Management and Administration – CA Inter Law Notes

Management and Administration – CA Inter Law Notes is designed strictly as per the latest syllabus and exam pattern.

Management and Administration – CA Inter Law Notes

Members’ Meetings
Members’ meetings in a company are of the following types:

• Annual General Meeting (AGM)
• Extraordinary General Meeting (EGM)
• Class meeting

Requisite of Valid General Meeting
The following are requirements of valid General Meeting:

Properly called

• It must be properly convened. The persons calling the meeting must be authorised to do so.
• Proper and adequate notice must have been given to all those entitled to attend.

Chairperson
The meeting must be legally constituted. There must be a Chairperson.

Properly conducted

• The rules of quorum must be maintained and the provisions of the Companies Act, 2013 and the Articles must be complied with.
• The business at the meeting must be validly transacted. The meeting must be conducted in accordance with the regulations governing the meetings.

Notice Of Meeting
Provisions relating to notice are equally applicable to AGM and EGM.
Length of Notice 21 clear days

• General Meeting of a company may be called by giving a clear 21 days’ notice in writing or by electronic mode.
• Where a notice of General Meeting is sent by post, it is deemed to be served on the expiry of 48 hours from its posting.
• Further, to understand the clear days, the date of posting and the date of meeting should be excluded.
• From the aforesaid views, it is clear that the notice should be dispatched latest before the 25th day from the date of the meeting.

Example:
If AGM is scheduled to be held on 30th September 2016, notice of AGM should be dispatched by 6th September 2016. (21 clear days + day of posting + day of meeting + 2 days of posting) While counting 21 clear days, day of posting and day of meeting will not be included. It means 6th September and 30th September will not be included in counting 21 days. Further, two days are added (i.e. 7th and 8th September 2016).

Shorter notice

• Annual General Meeting may be called by giving a shorter notice, if consent is obtained from 95% of members entitled to vote at such meeting.
• EGM may be called by giving shorter notice, if consent is obtained from:
• Majority of members in number who are entitled to vote; and
• Who represent not less than 95% of paid up share capital of company (If company does not have share capital, consent of members having 95% of voting power required)
• Consent is given in writing or by electronic mode.
• Articles of private company can provide for shorter period of notice. (MCA notification dated 5-6-2015)
• In case of section 8 Company, notice for GM shall not be for less than 14 days. (MCA notification dated 5-6-2015)

Contents of Notice
Details
Notice of General Meeting shall state:

• place of meeting,
• day and date of meeting,
• time of meeting, and
• agenda (ielist of business to be discussed)

Proxy Clause
Statement shall be included that member entitled to vote is entitled to appoint proxy and proxy need not to be member.

Person Entitled to Receive Notice – Section 101(3)

• Notice of General Meeting should be given to:
  • All members as per address available in Register of Members (Members include equity shareholders as well as preference shareholders)
  • In case of insolvent member, to his assignee.
  • In case of deceased member, to his legal representative.
  • Statutory Auditor(s), Cost Auditor and Secretarial Auditor of Company.
  • Every director of company
  • In case of joint holding, noticed is given to all joint holders.
• Articles of Private Company may provide that notice to directors need not to be given. (MCA notification dated 5-6-2015)
• Notice of General Meeting should be given to stock exchange in case of listed company. Copy of notice is also served to:
  • Foreign collaborators
  • Trustee of debenture holders
  • Banks and financial institution (if loan agreement provide)

Manner of Giving Notice to Members

• Notice of GM can be served to individual member either by way of:
  • Registered post; or
  • Electronic mode; or
  • Other mode as prescribed
• Notice can be given by way of personal delivery. In case of personal delivery, the notice is deemed to be given on the day when notice is handed over.
• A member may request delivery of notice through a particular mode, for which he will pay fee as determined by company in its Annual General Meeting.

Accidental Omission to Give Notice

• Accidental omission to give notice to, or non-receipt of notice by, a member will not invalidate the proceeding of meeting. But, intentional omission to send a notice to even one member will invalidate the meeting.
• This provision is not applicable to private company. Articles of private company may provide that even accidental omission to give notice can invalidate meeting. (MCA notification dated 5-6-2015)

Notice Through Electronic Mode

• Rule 18 of Companies (Management and Administration) Rules, 2014, provide following provisions for serving notice in electronic form:
  • Electronic form or mode means communication by company through its secured computer programme which is capable of producing confirmation.
  • Notice through email can be send as text or attachment or electronic link or URL.
  • Notice should be send to member’s email id. Company should provide opportunity once in financial year to register or change their email id.
  • Subject line of email should contain name of company, type of notice, place and date of meeting.
  • If notice is sent in pdf format, software should be provided to open and read notice sent.
  • Company should ensure that system or software it is using provide proof of sending (Le. how many emails send, received, bounce back etc.)
  • Company may send email by itself or by agency.
  • The responsibility of sending notice is over as and when notice in electronic form is transmitted.
• Notice send to members should be uploaded on website of company.

Important Note:

• No default on the part of company, if member does not update his address.
• The company may send email through in house facility or its Registrar and Transfer Agent or authorise any third party agency providing bulk email facility.

Statement to be Annexed to Notice – Section 102

• Where any items of special business are to be transacted at the General Meeting, statement setting out following materials facts shall be attached to notice:
  • Nature or concern of interest (direct or indirect) of every director, manager, Key Managerial Personnel and their relatives concerning each item of the special business
  • Any other information which helps to understand and to take decision on business
  • 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
• This section is not applicable to private company and specified IFSC public company, if Articles of private company so provide.
• If as result of improper disclosure any promoter, director, KMP or his relative has obtained benefit, he should hold it in trust and compensate company.

Annual General Meeting – Section 96
Applicability
Provisions of Annual General Meeting are applicable to all companies except OPC.

Purpose
Annual General Meeting is held for the purpose of consideration of financial statements by members.

Important Note:

• Holding of Annual General Meeting is necessary even if accounts are not ready. – Priyanka Overseas vs. Pasupati Fabrics
• Annual General Meeting must be held even if company has not business or company did not function. – Madan Gopal Dev vs. State of West Bengal

Business at AGM Ordinary Business

• At every Annual General Meeting, the following matters must be discussed and decided. Since such matters are discussed at every Annual General Meeting, they are known as ordinary business.
• The following matters constitute ordinary business at an Annual General Meeting:
  • Consideration of financial statements, director’s report and the auditor’s report
  • Declaration of dividend, if any.
  • Appointment of directors in the place of those retiring
  • Appointment of and the fixing of the remuneration of the statutory auditors.

Special Business
All other matters other than ordinary business to be discussed at the Annual General Meeting are special business.

Holding of AGM First AGM

• First Annual General Meeting should be held within 9 months from the end of the first financial year.
• Therefore, it shall not be necessary for the company to hold any Annual General Meeting in the year of its incorporation.

Subsequent AGM

• Every company shall hold Annual General Meeting once in calendar year (Le. from 1st January to 31st December)
• Annual General Meeting shall be held within 6 months from the end of financial year.
• Time gap between two Annual General Meetings shall not be more than 15 months.
• All of the above limits are complied with. It means, company should hold Annual General Meeting at the earliest of the above three time limits.

Extension of time for holding AGM

• No extension of time is available for first Annual General Meeting.
• In the case, there is any difficulty in holding any Annual General Meeting, the Registrar may, for any special reasons shown, grant an extension of time for holding the meeting by a period not exceeding 3 months.
• Court does not have authority to grant extension of time for holding Annual General Meeting.

Procedure for application for extension

• Application is made on plain paper after passing Board Resolution.
• Application is made before due date for holding Annual General Meeting.
• Copy of Board Resolution is attached with application.

Time for Holding AGM

• The Annual General Meeting must be held during business hours.
• Business hours means – 9 a.m. to 6 p.m.
• The Annual General Meeting has to be called before 6 p.m. However, once meeting commences, it can continue even after 6 p.m.
• A company may, by appropriate provisions in its Articles, fix the time for its Annual General Meeting and may also by a resolution passed in one Annual General Meeting fix the time for its subsequent Annual General Meetings.

Day for Holding AGM

• Annual General Meeting cannot be held on National holiday. 15th August and 26th January are national holidays. Sunday is public holiday.
• National holiday is declared by Central Government.
• If any day is declared by the Central government to be a national holiday after the issue of the notice convening such meeting, such a day will be treated as a working day.

Place for Holding AGM

• Annual General Meeting shall be held 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, however, exempt any class of companies from the above provisions.
• Meeting of Government Company can be held at any place approved by Central Government. (MCA notification dated 5-6-2015 under section 462)

Default in Holding AGM
CG direct to call AGM

• Any member of the company may apply to the Tribunal.
• The Tribunal may call, or direct the calling of the meeting, and give such ancillary or consequential directions as it may consider expedient in relation to the calling, holding and conducting of the meeting.
• The Tribunal may direct that one member present in person or by proxy shall be deemed to constitute the meeting.
• A meeting held in pursuance of this order will be deemed to be an Annual General Meeting of the company.
• For any default in holding a meeting, the company and every officer in default shall be punishable with fine up to ₹ 1 lakh; and
• In case of continuing default, with a further fine which may extend to ₹ 5,000 for each day during which such default continues.

Extraordinary General Meeting (Egm)- Section 100
Purpose

• Every General Meeting other than the Annual General Meeting is an Extraordinary General Meeting.
• Such meeting is usually called by the Board of Directors for some urgent business which cannot wait to be decided till the next Annual General Meeting.
• Every business transacted at such a meeting is special business.

Who can Call EGM?
EGM can be called by:

• Board of Directors; or
• Board on requisitions of members; or
• Requisitionists; or
• Tribunal

By Board – Section 100(1)
Board of directors may call EGM when they deem fit.

