Chapter 14 Meetings of

Shareholders
Page 110
AGM
EGM
(1) When to call an AGM: Every company other than a One Person Company shall in
each year hold in addition to any other meetings, a general meeting as its annual
general meeting and shall specify the meeting as such in the notices calling it, and
not more than fifteen months shall elapse between the date of one annual general
meeting of a company and that of the next:
• Provided that in case of the first annual general meeting, it shall be held within a
period of nine months from the date of closing of the first financial year of the
company and in any other case, within a period of six months, from the date of
closing of the financial year, and if a company holds its first annual general
meeting as aforesaid, it shall not be necessary for the company to hold any annual
general meeting in the year of its incorporation
 Practical Questions
• A company closes its financial year on
31st July each year. Last year it had its AGM on
30 th November 2020. Calculate the latest date
by which the company should have its AGM for
the current year i.e. 2021
• Extension of time by the Registrar: The Registrar may, for any special reason,
extend the time within which any annual general meeting, other than the first
annual general meeting, shall be held, by a period not exceeding three months.
(1) Time, day and place of AGM: Every annual general meeting shall be called
during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a
National Holiday and shall be held either at the registered office of the company or
at some other place within the city, town or village in which the registered office of
the company is situated. The Central Government may exempt any company from
provisions of time; day and place of AGM subject to such conditions as it may
impose. However, in case of unlisted company, AGM may be called at any place in
India if consent has been obtained in writing or by electronic mode from all the
members in advance.
• Explanation. — “National Holiday” means and includes a day declared as National
Holiday by the Central Government
• Power of Tribunal to call AGM (Section 97): If any default is made in holding the
annual general meeting of a company under section 96, the Tribunal may, notwithstanding
anything contained in this Act or the articles of the company, on the application of any
member of the company, call, or direct the calling of, an annual general meeting of the
company and give such ancillary or consequential directions as the Tribunal thinks
expedient. Provided that such directions may include a direction that one member of the
company present in person or by proxy shall be deemed to constitute a meeting.
(1) Ordinary & Special Business to transact at AGM [Section 102(2)]:
(a) In the case of an annual general meeting, all business to be transacted 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;
 the appointment of directors in place of those retiring;
 the appointment of, and the fixing of the remuneration of the auditors; and
In the case of any other meeting, all business shall be deemed to be special.
 Practical Question
Appointment of a director who was appointed
by the board as an additional director as a
regular director
Approval of buy back of shares
Declaration of dividend
 EGM
•Extra-ordinary general meeting is a meeting of members/shareholders to transact
some special and urgent business which cannot be delayed upto next Annual General
Meeting. All the general meetings between two annual general meetings are called as
Extra-ordinary General Meeting. Section 100 governs the provision of Extra-Ordinary
General Meeting
• 
•Power of Board to call EGM: The Board may, whenever it deems fit, call an
extraordinary general meeting of the company. The EGM shall be held at any place
within India except in case of the wholly owned subsidiary of a foreign company. Thus
wholly owned subsidiary of a foreign company may heal its EGM outside India.
•Calling of EGM by requisition: The Board shall, at the requisition made by,—
(a) in the case of a company having a share capital, such number of members who
hold, on the date of the receipt of the requisition, not less than one-tenth of such of
the paid-up share capital of the company as on that date carries the right of voting;
(b) in the case of a company not having a share capital, such number of members who
have, on the date of receipt of the requisition, not less than one-tenth of the total
voting power of all the members having on the said date a right to vote, call an
extraordinary general meeting of the company within the period twenty one days.
•The requisition made by the members shall set out the matters for the consideration of
which the meeting is to be called and shall be signed by the requisitionists and sent to
the registered office of the company.
•If the Board does not, within twenty-one 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 forty-five days from the date of receipt of such
requisition, the meeting may be called and held by the requisitionists themselves within
a period of three months from the date of the requisition. In addition, in such a case
meeting called by the requisitionists shall be called and held in the same manner in
which the meeting is called and held by the Board. Any reasonable expenses incurred
by the requisitionists in calling a meeting shall be reimbursed to the requisitionists by
the company and the sums so paid shall be deducted from any fee or other
remuneration under section 197 payable to such of the directors who were in default in
calling the meeting.
 Practical question
• Member of a company made a requisition for
an EGM on 1st January 2021.
• Notice period: A general meeting of a company may be called by giving not less
than clear twenty-one days’ notice either in writing or through electronic mode in
such manner as may be prescribed under rule 18 of the Companies (Management
and Administration) Rules, 2014. 21 clear days means 21 days + 2 days if the
notice is send by post and the date on AGM and the date of sending of notice is
excluded thus 21 clear days means 21+2+2=25 days.
