12 CONVENING & CONDUCT OF SHAREHOLDERS

MEETINGS
Q.1. What are the different kinds of
Ans. Meetings of shareholders of a
Meetings of shareholders? Explain.
()General Meetings company are of two types:
(i) Class Meetings.
General Meetings are those in which
participate. General Meetings of shareholders are shareholders
of a company
of two types:
-Annual General Meeting, and
- Extraordinary General Meeting,.
(i) Class Meetings. In such Meetings, it is only a
particular class of
chareholders who participate. Such Meetings of different classes of shareholders
are convened and held only if matters affecting these shareholders are to be
discussed and decided. As such, a Class Meeting is intended to be attended by
members or shareholders of the class for which it is called. In such a Meeting,
matters affecting or concerning that particular class only are discussed. Such
Class Meetings are at times necessary, otherwise all types of shareholders
attending such a Meeting may confuse or even complicate matters to be
discussed.
Q. 2. Explain the provisions of the Companies Act with regard to holding of
an Annual General Meeting by a company.
Ans. Annual General Meeting (AGM). It is the most important meeting of the
members (shareholders) of a company. This meeting is held every year to review
the progress of the company.
Importance of Annual General Meeting. The Annual General Meeting is an
important protection to the members for it is one occasion when they can be sure
of having an opportunity of meeting the Directors and questioning them on the
accounts, and on their report on thecompany's position and prospectus.
"t isat this Meeting that some of the Directors willretire and come up for re-election
and the shareholders willbe able to exercise real control by "refusing to re-elect a Director
twhose action and policy they disapprove" -Green LJ in Shaw and Sons (Salford)
Ltd. vs. Shaw.
Provisions regardingAnnual General Meeting:
1. Which companies are required to hold AGM. Section 96(1) provides that
every company other than aOne Person Company shall, in each year, hold, in
aition to any other meetings, a generalmeeting as its annual general meeting.
nis Section further provides that the company shall specify the meeting as such
in the notice
calling it.
. First AGM. The first AGM shall be held within a period of9 months from
ie date of closing of the first financial year of the company.
he company holds its first AGM as aforesaid, it shall not be necessary for the
company to hold any AGM in the year of its incorporation.
99
 100 SHIV DAS DBLHI UNIVERSITY SERIES

3. Subsequent AGM. There must be one AGM in each calendar

months. This time may be extended for a maximum

should
maximum time period between anytwo such AGMs months
of 3
not
beby
moryeare th. an Th1;e
the
if there are some special
reasons.
The AGM must be held within a period of 6 nonths from the date of Regjsta
the financial year or within 9 nonths where time has been extended by 3
by the Registrar. If AGM of a company is adjourned to asubsequent month
chosing
adjourned meeting is deemed to be the çontinuation of the earlier date,
meeting Thethe
adjourned meeting must also be held within 15 months of the previous
4. Power to convene an AGM. The Board of Directors is the proper meeting,
Convene an AGM.
5. Place of AGM. An AGM must be held either at the registered office of a
authority
company or at some other place within the city, town or village in which
registered office of the company is situated.
6. Time and day of the AGM. AGM must be held during business hoursi.
between 9 am to 6 p.m. and also on a working day. It cannot be held om.
National holiday. Provided that AGM of an unlisted company may be held
any place in India, if consent is given in writing or electronic mode, by allthe
members in advance.
7. Notice of the meeting. An Annual General Meeting can be called by givin
at least 21 days clear notice either in writing or through electronic mode in su
manner as may be prescribed.
The notice of the Annual General Meeting must be accompanied by a copy o
the audited Financial Statement for the previous financial year, the Annua
Report of the Directors and the Auditor's Report.
Every notice of a meeting shall specify the date, place, day and the hour of the
meeting and shall contain a statement of the business to be transacted at such
meeting.
The notice of every meeting of the company shall be given to
(a) every member of the company, legal representative of any deceasei
member or the assignee of an insolvent member;
(b) the auditor or auditors of the company; and
(c) every director of the company.
Any accidental omission to give notice to, or the non-receipt of such notce
any member or other person who is entitled to such notice for any meeting Sna
not invalidate the proceedings of the meeting.
8. Business transacted at the meeting. The business to be
AGM may comprise:
transacted at o
I. Ordinary Business. It relates to the
following matters:
(a) consideration of financial statemnents and the reports of the Boardo
Directors and auditors;
(b) the declaration of dividend;
(c) the appointmentof directors in place of those
(d) the appointment of auditors and fixation of retiring; and
II. Special Business. Any other business, other their
than remuneration.
ordinary busines
scheduled to be transacted at the meeting is known as special busines
Examples of special business to be conducted at an Annual Gener?
 CHAPTER 12: CONVENING & CONDUCT OF SHAREHOLDERS' MEETINGS 101