By Board on request – Section 100(2)

• Members of a company have the right to require the calling of an EGM by the directors.
• The Board of directors of a company must call an EGM if required to do so by the following number of members:
  • Holding not less than 1/10th of paid up capital on the date of receipt of requisition in the case of company having share capital; or
  • Holding 1/10th of the total voting rights on the date of receipt of requisition in the case of company not having share capital.

By requisitionists -Section 100(4)
If the directors fail to call the EGM on the valid requisition as aforesaid, the requisitionists may themselves proceed to call meeting and claim the necessary expenses from the company.
Such EGM should be called within 3 months from date of requisition.

• The company can make good this sum from the directors in default.
• If quorum is not present within 30 minutes from the scheduled time of a meeting called by requisitionists, the meeting shall stand cancelled.
• Procedure and provisions for calling EGM by Requisitionists.
• The requisitionists should give notice at least 21 days in advance. Notice may be given in writing or by electronic mode.
• Notice shall be signed bv all requisition¬ists.
• Explanatory statement under section 102 need not to be attached but reason of meeting may be disclosed.
• Requisitionists have right to receive list of shareholders and other necessary details to convey EGM when Board fails to convey EGM on requisition.
• The requisition must state the objects of the meetings and must be signed by the requisitioning members.
• The requisition in writing must be deposited at the company’s registered office. When the requisition is deposited at the registered office of the company, the directors should within 21 days, move to call a meeting and the meeting should be actually be held within 45 days from the date of the deposition of the requisition.

EGM on order of Tribunal – Section 98

• Tribunal may order to call or conduct EGM, if it is impracticable to call a meeting.
• Tribunal may order either on:
  • its own motion, or
  • the application of any director of the company, or
  • application of any member of the company, who would be entitled to vote at the meeting
• Tribunal can order a meeting to be called and conducted as it thinks fit, and may also give such other ancillary and consequential directions.
• A meeting so called and conducted shall be deemed to be a meeting of the company duly called and conducted.

Place of EGM

• EGM can be held anywhere in India. – Rule 18 of Companies (Management and Administration) Rules, 2014.
• But, EGM of company, other than of the wholly owned subsidiary of a company incorporated outside India, shall be held at a place within India.
• However, in case of specified IFSC public company, Board may with consent of all shareholders convey its EGM at any place within India or outside India.

Time for Holding EGM
EGM can be held at any time. It is not necessary that EGM should be held within business hours.

Day for Holding EGM
EGM can be held on any day. It means, EGM can be held on public holiday or national holiday.

Quorum For General Meeting – Section 103
Quorum refers to the minimum number of members who must be present at a meeting in order to constitute a valid meeting.
Following shall be quorum:

Subject matter	No. of members person­ally present at meeting
Public company- If number of members on date of meeting is not more than 1000	5 members
Public company- If number of members on date of meeting is more than 1000 but upto 5000	15 members
Public company- If number of members on date of meeting exceed 5000	30 members
Private company	2 members

The Articles of a company may provide for higher quorum.
In the case of OPC, the resolutions to be passed at General Meeting shall be agreed upon by the sole member. (Regulation 48 of Table F) Thus, holding actual meeting is not necessary.
If total number of members itself is less than prescribed quorum, all members present will form quorum, even if number is less than prescribed number.

Absence of Quorum or if Quorum Not Present

• If within half an hour from the time appointed for holding a General Meeting of the company, a quorum is not present in the person, the meeting:
  • if called upon the requisition of members, shall stand cancelled;
  • in any other case, it shall stand adjourned to the same day in the next week, at the same time and place, or to such other day and time as the Board of Directors may determine
• If at the adjourned meeting, there is no quorum within half an hour from time appointed for the meeting, members present (not being less than two) shall be quorum.

Chairman For General Meeting – Section 104

• As per Regulation 45 of Table F of Companies Act, 2013, Chairman of the Board of directors generally chair all the meetings. Thus, if company has adopted Table F and if the Board of directors have appointed a Chairperson, that chairperson, if present, will preside as chairperson of meeting.
• If there is no such Chairperson, or if he is not present within 15 minutes after the time appointed for holding meeting, or is unwilling to act as Chairperson of meeting, the directors present shall elect one of themselves as chairperson of meeting. – Regulation 46 of Table F
• If at any meeting no director is willing to act as Chairperson of if no director is present within 15 minutes after the time appointed for holding the meeting, the members present shall choose one of themselves as chairperson. – Regulation 47 of Table F

Company has not adopted Table F
If there is no provision in Articles of the company, members personally present at the meeting shall appoint one of themselves a Chairperson.

Appointment by Tribunal
The Tribunal cannot appoint Chairperson except:

• When meeting is ordered by Tribunal; or
• In case of extraordinary situation (to remove deadlock in management)

Power & Duties of Chairman
The Act and the Articles of the company provide various powers and duties of the Chairman of a company which are given below:

• to declare the result of voting by show of hands
• to order poll to be taken by him when demanded by members
• to appoint scrutinizers to scrutinise the votes given on the poll and to report to him
• to regulate the manner in which a poll shall be taken
• to exclude certain matters from the minutes of the meeting if he is of the opinion that
• it is or would reasonably & regarded as defamatory of any person
• is irrelevant or immaterial to the processing or is detrimental to the interest of the company
• to regulate the proceedings at the meeting
• to see that the provisions of the Companies Act, Articles of the company and any other law are complied with
• to ensure that minutes are prepared and signed within the time specified in the Act

Casting vote

• Casting vote means additional vote in case of equality of votes.
• Casting vote is available to Chairperson to avoid deadlock.
• As per section 114, in case of Ordinary Resolution, the Chairperson shall have casting vote.
• Casting vote can be exercise by Chairperson at the show of hands or by electronic mode or on poll.
• Chairperson has discretion in using a casting vote. He can vote in different way than in which he exercised first vote. He may even decide not to use casting vote.
• Provision of casting vote is applicable to Board Meetings and General Meetings.
• In case of General Meeting, Chairperson has casting vote even if he is not a member of company.
• Chairperson can cast his casting vote only after voting process is completed and there is equality of votes, regardless of whether or not he has exercised his vote.

Important Note:
This section is not applicable to private company and specified IFSC public company, if Articles of private company so provide.

Proxy – Section 105
Meaning – Proxy
A member may appoint another person to attend and vote at a meeting on his behalf. Such other person is known as ‘Proxy’.

Who can be Ap-pointed as Proxy?

• Any natural person can be appointed as proxy.
• Member or non-member can be appointed as proxy. However, in case of section 8 Company, non-member cannot be appointed as proxy.
• Minor or person of unsound mind can be appointed as proxy.
• Single person cannot be appointed as proxy for more than:
  • 50 members; and
  • Members holding 10% capital carrying voting right (Rule 19 of Companies (Management and Administration) Rules, 2014
• In case of a company not having share capital, a proxy can be appointed only if Articles provide for such appointment.
• Even members holding non-voting shares can appoint proxy to attend a meeting.

Appointment of Proxy
Proxy Form

• The proxy form must be in writing and be signed by the member.
• In the case of joint holding, proxy form signed by senior member is adequate, if company has adopted Regulation 52 of Table F.
• Proxy form must be duly stamped.
• Proxv is appointed bv filing proxy Form inMGT 11
• If member has appointed proxy in Form MGT-11, company cannot reject it.
• Proxy form (i.e., MGT-11) clearly states that the appointment of proxy is for specific meeting including an adjournment of such meeting.
• A proxy can be appointed by giving General Power Attorney.

Submission of Proxy Form
Proxy form should be submitted at registered office at least before 48 hours from schedule time of meeting.

Example:
Proxy can be deposited on Sunday, if the meeting is on Tuesday. There is no provision to exclude holiday while counting 48 hours.

• Articles cannot provide longer period than 48 hours.
• This provision is not applicable to private company. Articles of private company may provide for shorter period for deposit of proxy. – MCA notification dated 5-6-2015

Statement on Appointment of Proxy in Notice
Every notice calling a GM of the company must contain a statement that a member entitled to attend and vote is entitled to appoint one proxy in the case of a private company and one or more proxies in the case of a public company and that the proxy need not be member of the company.

Rights of Proxy

• Proxy has right to attend meeting but he cannot be compelled to attend the meeting.
• Proxy has not right to speak at meeting.
• He cannot exercise his right to vote on show of hands. However, proxy can demand poll and exercise vote on poll.
• Proxy cannot appoint another person as his proxy.
• Proxy is not counted for the purpose of quorum.

Inspection of Proxy Form

• Proxy form can be inspected by member.
• To inspect proxy form, member shall give notice at least 3 days before date of meeting.
• If notice as above is given, member can inspect proxy form, during the period beginning 24 hours before the date fixed for the meeting.

Prohibition to Invite Proxy

• A company cannot issue an invitation at its expense asking any member to appoint a particular person as proxy.
• If the company does so, every officer in default shall be liable to fine up to ₹ 1 Lac.

Revocation of Proxy

• The proxy can be revoked by the member at any time.
• The member may revoke the proxy by voting himself before the proxy has voted, but once the proxy has exercised the vote, the member cannot recast his vote. – Regulation 59 of Table F
• If a member who has appointed a proxy dies or becomes insane, the proxy normally stands revoked, if the company has received written communication to this effect.

Proxy at Ad-journed Meeting

• Proxy for original meeting is valid for adjourned meeting also, as adjourned meeting is only continuation of original meeting.
• However, as per Regulation 57 of Table F, proxy can be deposited 48 hours before the time for holding the meeting or adjourned meeting or in case of poll, at least 24 hours before the time appointed for taking a poll.
• Thus, a member can appoint proxy at adjourned meeting or for poll even if had not appointed proxy at the original meeting.

