hours only, i.e. between 9:00 a.m. and 6:00 called during
p.m. There is no
Iestriction of timings in case of an extraordinary general
meeting.
case of Section 8
uded upon before-hand Company, the time, date and place of each AGM are
by the directors having regard to directions, if
any, givenin this
regard by the company in its general meeting.

Agenda (Section 102)-A statement of the business to be transacted at the

general meeting should be given in the notice. In case, the meeting is to
transact aspecial business, an explanatory statement should be attached
about such item.

PrEvery
oxy clause with reasonable prominence [Section 105(2)]
notice calling a meeting of acompany which has ashare capital, or
the
Carryarticles of which provide for voting by proxy at the meeting,entitled
should
with reasonable prominence, a statement that a member
to
atortend and vote is entitled to appoint a proxy, or, where that is allowed,proxy
one

needmore proxies, to attend and vote instead of himself,

and that a
not be a member.

201
 Mode- Rule 18
Notice through Electronic
A Company may give notice through electronic mode.
by a company
Electronic mode' means anv communication sent programme which is
nrough its authorized and secured computer record of such
Capable of producing confirmation and keeping such
Communication addressed to the person entitled to receive
Communication at the last electronic mail address provided by the
member.

Conditions for notice send through e-mail are as under:

A company may give notice through electronic mode.
Explanation: For the purpose of this rule, the expression "electronic
mode" shall mean any communication sent by a company through its
authorized and secured computer programme which is capable of
producing confirmation and keeping record of such communication
addressed to the person entitled to receive such communication at the
last electronic mail address provided by the member.
Anotice may be sent through e-mail as a text or as an attachment to e
mail or as a notification providing electronic link or Uniform Resource
Locator for accessing such notice.
The e-mail shall be addressed to the person entitled to receive such e
mail as per the records of the company or as provided by the
depository:
Provided that the company shall provide an advance opportunity at
least on ce in a financial year, to the member to register his e-mail
address and changes therein and such request may be made by only
those members who have not got their email id recorded or to update a
fresh email id and not from the members whose e-mail ids are already
registered.
The subiect line in e-mail shall state the name of the company,
notice
of the type of meeting, place and the date on which the
scheduled.
meeting is
If notice is sent in the form of a
non-editable attachment to
attachmnent shall be in the Portable Document Format ore-mail, such
in a non
editable format together with a link or instructions' for recipient for
downloading relevant version of the software.
When notice or notifications of availability of notice are
the company should ensure that it uses a sent by e-mail.
system which produces
confirmation of the total number of
each recipient to whom the notice recipients e-mailed and a record of
has been sent and copy of Such
record and any notices of any taled
tranSmissions and subsequent re
sending shall be retained by or on behalf of the Company as "proof of
sending".

202
 VIDHYODAY
company's obligation shall be
company shall not be satisfied when it
The vIDMYA KA UDAY

and the
responsibletransmits
transmission beyond its control: held the e-mail
for a failure in NOTES
member entitled to receive
Ifa notice fails to provide or
e-mailaddress to the company or to update relevant
the company shall not thebe in
depository
default forparticipant
be. as the
case may
notice via e-mail. not delivering
The company may send e-mail through in-house
e
andtransfer agent
or authorise any faclity or its registrar
third party agency
mailfacility. providing bulk e-

The notice made available on the electronic link or Uniform

Resource
Locator has to be readable, and the recipient should be able to
obtain
and retain copies and the company shall give the complete Uniform
Resource Locator or address of the website and full details of how to
access the document or information.
The notice of the general meeting of the company shall be
simultaneously placed on the website of the company if any and on the
website as may be notified by the Central Government.

Persons entitled to receive Notice -Section 101(3)& (4)

. Notice of every meeting of the company must be given to:
(a) every member of the company, legal representative of any
deceased member or the assignee of an insolvent member;
(b) the auditor or auditors of the company; and
(c) every director of the company.
to, or the non-receipt of such
Any accidental omission to give notice
person who is entitled to such notice for
TioUce by, any member or other
proceedings of the meeting.
any meeting shallnot invalidate the
nowever, omission to serve notice of meeting on a member on the
be said to be an
ground that he is not a shareholder cannot
iiaken
accidental omission [Musselwhite Ltd.(1962) 32 Comp. Cas 804):
V C.H. Musselwhite & Sons omission must be not only
means that the Exports
ouidental omission'
deliberate[Maharaja Export Vs. Apparels
designed but also not 353.].
Promotion Council(1986) 60 Comp. Cas

other specified persons:SS

Notice to Directors, Auditors & be
every meeting shall to
in writing of given
Para 1.2.1 of SS-2 provides that
notice shall also be
Such Notice Secretarial Auditor, to
glven to every member of the company.
company, to the required, to
he or so

DeotherbDienspeeci
truercteorfsiTrustees,
and Auditors of the applicable
wherever
If any, and,
ed persons.