• Contents of Notice: Every notice of a meeting shall specify the place, date, day and
the hour of the meeting and shall contain a statement of the business to be transacted
at such meeting. Section 102 requires that a statement setting out the following
material facts concerning each item of special business to be transacted at a general
meeting, shall be annexed to the notice calling such meeting, namely:—
• (a) the nature of concern or interest, financial or otherwise, if any, in respect of each
items of—
•(i) every director and the manager, if any;
•(ii) every other key managerial personnel; and
•(iii) relatives of the persons mentioned in sub-clauses (i) and (ii);
• (b) (explanatory statement) any other information and facts that may enable
members to understand the meaning, scope and implications of the items of business
and to take decision thereon.
• Who are entitled to receive notice: The notice of every meeting of the company
shall 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.
• However, any accidental omission to give notice to, or the non-receipt of such
notice by, any member or other person who is entitled to such notice for any
meeting shall not invalidate the proceedings of the meeting. In Maharaja Exports v.
Apparels Exports Promotion Council [1986] 60 Comp. Cas. 353 (Delhi), the words
‘accidental omission’ means that the omission must be not only not designed but
also not deliberate. This expression implies absence of intention or deliberate
design.
• When a company can convene general meeting on shorter period notice: A
general meeting may be called after giving a shorter notice if consent is given in
writing or by electronic mode by not less than ninety-five per cent of the members
entitled to vote at such meeting.
• 
 Practical question
• A meeting of a company is to be held on 30th
September 2021. by which date notice of the
meeting is to be dispatched.
• Quorum: Unless the articles of the company provide for a larger number,—
• (a) in case of a public company,—
• (i) five members personally present if the number of members as on the date of
meeting is not more than one thousand;
• (ii) fifteen members personally present if the number of members as on the date
of meeting is more than one thousand but up to five thousand;
• (iii) thirty members personally present if the number of members as on the date
of the meeting exceeds five thousand;
(b) in the case of a private company, two members personally present, shall be the
quorum for a meeting of the company.
 Practical question
• ABC LTd and XYZ Ltd appoited as Mr. Shyam as
its proxy to attend the meeting on the behalf
of the company. In the meeting of a company
in which ABC LTd and XYZ Ltd are member. If
only shyam was present who representing five
companies.
• Meeting to be adjourned for the want of quorum: If the quorum is not present within
half-an-hour from the time appointed for holding a meeting of the company—
• (a) the meeting shall stand adjourned to the same day in the next week at the same time
and place, or to such other date and such other time and place as the Board may determine;
or
• (b) the meeting, if called by requisitionists under section 100, shall stand cancelled:
• B.3 Notice for adjourned meeting: In case of an adjourned meeting or of a change of day,
time or place of meeting as per clause (a) of B.2 above, the company shall give not less
than three days notice to the members either individually or by publishing an
advertisement in the newspapers (one in English and one in vernacular language) which is
in circulation at the place where the registered office of the company is situated.
• B.4 Quorum for adjourned meeting for want of quorum: If at the adjourned meeting
also, a quorum is not present within half-an-hour from the time appointed for holding
meeting, the members present shall be the quorum.
•  
 Practical question
• Can a single member constitute a valid
quorum for a meeting?
• Unless the articles of the company otherwise provide, the members personally present
at the meeting shall elect one of themselves to be the Chairman thereof on a show of
hands. If a poll is demanded on the election of the Chairman, it shall be taken forthwith
in accordance with the provisions of Companies Act 2013 and the Chairman elected on
a show of hands shall continue to be the Chairman of the meeting until some other
person is elected as Chairman as a result of the poll, and such other person shall b
• Role of Chairman: The role of chairman may constitute;
1. to ensure that the meeting is properly convened and constituted and his own
appointment is in order;
2. to ensure that the provisions of the Companies Act and the articles in regard to the
meeting and its procedures are observed, and the business is taken in the order set out
in the agenda, and the business is within the scope of the meeting;
3. to act at all times bonafide, impartial and in the interest of the company as a whole. He
must give a reasonable chance to the members present, to discuss any proposed
resolution and ensure that views of all are adequately heard;
1. to decide issues arising for decisions during the meeting;
2. to exercise his powers of adjournment correctly. He has no powers to adjourn the meeting at
his own will and pleasure. If he declares the meeting closed prematurely and leaves the chair,
then the members may resolve to proceed with the meeting and elect another chairman and
continue with the business for which it was convened. He may, however, adjourn a meeting
if circumstances demand and he acts bonafide in the interest of the company;
3. to preserve order of the house and to see that the business is properly conducted. He has the
discretion with regard to the general conduct of the meeting and he may not allow a member
to talk as much as he likes. If a member acts in a disorderly manner and frequently interrupts
the proceedings and obstructs transaction of business, the chairman may ask him to
withdraw. If the member refuses to do so, the chairman can order his removal;
4. to exercise his power to order a poll correctly and must order it to be taken when demanded
properly;
5. to exercise his casting vote, if available in case of tie.