Difference Between Proxy and Representative

• A ‘proxy’ is different from ‘authorised representative’.
• A company can appoint a person as its ‘Representative’ at the meeting. Such representative is treated as a member for the purpose of quorum. He can speak at the meeting and vote even on show of hands on behalf of the company he represents. A ‘proxy’ cannot speak and vote only at poll.
• The ‘proxy’ cannot participate in the meeting and can vote only when poll is demanded, while ‘representative’ can do all what a member can do.
• Proxy is not counted as quorum, but ‘representative’ is counted towards quorum. He can even appoint proxy to vote for him, while proxy, being agent, cannot appoint another proxy.
• Individual member can appoint proxy but if a company is member, it can appoint proxy or authorised representative.
• Proxy is appointed by proxy form while authorised representative is appointed either by power of attorney or bypassing board resolution.

Important Note:
This section is not applicable to private company and specified IFSC public company, if articles of private company so provide.

Provision Relating To Voting – Sections 106 To 109
Restriction on Voting rights – Section 106

• Member shall not exercise any voting right on shares on which:
  • Company has exercised any right of lien; or
  • Any call or sum payable have not been paid
• Company cannot prohibit member from exercising his voting right on any other ground.

Important Note:
This section is not applicable to private company and specified IFSC public company, if Articles of private company so provide.

Methods of Voting
Act allowed following methods of voting at General Meeting:

• Voting by show of hands
• Voting by poll
• Voting by postal ballot
• Voting through electronic means

Voting by Show of Hands – Section 107
At first instance
Resolution put to vote at General Meeting at first instance carried out by show of hands unless poll is demanded.

Meeting at instance of Court order

• When General Meeting is ordered by Court or Tribunal, voting shall be carried out by poll method.
• This section is not applicable to private company and specified IFSC public company, if Articles of private company so provide.

Voting by Electronic Means
Explained in detail in later part of this chapter.

Voting by Poll
Explained in detail in later part of this chapter.

Voting by Postal Ballot
Explained in detail in later part of this chapter.

Some Special Provisions on Voting

• Full voting rights cannot be conferred on partly paid up shares by Articles of company.
• Members are not entitled to voting rights in respect of call amounts paid in advance before they are called up.
• If shares are held in trust, the voting rights are exercisable by person in whose name the shares are held.
• In case of minor or person of unsound mind, voting shall be made by guardian.

Voting Through Electronic Means – Section 108
Applicability
Following companies may provide electronic voting facility to its members:

• Every company whose equity shares are listed; or
• Every company having not less than 1000 shareholders.

Important Note:
Provisions of section 108 is not applicable to:

• Nidhi company
• company listed on SME platform (small and medium enterprise)
• company listed on institutional trading platform exclusively (ITP)

Provisions Applicable or Procedure
Company which has opted to allow electronic voting facility should comply with following:

Notice of meeting

• The notice of the meeting shall be sent to all the members, auditors of the company, or directors either:
  • by registered post or speed post; or
  • through electronic means like registered e-mail id; or
  • through courier service
• The notice shall also be placed on the website of the company.
• The notice of the meeting shall clearly mention that the business may be transacted through electronic voting system and the company is providing facility for voting by electronic means.
• The notice shall clearly indicate the process and manner for voting by electronic means and the time schedule including the time period during which the votes may be cast and shall also provide the login ID and create a facility for generating password and for keeping security and casting of vote in a secure manner.
• Notice of meeting shall state that facility of voting, either through e-voting or ballot or polling paper is available at meeting. Members attending meeting who have not casted their vote by remote e-voting will be eligible to exercise their right at the meeting.
• Notice must state that member who have casted their vote by remove e-voting before meeting may attend meeting but shall not entitled to cast their vote again.

Advertisement in Newspaper
Company shall publish an advertisement immediately on completion of dispatch of notices but at least 21 days before the General Meeting at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated, and having a wide circulation in that district, and at least once in English language in an English newspaper having a wide circulation in that district, about having sent the notice of the meeting and specifying therein, inter alia, the following matters, namely:

• statement that the business may be transacted by e-voting;
• the date of completion of sending of notices;
• the date and time of commencement of voting through electronic means;
• the date and time of end of voting through electronic means;(i.e., cut-off date)
• the statement that voting shall not be allowed beyond the said date and time;
• website address of the company and agency, if any, where notice of the meeting is displayed:
• contact details of the person responsible to address the grievances connected with the electronic voting

e-voting

• E-voting shall remain open for at least 3 days. It will close at 5.00 PM on the date preceding the date of General Meeting.
• During the e-voting period, shareholders of the company, holding shares either in physical form or in dematerialized form, as on the record date, may cast their vote electronically.
• Once the vote on a resolution is casted by the shareholder, he is not allowed to change it subsequently.
• At the end of the voting period, the portal where votes are casted shall forthwith be blocked.

Scrutinizer

• Board of directors shall appoint scrutinizer.
• Any of following person may be appointed as scrutinizer:
  • CA in practice; or
  • Cost Accountant in practice; or
  • CS in practice; or
  • An advocate
• Person who is in employment of the company cannot be appointed as scrutinizer.
• The scrutinizer may take assistance of a person who is not in employment of the company and who is well-versed with the e-voting system.
• The scrutinizer shall unblock the votes in presence of at least two witnesses not in the employment of company after conclusion of General Meeting.
• Scrutinizer shall submit report of the votes casted in favour or against, if any, within 3 days of conclusion of meeting.
• The scrutinizer shall maintain a register either manually or electronically to record the assent or dissent, received, mentioning the particulars of name, address, folio number or client ID of the shareholders, number of shares held by them, nominal value of such shares and whether the shares have differential voting rights.

Report to Chairman

• Register and all other papers relating to electronic voting shall remain in the safe custody of the scrutinizer until the Chairman considers, approves and signs the minutes and thereafter, the scrutinizer shall return the register and other related papers to the company.
• Results declared along with the scrutinizer’s report shall be placed on the website of the company and on the website of the agency after approval of Chairman.
• Subject to receipt of sufficient votes, the resolution shall be deemed to be passed on the date of the relevant General Meeting of members

Important Note:
A resolution proposed to be considered through e-voting means shall not be withdrawn.

Voting By Poll – Section 109
When Poll can be Demanded?
Poll can be demanded at any time before or on the declaration of the result of the voting on any resolution on show of hands.

Who can Demand Poll?
Poll can be demanded by:

• Chairman; or
• Required number of members

Chairman
Chairman of meeting can order poll to be taken on its own.

Members or proxy
Chairman of m to be taken wh eeting should order poll m demand is made by:

Type of Company Requirement

Type of Com­pany	Requirement
Company having share capital	Members present or by proxy holding at least 1/10th of voting power or holding shares on which not less than ₹ 5 Lacs has been paid.
Other company	Members present or by proxy holding at least 1/10th of voting power.

Time for Taking Poll
Immediately
A poll shall be taken immediately, if it is demanded for:

• adjournment of the meeting; or
• appointment of Chairman of the meeting

Within 48 hours

• If poll is demanded for any other matter, it shall be taken within 48 hours from demand of poll.
• When poll is demanded for particular business agenda, other agenda item of business may continue.

Resolution Passed Invalid
If a poll validly demanded is refused by Chairman, the business carried through show of hands is invalid. – Namita Gupta vs. Cachar Native Joint Stock Co.

Withdrawal of Poll
The demand for a poll may be withdrawn at any time by the persons who made the demand.

Process or Procedure in Case of Poll
As per Rule 21 of Companies (Management and Administration) Rules, 2014, following procedure shall be complied with to conduct voting through poll method:

Appointment of Scrutineers

• The Chairman shall appoint scrutinizer to report on result of poll.
• The Board of directors shall appoint one scrutinizer, who may be Chartered Accountant in practice, Cost Accountant in practice, or Company Secretary in practice or an advocate, but not in employment of the company and is a person of repute.

To provide details to scrutinizers
Scrutinizer is provided Register of Members, specimen signatures of members, Attendance Register and Register of Proxies.

Distribution of polling papers

• The scrutinizers sh all arrange for polling papers and distribute them to the members and proxies present at the meeting.
• The polling papers shall be in Form- MGT-12.

Polling Box

• The scrutinizers shall lock and seal an empty polling box in presence of members and proxies.
• Polling box should be opened in presence of two persons after voting process is over.

Counting of vote and report

• The scrutinizer shall count the votes casted on poll and prepare a report thereon addressed to the Chairperson.
• His report shall state total votes cast, valid votes, votes in favour and against the resolution including the details of invalid polling papers and votes comprises therein.
• Scrutinizers shall submit report to the Chairperson who shall countersign the same.
• Report shall be submitted in Form MGT- 13.

Declaration of result
The Chairman shall declare the result of voting on poll.

Important Note:
This section is not applicable to private company and specified IFSC public company, if articles of private company so provide.

Voting By Postal Ballot – Section 110
What is Postal Ballot?
Postal Ballot’ means voting by post or through any electronic mode. – Section 2(65)

Purpose

• The idea behind postal ballot is ‘corporate democracy’.
• Members can cast their vote on important resolutions through post without attending General Meeting.

When Voting is Carried out by Postal Ballot?

• A company is compulsorily required to pass certain resolutions (Le. specified by Central Government) by postal ballot, (explained in detail on later part of table)
• In addition to the above, company may voluntarily pass any other resolution by way of postal ballot.
• However, following resolution cannot be passed by postal ballot:
  • Ordinary business
  • Any business where directors or auditors have right to be heard at any meeting.

Business Trans-acted Through Postal Ballot
As per Rule 22 of the Companies (Management and Administration) Rules, 2014 following items of business shall be transacted only by means of voting through postal ballot:

• Alteration of object clause of Memorandum.
• Conversion of private company into public company and vice versa.
• Change in place of registered office outside the local limits of any city, town or village.
• Change in objects for which a company has raised money from public through prospectus and still has any unutilised amount out of the money so raised.
• Issue of shares with differential voting rights
• Variation of rights of shareholders or debenture holders or other security holders.
• Buy-back of shares of company
• Election of small shareholders’ director
• Sale of the whole or substantially the whole of an undertaking of company
• Giving loans or guarantee or providing security in excess of limit

Important Note:

• However, OPC and other companies having members upto 200 are not required to transact any business through postal ballot.
• Any item of business required to be transacted by means of postal ballot can be transacted at General Meeting by a company which is required to provide facility to members to vote by electronic means under section 108.