Meeting are: Change in the

Memorandum of Association and Articles of
Association, Buy-back of shares etc.
of TTribunal to call AGM. If default is made in holding an Annual
9. Power on the
General Meeting in accordance with Section 96, the Tribunal may,
application of any member of the company, call or direct the calling of the
Annual General Meeting ofthe company and give such directions as the
Tribunal
thinksexpedient in relation to the calling, holding and conducting of the meeting.
held shall be deemed to be the Annual General Meeting
Ageneral meeting so
of the company.
0 Penalty for default in holding AGM. If default is made in holding a meeting
ofthe company in accordance with Section 96, or in complyingwhowith any directions
is in default, shall
ofthe Tribunal, company and every officer of the Company
be punishable with fine which may extend to 1 lakh and in the case of a
enntinuing default, with a further fine which may extend to 5000 for every day
aker the first during which such default continues.
o.3. Write a note on Extraordinary General Meeting.
Ans. Meaning of Extraordinary General Meeting (EGM), All general meetings
other than the annual general mneeting are called extraordinary general meetings.
These meetings are convened to transact the business which caninot bethepostponed
Articles
Hll the next AGM, e.g., alteration in the Memorandum. Alteration in
etc. All business transacted at such meeting is called special business.
Who may call an Extraordinary General Meeting. Extraordinary general
meeting may be called:
(a) By the Board of Directors. The Board of Directors, may, whenever it
thinks fit, convene an extraordinary general meeting by passing a
resolution to that effect in the Board's meeting.
Members. The Board of
(b) By the Board of Directors on Requisition of the
Directors must call an extraordinary general meeting on the written
total voting
requisition of the members holding at least 1/10th of the matter. The
power and who have a right to vote in respect of the to be
requisition must state the matters to be considered in the meeting
called. It must be signed by the requisitiorists and deposited at the
requisition, the
registered office of the company. Within 21 days of theactually be held
directors must proceed to call the meeting which must
within 45 days from the date of requisition.
(c) By the Requisitionists. If the Board of Directors fails to call the meeting
may
within above mentioned time limit, the requisitionists themselves
The
call the meeting within 3 months of the date of requisition.
reasonable expenses incurred by the requisitionists for holding such a
turn,
meeting can be recovered by them from the company which,at in
directors fault.
shall recover the same from the remuneration of the
(a) By the Tribunal. The Tribunal can also order an extraordinary general
meeting to be called, held or conducted, if for any reason it is not
practicable to call or hold such a Meeting. The Tribunal may pass order
for callingsuch a Meeting on its own initiative or on the application of
any Director or any members entitled to vote at the Meeting.
 102 SHIV DAS DELHI UNIVERSITY SERIES
An EGM can be convened on a National holiday and at a place other than the
registered office of the company or the city in which the registered office is
situated.
Q 4. Explain 'ordinary business' and 'special business' which may be
transacted in a general meeting of a company. State alsothe meetings in which
such business may be transacted.
Ans. Ordinary Business. It relates to the following matters:
(a) consideration of financial statements and the reports of the Board of
Directors and auditors;
(b) the declaration of dividend;
(() the appointment of directors in place of those retiring and
remuneration.
(d) the appointmnent of auditors and fixation of their
Special Business. Any other business, other than ordinary business, scheduled
to be transacted at the meeting is known as special business. Examples of special
business to be conducted at an Annual General Meeting are: Change in the
Memorandum of Association and Articles of Association, Buy-back of shares etc.
Generally,ordinary business requires the passing of an ordinary resolution and
special business a special resolution. There are certain items of business which
require an ordinary resolution e.g., alteration of Share capital, lssue of Bonus
shares etc.
Ordinary business may be transacted only in the Annual General Meeting
whereas special business may be transacted in Annual General Meeting as well
as Extraordinary General Meeting.
Q. 5.What are the requisites of a valid Meeting? Explain.
Ans. Any Meeting to be called a valid meeting has to fulfil the following
requirements:
1. It must be duly convened by the proper authority.
2. Proper notice must be given to all those who are entitled to receive it.
3. Quoum must be present.
4. The chairman must preside.
5. Proper minutes of the proceedings should be kept.
1. Proper Authority. For General Meetings of the
Board of Directors is the proper authority to convenecompany's such
shareholders, the
Board of Directors has to pass a Resolution at its Meetings. For this, te
shareholders can be Annual General Meeting, Extraordinary meeting. Such a meetingor u
even any Class Meeting of General Meeting
such meetings may be called by orshareholders of the company. In certain cases, e
or by the National Company Law requisitioned by the shareholders themselve
2. Notice. The notice of Tribunal.
every
(a) every member of the meeting of the company shall be given deceased to
member or the company, legal representative of any
(b) the auditor or assigneeofof an insolvent member;
auditors the company; and
(c) every director of the
For General Meeting of the
advance. While calculating 21
company.
members, notice has to be given at least 21 dayt
meeting are not included. In case days,
thethenotice
dateisofsent
the by
issue
post,and2 the tor of
days date the
pOstal
 CHAPTER 12: CONVENING & CONDUCT OF SHAREHOLDERS' MEETINGS 103