 Proxies
• Proxies [Section 105]: The proxy is a person appointed as an agent by the
members of a company to attend and vote on his behalf at a meeting. The form or
letter by which such person is appointed is also called as proxy or proxy form.
Hence any member of a company entitled to attend and vote at a meeting of the
company shall be entitled to appoint another person as a proxy to attend and vote at
the meeting on his behalf. A proxy shall not have the right to speak at such meeting
and shall not be entitled to vote except on a poll. Unless the articles of a company
otherwise provide, this provisions of appointing a proxy shall not apply in the case
of a company not having a share capital and the Central Government also may
prescribe a class or classes of companies whose members shall not be entitled to
appoint another person as a proxy. A person appointed as proxy shall act on behalf
of such member or number of members not exceeding fifty and holding in the
aggregate not more than ten percent of the total share capital of the company
carrying voting rights.
• Revocation of Proxy: The relationship between the proxy and the person
appointing him is that of an agent and principal, and the former must act in
accordance with the instructions of the latter. As their relationship is governed by
the law of agency, proxy can be revoked by the member at any time. The authority
of proxy is automatically revoked by the death and insolvency of the member. A
member may revoke the proxy’s authority by attending and voting himself before
the proxy has voted, the member cannot retract his vote.
• A vote given in accordance with the terms of an instrument of proxy shall be valid,
notwithstanding the previous death or insanity of the principal or the revocation of
the proxy or of the authority under which the proxy was executed, or the transfer of
the shares in respect of which the proxy is given and no intimation in writing of
such death, insanity, revocation or transfer shall have been received by the company
at its office before the commencement of the meeting or adjourned meeting at which
the proxy is used.
A. Restriction on voting Rights [Section 106]: The articles of a company may
provide that no member shall exercise any voting right in respect of any shares
registered in his name on which any calls or other sums presently payable by him
have not been paid, or in regard to which the company has exercised any right of
lien. The company is prohibited to restrict voting rights on any other ground except
right of lien.
•  
• Motion and Resolution: ‘Motion’ and ‘Resolutions’ are used synonymously but in
legal sense there is difference between the two. ‘Motion’ is a proposal submitted for
a discussion and a decision adopted by means of a resolution. A motion becomes a
resolution only after the requisite majority of members have adopted it. It is
common practice in company meetings that a motion is proposed by one member
and the same is seconded by another. A motion may be adopted by show of hands,
voting through electronic means, by demanding a poll, postal ballot.
 Question
• Ram is holding rs 11 lakh nominal share capital
of the company. The total paid up capital of
company is 100 lakh. Can Ram appoint Shyam
as his proxy to attend AGM in his behalf?
• A person may represent a single member even
if such person shareholding is more than 10 %.
The limit of 50 members or 10% is applicable
only in case where proxy is going to represent
more than one member
 Minutes of the meeting
• Within thirty days and signed by the Chairman
of the meeting
• Report of AGM MGT 15 to be filed by every
listed company within thirty days
 Business by postal ballot
• Alteration of object clause
• Conversion of private company to public or vice versa
• Shifting of registered office outside city
• Alteration of object clause where public money is still unutilized
• Issue of share with differential rights
• Variation of rights attached to class of shares or debentures or other
securites holders
• Buyback of shares
• Election of director u/s 151 small share holders directors
• Sale of substanital part of the company
• Giving loans exceeding limits u/s 186 60% of capital and reserves,
premium account or 100 percent of reserves
 Circulation of members resolution
• Signed by the requisitionist
• Six weeks before meeting
• Two weeks in other case
• Deposit of sum resonable expenses
• Submission with ROC
• Special resolutions
• Resolution agreed by all the members
• Appointment of MD resoution
• Wound up voluntarily
• Relsolutions passed by the board u/s 179(3)
• Resolution specified under sub-section (3) of section 179 of
Companies Act, 2013 are as follows :-
• (a) to make calls on shareholders in respect of money unpaid on their
shares;
• (b) to authorise buy-back of securities under section 68;
• (c) to issue securities, including debentures, whether in or outside India;
• (d) to borrow monies;
• (e) to invest the funds of the company;
• (f) to grant loans or give guarantee or provide security in respect of loans;
• (g) to approve financial statement and the Board’s report;
• (h) to diversify the business of the company;
• (i) to approve amalgamation, merger or reconstruction;
• (j) to take over a company or acquire a controlling or substantial stake in
another company;