Procedure for Postal Ballot
As per Rule 22 of Companies (Management and Administration) Rules, 2014, following procedure shall be complied with to conduct voting through postal ballot:

Appointment of Scrutinizer

• The Board shall appoint one scrutinizer, who is not in employment of company.
• Scrutinizer shall be willing to be appointed for postal ballot process.

Notice to Members

• Pass necessary Board resolution for postal ballot. The Board should also fix record date and time schedule for various activities and finalise calendar of events.
• Company shall send a notice to all the shareholders, along with a draft resolution explaining the reasons therefor and requesting them to send their asset or dissent on postal ballot, within period of 30 days from the date of dispatch of notice.
• Notice is also posted on website of company.

Mode of sending notice
Notice can be send either:

• By Registered post or speed post; or
• Through electronic means like registered email; or
• Through courier service

Advertisement in Newspaper
An advertisement shall be published about dispatch of postal ballot in:

• A vernacular newspaper in the principal vernacular language of the district in which registered office of company is situated; and
• English newspaper Content of advertisement

The advertisement shall specify following matters:

• A statement that the business is to be transacted by postal ballot
• The date of completion of despatch of notices
• The date of commencement of voting through postal ballot
• The date of end of voting through postal ballot
• A statement that any postal ballot received after the date of end of voting period will be invalid
• A statement that the members, who have not received postal ballot forms may apply to company and obtain a duplicate postal ballot
• The contact details of the person responsible in case of any grievances with postal ballot voting

Safe custody of postal ballot

• Postal ballot received back from the shareholders shall be kept in the safe custody of the scrutinizer.
• Postal ballot and other relating papers shall be under safe custody of the scrutinizer till Chairman sign minutes.
• Scrutinizer shall maintain register to record asset or dissent received and other details.
• Ballot papers received after 30 days are ignored.
• Ballot papers without signature of member or mismatch signature are ignored.

Report of Scrutinlzer
The scrutinizer shall submit his report as soon as possible but not later than 7 days.

Declaration of result

• The result of postal ballot along with scrutinizer’s report shall be placed on website of company.
• The resolution through postal ballot shall be deemed to be passed on the date of General Meeting.

Resolution – Section 114-115
What is Resolution?

• Resolutions mean decisions taken at a meeting.
• Once the motion is passed, it becomes a resolution.
• A valid resolution can be passed at a properly convened meeting with the required quorum.

Types of Resolution
There are broadly three types of resolutions :

• Ordinary Resolution
• Special Resolution
• Resolution requiring special notice

Ordinary Resolution-Section 114 Provisions

• Resolution shall be an Ordinary Resolution if:
  • Notice has been duly given; and
  • Passed by a simple majority
• Ordinary Resolution means votes casted either by members or proxies or electronic mode or postal ballot methods are more than votes casted against resolution.
• While calculating, casting vote if any should be also included.

Example
At General Meeting of company, 20 members were present. Out of 20 members present, 10 voted in favour of resolution, 5 voted against it and 5 members abstain from voting. Here, calculation of simple majority (ie. more than 50%) is made based on the total number of valid votes casted. Total valid votes casted are 15, out of which 10 are in favour of resolution. Ordinary Resolution is passed.

Special Resolution-Section 114
Provisions

Resolution shall be Special Resolution if:

• Notice specify intention to propose resolution as Special Resolution.
• Notice is duly given, and the number of votes cast in favour of the resolution is at least three times the number of votes cast against it, either by a show of hands or on a poll in person or by proxy

Example:
At General Meeting of company, 20 members were present. Out of 20 members present, 16 voted in favour of resolution, 4 voted against it. Total valid votes casted are 20, out of which 12 are in favour of resolution. Special Resolution is passed.

Subject matters of Special Resolution
Following subject matters shall be passed through Special Resolution:

• Alteration of object clause
• Change of registered office from one state to another
• To issue further shares without offering them to existing members
• Appointment of relative of director
• Alteration of Articles of association
• To provide loan and investments in other companies beyond prescribed limits.

Filing of Special Resolution
As per section 117, copy of every Special Resolution is filed with Registrar within 30 days of passing.

Resolution Re-quiring Special Notice – Section

• Certain resolutions require that special notice is given to move such resolutions.
• The notice of the intention to move such resolution shall be given to the company by member(s)
  • Holding not less 1% of total voting power; or
  • Holding shares on which an aggregate sum of not less than ₹ 5 lac has been paid up.
• Notice can be given by member to company not earlier than 3 months but at least 14 days before date of the meeting at which resolution is to be moved, excluding date of notice and date of meeting.
• On receipt of notice, company is required to give notice to its members at least 7 days in advance.
• If giving notice is not practical, it shall be published in one English and one vernacular newspaper.
• The notice is posted on website of company, if any.

Examples:
As per Companies Act, 2013, special notice is required for:

• Resolution to remove director before expiry of his period.
• Resolution to appoint another person as director in place of removed director.
• Resolution to appoint a person as auditor other than retiring auditor.
• Resolution expressly providing that the retiring auditor shall not be appointed.

Resolutions And Agreements To Be Filed With Roc – Section 117
Mandatory Filing
The company shall file with Registrar, a copy of following resolutions and agreements:

• Special Resolutions
• Resolutions which have been agreed to by all the members of a company, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed as special resolutions
• Board Resolution or agreement relating to the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a managing director
• Resolutions or agreements which have been agreed to by any class of members but which, if not so agreed to, would not have been effective for their purpose unless they had been passed by a specified majority or otherwise in some particular manner; and all resolutions or agreements which effectively bind such class of members though not agreed to by all those members;
• Resolutions passed by members in General Meeting authorising the Board of directors in pursuant to section 180(1)(a) and section 180( 1)(c)
• Resolutions requiring a company to be wound up voluntarily
• Resolutions passed as per section 179(3) [However, private company and specified IFSC public company are not required to file resolution passed under section 179(3)]
• Any other resolution or agreement as may be prescribed and placed in the public domain

Time Limit
Resolutions shall be filed within 30 days of passing and agreements shall be passed within 30 days from its execution.

Manner of Filing
Resolution and agreement shall be hied in Form MGT-14.

Minutes Of Meeting – Section 118

• ‘Minutes’ means a fair and correct summary of the proceeding of the meeting.
• It is official record of the company and it helps us in understanding deliberations and decision taken at the meeting.

Applicability

• Provisions of minutes are applicable to all types of company.
• Minutes are also required to be maintained for committee meetings and resolution passed through postal ballot.
• Section 8 company is not required to have minute book, (for Board Meetings and General Meetings) except its articles have provision about confirmation of minutes. – MCA Notification dated 5-6-2015

Manner of Preparation

• Separate minute book shall be maintained for each class of meetings.
• All appointments made at any meeting shall be included in the minutes. Minute of Board Meeting shall include:
  • Name of directors present at meeting; and
  • Where any resolution is passed at the meeting, the name of directors, dissenting from the resolution and the names of directors not concurring with the resolution.
• The pages of minute book shall be consecutively numbered.
• The company should comply with applicable Secretarial Standards. However, it is not required to be complied by specified IFSC public and IFSC private company.

Exclude Matter by Chairman
The Chairman has discretion to include or exclude any matter in the minutes. He can exclude any matter, if he is of the opinion that it is:

• Defamatory to person; or
• Immaterial or irrelevant; or
• Detrimental to the interest of company.

Signing of Minute

• The minute of every meeting shall be prepared and entered into minute book within 30 days from conclusion of meeting.
• Every page of minute book shall be initialled or signed; and
• Last of page of every minute shall be dated and signed by:

In case of BM and Committee Meeting
The Chairman of the same meeting or the Chairman of next meeting.

In case of GM

• It shall be signed by the Chairman of the same meeting within 30 days.
• In the case of death or inability of that Chairman, by any director who is authorised by Board in this behalf.

Place of Keeping Minute Book

• Minute book is kept at registered office of company.
• It should be kept in custody of Company Secretary of company or any director authorized by Board.

Permanent Records
The minute books shall be preserved permanently.

Prohibition to Publish Minute
Minutes of the General Meeting should not be advertised or published at expenses of company, unless they contain full minutes as required under Companies Act.

Inspection of Minute Book of General Meeting – Section 119

• Minute Book of General Meeting should be made available for inspection of any member at registered office of company. (not allowed to outsiders)
• It should be available for inspection during business hours, subject to reasonable restriction as specified in Articles or in General Meeting.
• Minute book must be available for inspection for at least 2 hours in a day.
• Copy of minute book should be provided to any member within 7 days on payment of prescribed charge.
• Directors are entitled to inspect minute book of all meetings.
• Auditor or Cost Auditor or Secretarial Auditor may inspect minutes in course of audit or certification.

Important Note:
Minute book of Board Meetings are not open for inspection to members or outsider except where Articles authorise in this regard.

Refusal of Inspec-tion or Failure to Supply Copy

• In case of refusal of inspection or refusal to supply copy within 7 days, company and defaulting officer are liable to pay penalty.
• In case of refusal or default, the member can approach NCLT, by order, direct immediate inspection of minute book or direct that copy be sent.

Report Of Agm – Section 121
Applicability
Every listed company is required to file report of Annual General Meeting to Registrar.

Provisions Content and format

• The report is prepared in Form MGT-15.
• The report is in addition to the minutes of Annual General Meeting.
• It shall include following details:
  • Day, date, hour and venue of Annual General Meeting
  • Confirmation with respect to appointment of Chairman of Annual General Meeting
  • Number of members who attended meeting
  • Confirmation with respect to compliance with Act and rules for calling, convening and conducting Annual General Meeting
  • Businesses transacted at Annual General Meeting
• Particulars of any adjournment, postponement of meeting, change in venue, if any.