transitare oNcluded. Therefore, the notice of a general meeting should be sent 25

beforethe date of the meeting if
days the notice is sent by post. The notice should
containthe agenda of the mneeting which means a list of all the items to be
discussedinthe meeting. The notice must specify the place, time and purpose
themeeting.
The meeting may be held even witha shorter notice if it is so aggreed by at
least95%of the memnbers entitled to vote in such meeting.
Deliberate omission to give notice to any member can render the meeting
invalid. An accidental omission to give notice to or non-receipt of it by any
individual member will not affect the meeting's validity. The notice must contain
statement about the business to be transacted at the meeting clearly dividing
a
business into Ordinary Business and Special Business. The notice may be sent
the member
a
by post or by courier or by such electronic or other mode as may be
to
prescribed.
present
3. Quorum. It means the minimum number of members required to be
then the
the meeting. If this minimum number of members is not present, it. Generally, it
be transacted at
meeting is held to be invalid and no business can wherein of the
Association of the company the requirement
Ísthe Articles of whether it is a Board Meeting
Ouorum is specified regarding various meetings
members.
or General Meeting of the at the beginning of the meeting. It need not
Quorum is required to be present
throughout or at the time of taking votes on any resolution. A quorum
he present of Board's Meetings.
must be present throughout in the casecontains provisions relating to the number of
Section 103 of the Companies Act for a meeting of the company.
members which would constitute quorum of the company provide for a larger
Articles
As per Section 103, unless, the
number
company
(a) in case of a publicpersonally number of members as on the
present if the
()five nembers more than one thousand;
meeting is not
date of
personally present if the number of members as on
(ii)fifteen members more than one thousand but less than or equal
the date of meeting is
on
the number of members as
to five thousand;
personally present if
(iii) thirty members
meeting is more than five thousand; shall
the date of
company, two memberS personally present
private
(0) in the case of a meeting of the company.
torm the quorum for a within half-an-hour from the time
not present
f the quorum is the meeting of the company next
appointed forholding adjourned to the same day in the such
shall stand other date and
() the nmeetingsame time and place, or to such
week at the or
place as the Board may determine; cancelled.
other time and
by the requisitionists shall stand place of
if called day,time or
(ii) the meeting,
adjourned meeting or of a change of3 days notice to the
In case of an company shall give not less than advertisement in the
meeting, the individually or by publishing an
members either
 104 SHIV DAS DELHI UNIVERSITY SERIES
vernacular
newspapers (one in English and one in language)
circulation at the place where the registered office of
situated.
" If at the adjourned meeting also, a quorum
the
is not
wh ich
company
present
is'inis
half-an-hour from the time appointed for holding
members present shall be the quorum.
the meeting,witthhein
Can one person constitute a quorum?
Ordinarily one person present in the meeting can not form a quorum.
Under the following circumstances, even one person present may form th.
quorum for a general meeting.
() When the Tribunal calls or directs the calling of an Annual Gen.
Meeting, it may give directionto the company that one member present
in personor by proxy shallbe deemed to constitute a meeting.
(i) In case of class meetings, if all the shares ofa particular class are heldby
one person, he shall constitute the quorum.
(iti) If there is only one creditor or debentureholder, he shall constitute
quorum for the creditors'/debentureholders' meeting.
4. Chairman of the Meeting [Section 104]. The successful conduct of any
meeting is largely dependent upon the personality of the Chairman. He acts as
the Presiding Officer of the company's meeting. It is the Chairman who is
responsible for maintaining order and also conducting the meeting. He puts
motions before the meeting, counts the votes, announces the results and also
certifies the records (minutes) of the meeting by putting his signatures.
Unless the Articles of the company provide otherwise, the members personaly
present at the meeting shall elect one of themselves to be the Chairman thereof on
the show of hands.
If a poll is demanded on the election of the Chairman, it shall be taken in
accordance with the provisions of this Act and the Chairman elected on a show of
hands shall continue to be the Chairman of the meeting until some other person
is elected as Chairman as a result of the poll, and such other person shall be the
Chairman for the rest of the meeting.
Section 104 leaves the appointment of the Chairman to be regulated by the
Articles of the company. The provisions of this Section would be applicable only
if the Articles do not otherwise provide. The Articles generally
contain provision
on the lines of Regulations 45 to 47 contained in Table F of Schedule I. Thes
Regulations are as follows:
Regulation 45. The Chairman, if any,of the Board shall preside as Chairman
every general meeting of the company.
Regulation 46. If there is no such Chairman, or if he is not present within
fifteen minutes after the time appointed for holding the meeting or is unwilling
to act as the Chairman of the
meeting, the elect one of the
directors present to be the Chairman of thedirectors present shall
Regulation 47. If at any meeting, no directormeeting.
is willing to act as Chairman or i
no director is present within fifteen minutes after the time appointed for holding
the meeting, the members present shall choose one of the members Presentto be
the Chairman of the meeting.
 CHAPTER 12- CONVENING &CONDUCT OF SHAREHOLDERS' MEETINGS 105
5 Minutes (Section 118). Minutes mean a written record of all the proceedings
meeting. Some important points
of 0Every company shall take steps pertaining
the to get the tominutes
minutesof are follows: of
the asproceedingS
general meetings, meetings of the Board of Directors and