203
Gourt may direct issuance of Notice to some other persons such as Court
appointed Chairman or observers or persons whose entitlement is under
enallenge. Considering that Preference Shareholders are Members of the
COmpany, Notice of general meetings should also be given to them.
In the case of Members. Notice shall be given at the address registered
With the Company or depositorv. In the case of shares or other securities
neld jointly by two or more persons, the Notice shall be given to the person
whose name appears first as per records of the Company or the
depository, as the case may be. In the case of any other person who is
entitled to receive Notice, the same shall be given to such person at the
address provided by him.
Notice shall be given to:
(a) Every member of the Company
(b) Legal representative of any deceased
member
(c) Assignee of an insolvent member
(d)The auditor or auditors of the
company
(e) Every director of the
company
() Secretarial Auditor of the
Company
(g) Debenture trustee
(h) To other specified
persons

Secretarial Standard on entitlement to receive

Para 1.2.1 of SS-2 provides that notice:
intimation of death of a Member, the where the company has received
Notice of Meeting shall be sent as
under:
(a) where securities are held
singly, to the Nominee of the single holder;
(b) where securities are held
by more
joint holder dies, to the surviving first than one person jointly and any
joint holder;
(c) where securities are held
by more than one person
joint holders die, to the
Nominee appointed by all the jointly and all the
joint holders:
(i) In the absence of a
Nominee
notice shall be sent to the legal
of member or joint
members, the
Member or joint members. representative of the deceased
(iü) In case of
insolvency of aMember, the Notice shall be sent to the
assignee of the insolvent Member.
(i) In case the
Member is a company or body
being wound up, Notice shall be sent to the corporate which is
liquidator.

204
 VIDHYODAY
Statement to be Annexed to Notice - 102
Incase of
special business items to be
transacted at a NOTES
statement setting out the following
material facts, shall general
be
meeting,
annexed to the
a
notice calling the meeting:
the nature of concern or interest, financial or
respect of each item of: otherwise, if any,
every director and the manager, if any;
every other key managerial personnel; and
relatives of the persons mentioned in
any other information and facts that sub-clauses (i) and (ü):
may enable members to
understand the meaning, Scope and implications of the items of
business and to take decision thereon.
Where any item of special business to be transacted at a meeting of
the company relates to or affects any other company, the extent of
shareholding interest in that other company of every promoter,
director, manager, it any, and of every other key managerial
personnel of the first mentioned company shall, if the extent of such
shareholding is not less than 2% of the paid-up share capital of that
company, also be set out in the statement.
. Where any item of business refers to any document, which is to be
considered at the meeting, the time and place where such document
can be inspected.
Where as a result of the non-disclosure or insufficient disclosure in any
statement referred as above, being made by a promoter, director,
manager, if any, or other key managerial personnel, any benefit which
accrues to such promoter, director, manager or other key managerial
personnel or their relatives, either directly or indirectly, the promoter,
director, manager or other key managerial personnel, as the case may
be, shall hold such benefit in trust for the company, and shall, without
prejudice to any other action being taken against him under this Act or
under any other law for the time being in force, be liable to compensate
the company to the extent of the benefit received by him.

Business to be transacted at General meeting - 102(2)

transacted
n ne case of an annual general meeting, all business to be
thereat shall be deemed special, other than
) the consideration of financial statements and the
reports of the
Board of Directors and auditors;
() the declaration of any dividend;
those retiring;
() the appointment of directors in place of
fixing of the remuneration of, the
() the appointment of, and the
auditors; and
deemed to be
in the case of any other meeting, all business shall be
special:

205
 transacted at a
to be extent
item of special business company, the
Provided that where any any other promoter,
director,
meeting of the company relates to or affects of every the first
of shareholding interest in that other company personnel of less
managerial is not
manager, if any, and of every other key shareholding
extent of such also be set
mentioned company shall, if the that company,
capital of
than two per cent of the paid-up share
of
out in the statement.
clearly specifythe nature
shall of items
Para 1.2.5 of SS-2 requires that notice transacted thereat. In respect Resolution
the Meeting and the business to be be in theform
of a
of Special Business, each such item shall
statement which shall set out
and shall be accompanied by an explanatory understand the meaning,
to
all such facts as would enable a Member
and to take a
Scope and implications of the item of business
respect of items of ordinary business, resolutions
deosion thereon. In the Notice except where the
auditors
are not required to be stated in
other than the retiring auditorS or
or directors to be appointed are
directors, as the case may be.
(4), if any default
102(5) -Without prejudice to the provisions of sub-section
promoter,
IS made in complying with the provisions of this section, every
director, manager or other key managerial personnel of the company who
is in default shallbe liable to apenalty of fifty thousand rupees or five times
the amount of benefit accruing to the promoter, director, manager or other
key managerial personnel or any of his relatives, whiche ver is higher.