Time
The report is filed within period of 30 days from conclusion of Annual General Meeting.

Signing of Report
The report shall be signed and dated by the Chairman of the meeting or in case of his inability to sign, by any two directors of the company, one of whom shall be the Managing Director, if there is one and Company Secretary of the company.

Annual Return – Section 92
Mandatory Filing

• Annual return shall be filed by every company within 60 days from holding AGM to ROC in Form MGT-7.
• If AGM is not held for a year, annual return should be filed within 60 days from the last day on which the AGM should have been held.

Particulars
The annual return shall give following information:

• Its registered office, principal business activities, particulars of its holding, subsidiary and associate companies;
• Its shares, debentures and other securities and shareholding pattern;
• Its indebtedness;
• Its members and debenture-holders along with changes therein since the close of the previous financial year;
• Its promoters, directors, key managerial personnel along with changes therein since the close of the previous financial year;
• Meetings of members or a class thereof, Board and its various committees along with attendance details;
• Remuneration of directors and Key Managerial Personnel; (For small company aggregate amount of remuneration drawn by directors shall be given)
• Penalty or punishment imposed on the company, its directors or officers and details of compounding of offences and appeals made against such penalty or punishment;
• Matters relating to certification of compliances, disclosures as may be prescribed;
• Details, as may be prescribed, in respect of shares held by or on behalf of the Foreign Institutional Investors indicating their names, addresses, countries of incorporation, registration and percentage of shareholding held by them; and
• Such other matters as may be prescribed

Signing of Return

• Annual return is signed by one director and Company Secretary of the company and where there is no company secretary, it should be signed by Company Secretary in Practice.
• Annual return of OPC, small company and private company which is start-up shall be signed by company secretary. It shall be signed by director, if there is no company secretary.

Certification of AR

• Annual return shall be certified by practising company secretary that it disclose correct and required fact as per provision of Companies Act, 2013 in case of following companies:
  • Listed company; or
  • Company having paid up capital of ₹ 10 cr. or more; or
  • Company having turnover of ₹ 50 cr. or more
• Certificate shall be given in Form MGT-8

Attach with Board’s Report

• Extract of annual return shall be attached with Board’s Report in Form MGT-9. This provision is not applicable to unlisted public and private companies license to operate from IFSC.
• Copies of annual return, certificate and documents required to be annexed shall be preserved for period of 8 years from date of filing.

Return In Case of Change In Promoters’ Stake – Section 93
Applicability

• Every listed company shall filed with ROC return in respect of changes in number of shares held by promoters and top 10 shareholders within period of 15 days from change.
• Return is required to be filed when there is increase or decrease of 2% of shareholding position of promoters and top 10 shareholders.

Form
Return is filed in Form MGT-10.

Practice Questions

Question 1.
Write short note – Rights of the members of the company in regard to General Meeting of the company.
Answer:
Member of company has following rights with respect to General Meetings:

• Right to receive notice of meetings
• Right to attend meeting and vote
• Right to be counted for quorum
• Right to appoint proxy
• Right to inspect proxy form lodged with company
• Right to participate at General Meetings
• Right to elect Chairman of meeting
• Right to demand poll and withdraw demand of poll
• Right to apply NCLT for calling EGM of the company where it is impractical to call such meeting
• Right to give special notice and give notice of resolution requiring special notice
• Right to inspect and obtain copy of minute
• Right to receive copies of financial statement and annual report

Question 2.
Acrid Ltd. maintains the minute book of the Board Meetings in loose leaf system and gets them bound once in three months. Can it do so? Board meeting were held on 24th March 2002 and 15th April 2002. Ronie, who was the Chairman of these two meeting died on 1st May 2002, without signing the minutes of the Board Meeting held on 15th April 2002. How should the minutes be signed and by whom?
Answer:
The minute book must be a bound book. However, maintaining minute book in loose leaf permitted but in such circumstances company must get it bounded at interval of reasonable time (ie., not more than 6 months as per the circular of MCA). In the given case, minutes of Board Meeting are bounded once in 3 months, so there is no issue with maintenance of minute book.

Question 3.
In the case of death of Chairman of meeting before signing the minute, the Chairman of next meeting can sign minute of meeting held on 15th April 2002.
In a public company where the Articles of Association require presence of six members to constitute the quorum, can the following persons be treated as members for the purpose of constituting the quorum:
1. X, a representative of Governor of a State,
2. Y and Z, preference shareholders,
3. A, representing B Ltd. and
4. P, Q, R and S who were proxies?
Answer:
1. Representative of Governor or President of India is member per¬sonally present and counted within quorum.
2. Preference shareholders are members and counted towards quo¬rum.
3. Representative appointed by body corporate or company is member personally present and counted within quorum.
4. Proxies are not counted within quorum.

Question 4.
Asia Pacific Co. Ltd., called its Annual General Meeting on 30th September 2001 and adjourned it to 31 st December 2001 due to delay in completion of audit of accounts for year ended 31st March 2001. At the adjourned meeting, the meeting was further adjourned to 31st March 2002. Subsequently, the Annual General Meeting was held on 28th January 2002. State whether the company has complied with section 96 and, if not, whether the company is liable to default and conviction.
Answer:
As per section 96, earliest of following date is deadline for holding Annual General Meeting by company:

• within 6 months from end of financial year; or
• within 15 months from the date of earlier Annual General Meeting, whichever is earlier

Accordingly, company should convey its AGM on or before 3 0th September 2001. (Assuming company’s financial year end on 31st March)
Adjourned meeting is nothing but continuous of original meeting. It means, adjourned Annual General Meeting should be concluded on or before 30th September 2001. Here, Annual General Meeting is adjourned twice and concluded on 28th January 2002. It is held beyond the stipulated time period. Company has committed default in this regard.

Question 5.
Abhijeet is a shareholder of Kutumb Ltd. On receipt of notice of an Annual General Meeting to be held on 28th September 2004. Abhijeet issued a proxy in favour of Baljeet on 25th September 2004. Abhijeet again issued another proxy in favour of Charanjeet on 26th September 2004. Both Baljeet and Charanjeet attended the meeting on 28th September 2004. Decide who is entitled to vote on a poll.
Answer:
Abhijeet is entitled to appoint a proxy to attend the Annual General Meeting on his behalf. He appoints Baljeet as proxy on 25th September 2004. He appoints Charanjeet as proxy through another proxy form on 26th September 2004. Meeting is scheduled to be held on 28th September 2004. Proxy appointed later but received by company before 48 hours from the time of meeting is valid. Accordingly, Charanjeet will be entitled to attend meeting.

Question 6.
Distinguish between Extra ordinary General Meeting and Annual General Meeting.
Answer:

Extraordinary General Meeting (EGM)	Annual General Meeting (AGM)
All General Meetings other than Annual General Meeting are EGMs.	AGM is the annual meeting of members where financial statement is approved.
EGM can be called at any time.	AGM can be called only after closing of financial year.
EGM may be called by Board or Board on the requisition or by requisitionists themselves.	AGM may be called by Board.
EGM can be held at any place.	AGM should be held either at registered office of company or within same city or town where registered office of company is situated.
Company can convey any number of EGM in one year. Generally it is called to discuss the business for which company cannot wait till next AGM.	Company can convey one AGM in one year. Following four businesses are ordinarily discussed at AGM: To approve financial statement To declare dividend, if any To appoint or re-appoint director To appoint auditor or ratify ap­pointment of auditor Apart from above four ordinary businesses, any other business can be discussed at AGM.

Question 7.
An Annual General Meeting of Hum Log Ltd., called on 30th December 2004 was adjourned to 31st March 2005, and was held on that date. Next meeting was held in February 2006. Can the company be held liable for not holding any meeting in 2005?
Answer:
As per section 96, company should convey Annual General Meeting every year. In this case, the meeting was adjourned to 31st March 2005, and was held on that date. The next Annual General Meeting was held in February 2006. Adjourned meeting is nothing but continuation of original meeting. Company has conveyed meetings in year 2004 (adjourned in year 2005) and 2006. Company is liable for default as the meeting was not held in 2005.

Question 8.
A proxy was appointed by a member on an instrument duly executed. Will the vote cast by the proxy be valid in the following cases:
I. When the member himself attended and cast his vote at the meeting without revoking the authority of the proxy; and
II. When the member died in the meantime?
Answer:
I. Proxy can vote on poll. When proxy is appointed and member attend meeting and cast his vote, proxy is revoked. But the revocation should be communicated before proxy cast his vote. In the given case, member has not communicated revocation of proxy. Therefore, vote casted by proxy will be valid.
II. Death of member revoke proxy, if company has notice of death of member before meeting commence. In the given case, vote casted by proxy will be valid as company has no knowledge of death of member.

Question 9.
Distinguish between ‘Motion’ and ‘Resolution’.
Answer:

Motion	Resolution
Motion is proposal submitted for discussion at meeting.	Decision taken on motion after discussion is resolution. Resolution is adoption of motion.
Motion must be in writing and signed by the mover.	Resolution need not be in writing. However, resolution is entered into minute book in written form.
Motion is put to vote by Chairman at meeting.	Resolution is result of motion when voting on motion is over and requisite number of members have adopted it.

Question 10.
Amol, a non-member of Shrishti Ltd., has been appointed as a director of the company. Later on, he has become the Chairman of the company.
In an Annual General Meeting of Shrishti Ltd., Amol presided over the meeting. Zahir, a member of the company, objected to his chairmanship on the ground that Amol is not a member of the company. Discuss the validity of the objection.
Answer:
Generally, Chairman of Board preside over all meetings. Articles may permit non-member to become Chairman of General Meeting. In the given case, Amol is Chairman of the Board who can preside as Chairman at every meeting. Hence, objection of Zahir will not hold good.

Question 11.
In a General Meeting of Kutumbh Ltd. only 15 shareholders were present. For a Special Resolution, only 9 out of 15 shareholders voted for the resolution, 2 voted against the Special Resolution and 4 did not vote at all. Poll was demanded and Chairman of the meeting declared the Special Resolution be carried. Examine the validity of the resolution.
Answer:
Special Resolution is said to be passed, if number of votes casted in favour of resolution by members entitled to vote either in person or by proxy are more than 3 times the number of votes if any, casted against the resolution. The votes may be casted either on show of hands or by poll. In the given case, total votes casted on poll are 11 out of 15. The votes in favour of resolution are 9 and votes against resolution are 2. Votes casted in favour of resolution are three times than votes casted against resolution.

Question 12.
Jolly is one of the preference shareholders of Jack & Jill Ltd., a company a registered under the Companies Act, 2013. The Annual General Meeting of the company is scheduled to be held on 8th January 2009. In this context. Jolly wants to exercise his voting rights at the scheduled General Meeting. Can he do so? If so, state whether he can vote every resolution placed before the meeting?
Answer:
As a general rule, preference shareholders are not entitled to vote on every resolution. However, they have right to vote on every resolution at General Meeting if:

• Dividend is not paid for consecutive 2 years, in case of cumulative preference shares; or
• Matter is affecting preference shares.

Question 13.
Articles of Association of a company reserved the powers for calling the Annual General Meeting. The Managing Director of the company, without reference to the Board, called an Annual General Meeting. Is the Annual General Meeting validity called? If not, what should be done to make it valid? Discuss with reference to case law, if any?
Or
Yogesh, the Company Secretary of Bigleap Ltd. convened a General Meeting of the company after discussing the matter with some of the directors even though there was no express approval of the Board for convening such a meeting. Discuss the validity of such a meeting.
Answer:
Any Annual General Meeting can be called only with the authority of Board. Appropriate course of an action is to pass board resolution and authorise CS /MD / Director to issue notice to call Annual General Meeting. If MD/CS/Director calls a meeting without the authority of the Board of directors, it will not be effective unless Board ratifies it. Ratification shall be made before meeting is held. Here, if notice issued is not ratified by Board before Annual General Meeting, notice and meeting will not be considered as valid in eye of law.

Question 14.
‘A new business cannot be dealt at an adjourned meeting without permission of chair’. Do you agree with the statement?
Answer:
Adjourned meeting is nothing but continuation of original meeting. At adjourned meeting only business items left unfinished at original meeting can be transacted. A fresh business can be transacted only when proper notice for a new proposal is given.

Question 15.
Yash, a member of Omar Ltd., appoints Jolly to attend a General Meeting of the company. At the meeting, voting takes place by show of hands. However, Jolly does not know whether he (as a proxy) can vote by show of hands. However, jolly does not know whether he (as a proxy) can vote by show of hands at the meeting. Advice.
Answer:
Proxy cannot vote on show of hands at General Meeting. However, proxy can demand or join in demanding poll and exercise voting right on poll. – Section 105

Question 16.
What is ‘Class meeting’? What are the purposes, provisions and procedure for holding class meeting?
Answer:
Class meetings are held by holders of the particular class of shares e.g., preference shareholders. Generally, class meetings are called to vary the rights of that particular class of shareholders.
When class meeting is held and resolution is passed, it is effective and binding only to the members of that class. Unless Articles provides otherwise, provisions relating to calling of General Meeting and its conduct apply to class meetings in similar manner as they apply to General Meeting.

Question 17.
Distinguish between ‘Postponement’ of meeting and ‘Adjournment’ of meeting.
Answer:

Postponement of meeting	Adjournment of meeting
Postponement of meeting means deferring the holding of meeting to a later date.	Adjournment of meeting means temporary suspension of duly conveyed meeting.
Postpone of meeting can be done by Board or by person convening meeting.	Chairman may adjournment of meeting.
Postponement of meeting means to put an end to meeting.	Adjournment of meeting may be resumed as per provisions of Act or Articles of company.
Postponement of meeting usually take place due to non-compliance of some provisions of Act.	Meeting is adjourn due to lack of quorum or to meet statutory requirement.

Question 18.
Agile Ltd. called its Annual General Meeting on 28th September 2013. The notice of the meeting was posted on 6th September 2013. With reference to the provisions of the Companies Act, 2013, examine whether the notice given by the company was valid.
Answer:
As per section 101, notice of General Meeting should be given 21 clear days in advance. While calculating 21 clear days, the following days are excluded:

• Day of the meeting
• Day of despatch of notice
• 48 hours (Le., 2 days) for service of notice.

Based on above provision, it can be said that company has given 19 clear days notice. Notice is invalid. However, General Meeting may be called by shorter notice, if consent in writing is given by not less than 95Qo of the members entitled to vote at meeting.

Question 19.
Pioneers Ltd. convened a Board meeting on 1st September 2013. During the course of meeting, the date of next Annual General Meeting was discussed but no decision was taken. However, the Company Secretary issued the notice for Annual General Meeting without any specific authorisation from the Board of directors. Decide the validity of notice of Annual General Meeting.
Answer:
Annual General Meeting can be called by proper authority. Proper authority to call Annual General Meeting is Board of Director. Board of director may authorise Company Secretary to fix date of Annual General Meeting and issue notice for calling Annual General Meeting. In absence of such authority, Company Secretary cannot issue notice to call Annual General Meeting. Accordingly, notice of Annual General Meeting issued by Company Secretary without authority is invalid.

Question 20.
Minutes of the company can be maintained in loose leaf form. Comment.
Answer:
The minute book must be a bound book. However, maintaining minute book in loose leaf is permitted but in such circumstances company must get it bounded at interval of reasonable time (ie., not more than 6 months as per the circular of MCA).

Question 21.
PQR Ltd. is an unlisted company and has 400 shareholders in all. The shareholders of the company propose voting by electronic mode. Chairman of the company rejected the shareholders’ proposal. Explaining the provisions of the Companies Act, 2013, examine the validity of rejection of the shareholders’ proposal by the Chairman.
Answer:
Every listed company or company having more than 500 shareholders may provide facility of electronic voting at General Meeting. In the given question, number of total shareholders are 400 (ie., less than 500) and therefore Chairman can reject the shareholders’ proposal of voting by electronic mode.

Question 22.
DEF Ltd., a company listed at Bombay Stock Exchange, failed to file its report on the Annual General Meeting for the financial year ended 31st March, 2013 with the Registrar of Companies, Mumbai. The company further abstained from filing the said report for another two years, viz. financial years ended 31st March 2014 and 2015 respectively.
Examining the provisions of the Companies Act, 2013, state whether the default committed by the company amounts to an offence. If so, to what extent it is possible to get the offence(s) compounded.
Answer:
If listed company fails to file report on Annual General Meeting within 30 days from the conclusion of meeting. If company could not hie report within 30 days, still it can hie within next 270 days with additional fees specified under section 403. If company fails to hie report on Annual General Meeting, company and officer in default is liable to pay fine. Hence, it is possible to compound offence.

Question 23.
Sahara Limited issued a notice for holding of its Annual General Meeting on 7th November 2014. The notice was posted to the members on 16.10.2014. Some members of the company allege that the company had not complied with the provisions of the Companies Act, 2013 with regard to the period of notice and as such the meeting was not validly called. Referring to the provisions of the Act, decide – (i) Whether the meeting has been validly called? (ii) If there is a shortfall in the number of days by which the notice falls short of the statutory requirement, state and explain by how many days does the notice fall short of the statutory requirement? (iii) Can the shortfall, if any, be condoned?
Answer:
Notice of Annual General Meeting should be given 21 clear days in advance from day of Annual General Meeting. In this case, notice was posted on 16-10-2014 for meeting scheduled to be held on 7-11-2014. While counting clear days, following days are excluded:

• Day of holding the AGM (Le., 7th November, 2014)
• Day of despatch of notice (16th October, 2014)
• 2 days for service of notice (Le., 17th and 18th October, 2014)

Accordingly, notice is given by company 19 days in advance. Notice is short for 2 days. The shortfall may be condoned, if consent is given for such shorter notice by at least 95% of the members entitled to vote at ‘ such Annual General Meeting.

Question 24.
XYZ Limited called its Annual General Meeting on 28th September 2014. The notice of the meeting was posted on 6th September 2014. With reference to the provisions of the Companies Act, 2013 examine whether the notice given by the company was valid.
Answer:
Notice of Annual General Meeting should be given 21 clear days in advance from day of Annual General Meeting. In this case, notice was posted on 6-9-2014 for meeting scheduled to be held on 28-9-2014. While counting clear days, following days are excluded:

• Day of holding the AGM (ie., 28th September, 2014)
• Day of dispatch of notice (6th September, 2014)
• 2 days for service of notice (ie., 7th and 8th September, 2014)

Accordingly, notice is given by company 19 days in advance. Notice is short for 2 days. The shortfall may be condoned, if consent is given for such shorter notice by at least 95% of the members entitled to vote at such Annual General Meeting.

Question 25.
ABC Limited served a notice of a General Meeting upon its members. The notice stated that a resolution to increase the share capital of the company would be considered at the meeting. A member complains to the company that the amount of the proposed increase was not specified in the notice. In the light of the provisions of the Companies Act, 2013 examine the validity of the notice.
Answer:
Increase in share capital is an item of special business. For every item of special business, material facts must be disclosed in explanatory statement. Disclosure of material facts in notice containing special business is mandatory. Explanatory statement or disclosure of material fact should enable the members to understand the meaning, scope and implication of the item of business and to take decision thereon.
In the above case, notice is not valid. Notice does not contain proposed increase in share capital.