Quorum for Meetings-103

Quorum refers to the minimum number of members required to
constitute a valid meeting.
Following are the minimum numbers provided in section 103. for
various categories of companies. However the Articles of Association of
the company may provide for a higher number.
Public company:
o 5 members personally present if
the number of members as on the
date of meeting is not more than 1000;
o 15 members personally
present if the
date of meeting is more than 1000 but number
of members as on the
up to 5000:
o 30 members
personally present if the
date of the meeting exceeds 5000. number of members as on the
Private company -- 2 members
for a meeting of the company. personally present, shall be the quorum
Para 3.1 of SS-2 provides that
Articles is higher than that providedwhere the quorum provided
in the
conform to such higher requirement. under the Act, the quorumn shall
present at a meeting to constitute Members need to be
excluded for determining the quorum. the quorum. Proxies personaly
shall be

206
 of VIDHYODAY
Para3.2 SS-2 provides that a duly yDHvA KA DAY

of authorized
corporate or the
body
Governor of a State is representative
deemed to be a
representative
the President of India or
of a
the NOTES
| the rights of a Member
enjoysall
Member personaly present and
present in person.
person can be an
corporate. In such authorized representative
One of
body
a case, he
is treated as more than one
more than one
member present in person for the purpose of
constitute a meeting, at least twO
individuals shall quorum. However, to
be present in
person.
off a public
Thus, in case company having not more than 1000 members
with1a quorum
requirement of five members, an
offive bodies corporate cannot form a quorum byauthorized representative
himself but can do so if
at leeast one more member is personally present.
Members who have voted by remote e-voting have the right to attend
the General Meeting and accordingly their presence shall be, counted
for the purpose of quorum.
Amember who is not entitled tovote on any particular item of business being
arelated party, if present, shallbe counted for the purpose of quorum.
The stipulation regarding the presence of a quorum does not apply with
respect to items of business transacted through postal ballot.

within half-an-hour
Absence of quorum - If the quorum is not present
company:
from the time appointed for holding a meeting of the
adjourned to the same day in the next
o the meeting shall stand and such
place, or to such other date
Week at the same time and or
maydetermine;
other time and place as the Board shall stand cancelled.
called by requisitionists,
O the meeting, if
adjourned meeting or of a change of day,
AJOurned meeting- In case of an than 3 days notice
company shall give not less advertisementin the
ime or place of meeting, the publishing an
to the members either individually or by vernacular language) which is in
one in
(one in English andregistered is stuated.
newspapers
circulation at the place where the
office ofthe company
present within half-
If at quorum is not members
the adjourned meeting also, a for holding meeting, the
an-hour from the time appointed
Present shall be the quorum. of
more,
thirty days or the
period
"If a sine-die orfor a givenin accordance with
Meeting
a Notice of
is adjourned
the adjourned
Meeting shall be Notice.
relatingto
contained hereinabove thirty days, the
provisions for
of less than
a period Notice specifying the day,
fa Meeting is adjourned
than three
days'
Members either
individually

company
date.
0r by time
shall give not less
ofthe
and venue advertisement in
the
Meeting,to vernacular newspaper
a which the
in the
registered
district inEnglish newspaperin
publishing
an
of the
proffiinccie palvernacular language
of the company is a wide
situated, and
in an that district.
circulation in

English language, both having

 stands adjourned for
Meeting,
requisitioned on the same day.
shallbe held
than a Meeting on
such other day, not
If a Meeting. other adjourned and place or and place as may be
want ofQuorum, the same time time
in the next week at
the
at such other
Holiday, or
being a National proxies. However, the
determined by the Board. present exclude Section 113 or the
personaly appointed underState under
The words, corporate Governor of a Section
representative of a body
President or a of counting a quorum
representative of the present' for purpose
personally .1920 W.N. 274].
112 is a member EstateLtd. members of a
[Re. Kelantan Coconut bodies whoare company
corporate the bodies corporate will
In case two or more individual, each of
single individual representing it. If, for
are represented by present bythe presence will be
be treated as personally three corporate bodies, his purposes of
instance, he represents in person Tor
members being present
COunted as three
quorum. count 2
Scottish case that one individual may
It has been held in
a more than one
member if he attends the meeting in
more than one as a
a member holding shares in his own right and
capacity, e.g. as in respectof a trust holding (Neil
member entitled to vote in person
SC 16).
McLeod &Sons Ltd., Petitioners, 1976
3.1 of SS-2 requires that quorum shall be present not only at the time
Para
while transacting business.
of commencement of the Meeting but also

Resolution passed at adjourned meetings - As per Section 116 where a

resolution is passed at an adjourned meeting of a company; or the holders
of any class of shares in a company; or the Board of Directors, the
resolution shall be treated as passed on the day it was actually passed and
not on any earlier date.

Secretarial Standardon adjournment of meetings (Para-15 of SS-2):

" A duly convened Meeting shall not be adjourned unless circumstances
SO warrant.

The Chairman may adjourn a Meeting with the

consent of the
Members, at which a Quorum is present, and shalladjourn
so directed by the Members. a Meeting if

Meetings shall stand adjourned for want of requisite

The Chairman may also adjourn a
Quorum.
other like causes, when it becomes Meeting in the event of disorder of
and complete its business. impossible to conduct the Meeting
. At an
adjourned Meeting, only the unfinished
meeting shall be
considered.
Any business of the orignal
Meeting would be deemed to
have Resolution
been
passed at an adjourned
adjourned Meeting and nott on any passed on the date of the
earlier date.