Question 26.
M.H. Company Limited served a notice of General Meeting upon its shareholders. The notice stated that the issue of sweat equity shares would be considered at such meeting. Mr. A, a shareholder of the M.H. Company Limited Complains that the issue of sweat equity shares was not specified fully in the notice. Is the notice issued by M.H. Company Limited regarding issue of sweat equity shares valid according to the provisions of the Companies Act, 2013? Explain fully.
Answer:
Issue of sweat equity shares is an item of special business. For every item of special business, material facts must be disclosed in explanatory statement. Following material facts should be disclosed:

• Number of shares
• Current market price
• Consideration
• The class of directors or employees to whom such equity shares shall be issued.

In the above case, notice is not valid. Notice should contain explanatory statement or material facts with respect to special business.

Question 27.
The Articles of Association of X Ltd. require the personal presence of 7 members to constitute quorum of General Meetings. The following persons were present in the Extra-ordinary General Meeting to consider the appointment of Managing Director:
(i) A, the representative of Governor of Madhya Pradesh.
(ii) B and C. shareholders of preference shares,
(iii) D, representing Y Ltd. and Z Ltd.
(iv) E, F, G and H as proxies of shareholders.
Can it be said that the quorum was present in the meeting?
Answer:
Articles of company may provide higher quorum. In the given case, Articles has fixed 7 as quorum. Following persons are counted within meaning of quorum:

• Mr. A, as he is representative of the Governor of Madhya Pradesh.
• Mr. B & C, as they are members personally present.
• Mr. D is treated as two members personally present as he is appointed as authorised representative by two companies.

From the above discussion, it can be said that only 5 members are counted towards quorum. Quorum as required by articles is not present.

Question 28.
DJA Company Ltd. has only 50 preference shareholders. A meeting of the preference shareholders was called by the company for amending the terms of these shares. Mr. A, was the only preference shareholder who attended the meeting. He, however, held proxies from all other shareholders. He took the Chair, conducted the meeting and passed a resolution for amending the terms of the issue of these shares. Referring to the provisions of the Companies Act, examine the validity of the meeting and the resolution passed thereat.
Answer:
It was held in case of Sharp vs. Dawes, that one member cannot constitute quorum even if he is holding proxies for all other members. Here, meeting was held without quorum and therefore, meeting and resolutions passed thereat are not valid.

Question 29.
The quorum for a General Meeting of a public company is 15 members personally present according to the provisions of the Articles of Association of the company. Examine with reference to the provisions of the Companies Act, 2013, whether there is proper quorum at a General Meeting of the company which was attended by the following persons:
(i) 13 members personally present
(ii) 2 members represented by proxies who are not members of the company
(iii) One person representing two member companies.
Answer:
The Articles of company may provide higher quorum. In the given case, 13 members personally present will be counted towards quorum. Further, one person representing two member companies is counted as two members personally present. Therefore, total members personally present are 15. Quorum is present.

Question 30.
State the legal position in the following circumstances with reference to the provisions in the Companies Act, 2013:
At an adjourned Extraordinary General Meeting of a Public Ltd. Company adjourned for want of quorum, only 3 members are personally present.
Answer:
If an EGM is adjourned for want of quorum, and the required quorum is again not present, then, members present (not being less than two) shall be quorum. Meeting held with 3 members personally present is valid meeting.

Question 31.
The Board of Directors of ABC Limited called an Extra-ordinary General Meeting of the company to transact certain urgent matters. The meeting could not be held for want of requisite quorum. As a result, the meeting was adjourned to next week. Again, at the adjourned meeting also the requisite quorum was not present. Members present at this meeting held the meeting and passed certain resolutions.
With reference to provisions of Companies Act, examine the validity of the meeting and state whether resolutions passed at such meeting shall be binding upon the company and its members.
Answer:
If an EGM is adjourned for want of quorum, and the required quorum is again not present, then, members present (not being less than two) shall be quorum. Therefore, resolution passed at the EGM are valid and binding.

Question 32.
A, a shareholder, of a company, appointed B, as a proxy, to attend the General Meeting of the shareholders. Later on. A, himself, attended the meeting and voted on a resolution. Decide, whether A can do so?
Answer:
When member after appointing proxy attend meeting and vote before proxy vote, proxy is revoked. Member has right to attend meeting and vote even after appointment of proxy. A can do so.

Question 33.
The Chairman of the meeting of a company received a proxy 54 hours before the time fixed for the start of the meeting. He refused to accept the proxy on the ground that the Articles of the company provided that a proxy must be filed 60 hours before the start of the meeting. Decide, under the provisions of the Companies Act, whether the proxy holder can compel the Chairman to admit the proxy?
Answer:
Proxy form should be deposited with company at any time before 48 hours from the time fixed for commencement of meeting. – Section 105
This time can be reduced but cannot be increased by Articles. Therefore, refusal by the Chairman is not valid.

Question 34.
Annual General Meeting of MGR Limited is convened on 28th December 2013. Mr. J, who is a member of the company, approaches the company on 28th December 2013 and demands inspection of proxies lodged with the company. Explain the legal position as referred under the Companies Act, 2013 in this regard.
Answer:
Member can inspect proxy form if he has given notice to this effect at least 3 days before commencement of General Meeting. In the given case, Mr. J is not entitled to inspect proxy form as he has approached company for inspection of proxy form on day of meeting.

Question 35.
The Articles of ABC Limited provided that only those shareholders would be entitled to vote whose names have been there on the Register of Members for two months before the date of the meeting. X, a member, of the ABC Limited was holding 200 equity shares of the company. X transferred his shares to Y before one month from the date on which the meeting was due. The name of Y could not be entered in the Register of Members as the application of transfer of shares was pending. X attended the meeting but he was prohibited by the company from exercising his voting right on the ground that he has not hold his shares for specified period as provided in the Articles before the date of the meeting. State whether X can exercise his voting right in the meeting? State also the grounds upon which X may be excluded from exercising his voting rights in the meeting of the shareholders.
Answer:
As per section 106, company can restrict voting right of member in the following two situations:

• Non-payment of call money
• Company has exercised right of lien

Company cannot restrict voting right of member other than grounds specified above. Therefore, restriction by company on voting right on the ground that a member has not held his shares for two months is not valid ground. X can exercise his voting right in the meeting.

Question 36.
At a General Meeting of a company, a matter was to be passed by a Special Resolution. Out of 40 members present, 20 voted in favour of the resolution. 5 voted against it and 5 votes were found invalid. The remaining 10 members abstained from voting. The Chairman of the meeting declared the resolution as passed. With reference to the provisions of the Companies „ Act, 2013 examine the validity of the Chairman’s declaration.
Answer:
Members abstain from voting and invalid votes or cancel votes are ignored.
In the given case, votes casted in favour of resolution are 3 times more than votes casted against resolution, special resolution is passed, (out of total 25 votes, 20 votes are in favour of resolution) Resolution is valid.

Question 37.
For a Special Resolution in a company’s General Meeting. 10 voted in favour, 2 against and 4 abstained. The Chairman declared the resolution as passed. Is it a valid resolution as per the provisions of the Companies Act, 2013?
Answer:
Members abstain from voting are ignored. In the given case, votes casted in favour of resolution are 3 times more than votes casted against resolution, special resolution is passed, (out of total 12 votes, 10 votes are in favour of resolution) Resolution is valid.

Question 38.
Developers Ltd. held a General Meeting of shareholders for passing a Special Resolution regarding alteration of Articles of Association. Out of the members present in the meeting 20 voted in favour, 4 against and 8 members did not vote and abstained from voting. The Chairman of the meeting declared the resolution as passed. Is it a valid resolution as per the provisions of the Companies Act, 2013?
Answer:
Members abstain from voting are ignored. In the given case, votes casted in favour of resolution are 3 times more than votes casted against resolution, Special Resolution is passed, (out of total 24 votes, 20 votes are in favour of resolution) Resolution is valid.

Question 39.
As a corporate professional advise your client company whether the following matters can be transacted by getting a resolution passed through postal ballot:
I. Issue of shares with differential voting rights
II. Sale of whole of the undertaking of the company
III. Buy-back of shares by the company (more than 10% of its paid up capital and free reserve)
Answer:
Yes. Postal ballot is not applicable to OPC or where number of members of the company is upto 200.

Past Examination Questions

Question 1.
In what way does the Companies Act, 2013 regulate the holding of an Annual General Meeting by a Public limited Company? Explain (CA November 2002)
Or
Explain the provisions of the Companies Act, 2013 relating to holding of Annual General Meeting of the Company? (CA November 2003)
Answer:

Question 2.
Explain the provisions of the Companies Act, 2013 relating to the procedure to be followed for transacting business of the General Meeting of members of a company through postal ballot. (CA November 2003)
Or
State the procedure for passing a resolution by postal ballot. (CA May 2005)
Or
SV Technologies Limited is proposing to convene a General Meeting of its members. Explain briefly the provision of the Companies Act, 2013 relating to the procedure to be followed for transacting business of the General Meeting through ‘postal ballot’. (CA November 2016)
Answer:

Question 3.
M/s Low Esteem Infotech Ltd. was incorporated on 1.4.2014. No General Meeting of the company has been held so far. Explain the provisions of the Companies Act, 2013 regarding the time limit for holding the first Annual General Meeting of the Company and the power of the Registrar to grant extension of time for the First Annual General Meeting. (CA November 2004)
Answer:
First AGM shall be held within 9 months from the end of the first financial year (ie. on or before 31-12-2015) ROC cannot grant extension for first AGM.

Question 4.
State the provisions of the Companies Act regarding calling and holding an Extraordinary General Meeting with respect to:
(I) Number of members entitled to requisition a meeting.
(II) Power of the Tribunal to order meeting to be called under section 98. (CA May 2005)
Answer:

Question 5.
The minutes of the meeting must contain fair and correct summary of the proceedings thereat. Can the Chairman direct exclusion of any matter from the minutes? Some of the shareholders insist on inclusion of certain matters which are regarded as defamatory of a director of the company. The Chairman declines to do so. State how the matter can be resolved. (CA May 2005)
Or
In a General Meeting of PQR Limited the Chairman directed to exclude „ certain matters detrimental to the interest of the company from the minutes. M, a shareholder contended that the minutes of the meeting must contain fair and correct summary of the proceedings under the provisions of the Companies Act, 2013. (CA November 2010, May 2017)
Answer:
As per section 193, Chairman can exclude following matters, which in his opinion:

• Is defamatory to any person; or
• Is Irrelevant or immaterial; or
• Is detrimental to the interest of company

Chairman can do so. He has discretionary power to exclude any defamatory matter from minute of General Meeting.

Question 6.
State what is meant by ‘Quorum’ and when does quorum be considered immaterial under the provisions of the Companies Act, 2013. (CA May 2005)
Answer:

Question 7.
State the procedure for inspection of minutes Book of General Meetings of a company by the members. (CA November 2005)
Answer:

Question 8.
To remove Managing Director, 49% members of A Ltd. submitted a requisition for holding of an Extraordinary General Meeting. The company failed to call the said meeting and hence the requisitionists held meeting. Since Managing Director did not allow the holding of meeting at a registered office of the company, the said meeting was held at some other place and a resolution for removal of the Managing Director was passed. Examine validity of the said meeting and resolution passed therein in the light of the Companies Act, 2013. (CA May 2006, 2013)
Answer:
Specified number of members can requisite to call EGM for any purpose.
Companies Act, 2013 does not prescribe any specific purpose for which EGM can be called by members. If valid requisition is made, company shall call EGM within 3 months. If company fails to call EGM on requisition, requisitionists themselves issue notice and convey meeting at the registered office of company. If registered office is not made available, meeting can be held at any other place. In view of above discussion, it can be suggested that resolution passed at such meeting will be valid.

Question 9.
Explain the provisions of the Companies Act, 2013 relating to ‘Resolutions requiring Special Notice.’ State the resolutions that require ‘Special Notice’ under the Act. (CA November 2006, May 2016, 2017)
Answer:

Question 10.
Who are entitled to get notice for the General Meeting called by a public limited Company registered under the Companies Act, 2013? Does the non-receipt of the notice of the meeting by any one entitled to such notice invalidate the meeting and the resolution passed there in? What would be your answer in case the omission to give notice to a member is only accidental omission? (CA November 2006)
Or
Who are the persons entitled to receive notice of a General Meeting of a company registered under the Companies Act, 2013? Shall the non-receipt of notice of the General Meeting by any member invalidate the proceedings of the meeting? Explain. (CA May 2007)
Answer:

Question 11.
XYZ Limited held its Annual General Meeting on September 15 2006. The meeting was presided over by Mr. V, the Chairman of the Company’s Board of Directors. On September 17 2006, Mr. V, the Chairman, without signing the minutes of the meeting, left India to look after his father who fell sick in London. Referring to the provisions of the Companies Act, 2013, state the manner in which the minutes of the above meeting are to be signed in the absence of Mr. V and by whom. (CA May 2007)
Answer:
Minute of Annual General Meeting held on 15 September 2006 should be signed on or before 15 October 2006 by Chairman of same meeting. In case of death or inability of the Chairman of same meeting to sign minute, it should be signed by director authorised by Board in this behalf.

Question 12.
Examine the validity of the following with reference to the relevant provisions of the Companies Act, 2013:
I. The Board of Directors of a company refuse to convene the Extraordinary General Meeting of the members on the ground that the requisitionists have not given reasons for the resolution proposed to be passed at the meeting.
II. The Board of Directors refuse to convene the Extraordinary General Meeting on the ground that the requisitions have not been signed by the joint holder of the shares.
III. Adjournment of Extraordinary General Meeting called upon the requisition of members on the ground that the quorum was not present at the meeting. (CA November 2007)
Answer:
I. As per section 100, requisitionists must state the purpose or object of calling meeting. Matter for consideration should be stated. Therefore, refusal on part of company is valid. – LIC of India vs. Escort Ltd.
II. When two or more than two persons hold shares jointly, a requisition or notice calling meeting signed by any one of them under section 100 shall be valid. Here, Board shall not refuse to call EGM for this reason provided all other conditions for requisition all complied with.
III. If requisitioned meeting is adjourned for want of quorum, it stands dissolved. Action by Board is valid. – Section 103

Question 13.
What is the concept of proxy in relation to the meetings of a Company? Decide the appointment and rights of a proxy, under the companies Act, 2013, in the following cases:
(i) When a body corporate is a member in the company.
(ii) When a foreign company is a member in the company. (CA November 2007)
Answer:
Company or body corporate is entitled to appoint authorised representative or proxy to attend General Meeting. Appointment should be made by passing Board Resolution. When authorised representative is appointed he is entitled to exercise the same rights and powers on behalf of such body corporate, as if it were an individual member. He can appoint proxy. – Section 113. Provisions of section 113 are equally applicable to foreign company.

Question 14.
Board of directors of ABC limited want to transact the following matters at the forthcoming Annual General Meeting of the company:
(I) Approval of financial statements- balance sheet and profit and loss account.
(II) Declaration of dividend
(III) Election of directors
(IV) Appointment of Auditors
(V) Setting up a subsidiary company in UK in collaboration with a company incorporated thereat.
You are directed by the Board of directors to classify the above matters into ordinary and special business to be transacted at the above meeting and state the types of resolution required to be passed for transacting the above matters. (CA June 2013)
Or
Which matters are considered to be ‘ordinary’ matters at the Annual General Meeting of a company? What kind of resolution is required to be passed for ‘ordinary business’ and for ‘special business’ in an Annual General Meeting under the Companies Act, 2013? (CA May 2014)
Or
State the ordinary business which may be transacted at an Annual General Meeting of a public limited company incorporated under the Companies Act, 2013. (CA May 2012)
Answer:

Question 15.
Mr. DP Secretary, of City Handicrafts Ltd. called an Extraordinary General Meeting of the company on the requisition of some members. Mr. DP, Secretary of the company, issued notice of the meeting without the authority of the Board of Directors Discuss on the validity of the notice issued by Mr. DP, Secretary of the City Handicrafts Ltd. (CA November 2012)
Answer:
Secretary is not authorised to call meeting. However, Board may ratify notice.

Question 16.
K, a member of MNO Limited appoints L as his proxy to attend the General Meeting of the company. Later he (K) also attends the meeting Both K (the member) and L (the proxy) vote on a particulars resolution in the meeting K’s vote was declared invalid by the Chairman starting that since he has appointed the proxy and L’s vote has been considered as valid. K objects to decision of the Chairman. Decide, under the provision of the Companies Act, 2013 whether K’s objections shall be tenable. (CA November 2013)
Answer:
When member after appointing proxy attend meeting, proxy is revoked and L has no right to vote. Therefore, K’s objection is valid. Chairman has erroneously considered L’s vote.

Question 17.
The Annual General Meeting of KMP Limited was held on 30th April 2015. The Articles of Association of the company is silent regarding the quorum of the General Meeting. Only 10 members were personally present in the above meeting, out of the total 2,750 members of the company. The Chairman adjourned the meeting for want of quorum. Referring to the provisions of the Companies Act, 2013, examine the validity of Chairman’s decision. (CA May 2015)
Answer:
As per section 103, quorum is 15 members personally present in case of public company having total number of members of the company exceeds 1,000 but does not exceed 5,000.
If quorum as stated above is not present, the Annual General Meeting shall automatically adjourn to the same day, time and place in the next week or to such other date, time and place as Board may determine. If quorum not present in half an hour, meeting will adjourn automatically.

Question 18.
J held 100 partly paid up shares of LKM Limited. The company asked him to pay the final call money on the shares. Due to some unavoidable circumstances he was unable to pay the amount of call money to the company. At a General Meeting of the shareholders, the Chairman disallowed him to cast his vote on the ground that the Articles do not permit a shareholder to vote if he has not paid the calls on the shares held by him. J contested the decision of the Chairman. Referring to the provisions of the Companies Act, 2013 decide whether the contention of J is valid. (CA May 2015)
Answer:
Articles of company prohibits voting right on the ground of non-payment of call money is valid. The contention of Mr. J is not valid.

Question 19.
Explain the concept of electronic voting system as provided by Companies ‘ Act, 2013. (CA May 2015)
Answer:

Question 20.
State, giving reasons, whether the following statement is correct or incorrect: Quorum for General Meetings for a public company, where members are not more than 1000, is 5 members personally present. (CA May 2016)
Answer:
Statement is correct. In case of public company, five members personally present if the total number of members as on date of meeting is not than 1000, shall be quorum.

Question 21.
A General Meeting was scheduled to be held on 15th April, 2016 at 4:00 P.M. As per the notice the members who are unable to attend the meeting in person can appoint a proxy and the proxy forms duly filled should be sent to the company so as to reach at least 48 hours before the meeting. Mr. X, a member of the company appoints Mr. Y as his proxy and the proxy from dated 19-04-2016 was deposited by Mr. Y with the company at its registered office on 11-04-2016. However, Mr. X changes his mind and on 12-04-2016 gives another member Mr. W also gives two separate proxies to two individuals named Mr. M and Mr. N. In the case of Mr. M, the proxy dated was deposited with the company on the same day and the proxy form in favour of Mr. N was deposited on 14-04-2016. All the proxies viz. Y, Z M and N were present before the meeting. According to the provisions of the Companies Act, 2013, who would be the persons allowed to represent at proxies for members X and W respectively? (CA May 2017)
Answer:
Proxy appointed later but received by company before 48 hours from commencement of meeting is valid proxy. In the given case, proxy should be deposited on or before 13.04.2016. In the first case, Mr. X appointed proxy in favour of Mr. Y and Mr. Z. Proxy appointed later and deposited with company within stipulated time is valid and prevailing. Hence, proxy appointed in favour of Mr. Z is valid.
In the case of Mr. W, proxy appointed in favour of Mr. N was appointed later and deposited within stipulated time will be valid.