its
and every resolution passed by postal ballot prepared withincommittees
30 days of
conclusion of such meeting or passing of
resolution by postal ballot.
() Separate minutes books have to be maintained for each type of Meeting.
Every minutes book shall be in a bound form and not in aloose-leaf
form.
(i) Every page of the minutes book must be serially numbered.
Vl Minutes must present a fair and proper summary of all the proceedings
conducted at the Meeting.
n) A!! appointments made at any of the meetings aforesaid shall be
included in the minutes of the meeting.
(ni) In the case of a meeting of Board of Directors or of a committee of the
Board, the minutes shall also contain
(a) the names of the directors present at the meeting; and
(b) in the case of each resolution passed at the meeting, the names of the
directors, if any, dissenting from, or not concurring with the
resolution.
(vin There shall not be included in the mínutes, any matter which, in the
opinion of the Chairnman of the meeting
(a) is or could reasonably be regarded as defamatory of any person;
(b) is irrelevant or immaterial to the proceedings; or
(c) is detrimental to the interests of the company.
The Chairman shallexercise absolute discretion in regard to the inclusion
or non-inclusion of any matter in the minutes on the grounds stated
above.
The minutes kept in accordance with the provisions of the Act shall be
the evidence of the proceedings recorded therein.
(ix) Each page of every such book shall be initialed or signed and the last
page of the record of proceedings of each meeting or each report in such
books shall be dated and signed within a period of 30 days:
(a) In the case of minutes of proceedings of a meeting of the Board or of
acommittee thereof, by the Chairman of the said meeting or the
Chairman of the next succeeding meeting
(b) In the case of minutes of proceedings of a general meeting, by the
Chairman of the same meeting
Chairman
() In case of every resolution passed by postal ballot, by the
of the Board.
(*) The minutes book of general meetings shall be kept at the registered
office of the company.
)Minutes constitute a prima-facie proof of meetings being in order.
() The minutes book shall be open for inspection to members during
business hours without any charge.
Q. 6. Write a note on
Proxy.
 UNIVERSITY SERIES
106 SHIV DAS DELHI
member is entitled to attend and vote either
meeting, a
Ans. Proxy. In any means an authority to represent and vote
Person or by proxy. So a
proxy of proxy that a personfor
appointed
member ina meeting.
to represent is through this instrument
It member. The person so appointed to represent
another
another
member of the
another is called a proxy. Proxy' need not be a
meeting.
company.
The
speak in the
proxy does not get a right to
Thus, Proxy means
appointed to represent a member of the company, and
() A person which person is appointed to vote for a member at
(ii) An instrument by a
the meeting of the company.
Provisions of the Companies Act relating tomemberProxy:
of a company shall h
() Section 105(1) provides that every proxy to attend and vote insted
entitled to appoint another person as his
of himself.
company.
(ü) A proxy need not be a member of the shall not be
(i1) A proxy shall not have the right to speak at such meeting and
entitled to vote except on a pol.
behalf of such member or
(10) A person appointed as proxy shall act on number of shares as may
number of members not exceeding 50 and such
be prescribed.
(o) Section 105(2) provides that every notice sent by a company for calling a
meeting must prominently mention the right of a member to appoint a
proxy along with the fact that the proxy need not be a member of the
company.
(vi) The instrument appointing a proxy shall -
(a) be in writing; and
(b) be signed by the member or his attorney duly authorised in writing
or, if the member is a body corporate, be under its seal or be signed by an
officer or an attorney duly authorised by it.
(vi) 'Proxy' instrument has to be deposited with the company 48hours betore
the time of the meeting.
(viii) For each meeting a separate proxy is required.
(ix) No invitation to appoint any person as proxy shall be issued at us
company'sexpense.
(x) Every member entitled to vote at the meeting of the company shall be
entitled to inspect the proxy during the period beginning 24 hours before
the time fixed for the meeting and ernding with the conclusion of the
meeting
(xi) A proxy is revocable and subject to the provisions of the Articles, itcan
be revoked any time, before it is acted upon. Death or insanity ofthe
member appointing the proxy also revokes the authority of the prony
provided the company receives intimation in writing of such death of
insanity at its office before the
(xii) A member can prevent commencement
the proxy of thethemeeting
from exercising right to vote
himself
attending the
Q. 7. Write a note meeting and voting at the meeting.
on voting at general meeting.
 CHAPTER 12: CONVENING & CONDUCT OF MEETINGS 107
Ans. Voting at General
SHAREHOLDERS
Meeting. Any motion proposed in a meeting of the
company is decided by votes
of the
proxies. A vote means members rightmembers presentmayeither
which he/she in person
exercise or by
as deemed fit
in his/her interest. But such a vote must be exercised keeping in mind the best
interest ofthe company.
Method of Voting. The voting in a company may take place either:
(i) by show ofhands,
(i) by poll, or
(ii) through electronic means.
() Voting by show of hands. It is the simplest method of voting, results of
which can be given by the Chairman immediately. However, this method
violates the confidentiality of the members' wishes. Again, voting is not
proportional to the shareholdings held by the members.
(ii) Voting by poll. As against the voting by show of hands, poll means
counting of votes in favour and against amotion. It is done whenever it
is so demanded. In a poll, voting rights of different members are in
proportion to their shareholdings.
Whocan demand a poll. On a motion, decision to take voting by poll may be
taken by the Chairman on his own accord or_a demand for a poll may be made by
the members present. Poll will be a necessary mode of voting in the following
cases:

(a) In case of a company having share capital. When poll is demanded by

any member present in person or by proxy, such a member or proxy
must be holding shares (i) with power to vote not less than 1/10th of the
total voting power; or (i) with an aggregate sumn of not less than
5 lakhs paid up value or such higher amount as may be prescribed.
(b) present
In case inofperson
any other company, when demanded by any member(s)
or by proxy and havingnot less than 1/10th of the total
voting power.
When a poll is taken, a member is free tosplit his votes in favour of as well as
against the same Resolution. He has the right to distribute his votes in any
manner he chooses.
The manner of taking a poll is to be decided by the Chairman. He appoints two
SCrutineers (one of whom must be a member, if available and willing) to
SCrutinise the votes given on the poll. A declaration of the Chairman that a
Resolution has or has not been carried is prima-facie evidence of the Resolution.
A poll on a Resolution for the adjournment of the Meeting or for the
appointment of Chairman must be immnediately taken. Chairman, in all other
Cases, must take poll at any suitable time but not later than 48 hours of the
demand for poll. Íf apoll is not completed on the same day, it will be continued
On the next day and the Chairman will not be entitled to close the poll.
l the Articles so provide, members holding shares on which calls are in arrear,
or in regard to which Company has exercised right of lien, may not be allowed to
vote on poll.
(ii) Voting through electronic means. The Central Government may prescribe
the class or classes of companies and the manner in which a member may
exercise his right to vote by electronic means (Section 108).
 108 SHIV DAS DELHI UNIVERSITY SERIES
and Administration) Rules
Rule 20 of the Companies (Management
provides the following rules relating tovoting through
1. Every listed company or a company having
electronic means.
1,000 or more
2014,
exercise their
shall provide to its members facility to
general meetings by electronic means.
sharvoteeholderthes,
right to at
2. A member may exercise his right to vote at any general
electronic means and the company may pass any resolution by meeting by
voting system.
3. The company shall follow the following procedure, namely:
electronic
() the notices of the meeting shall be sent to all the m
memberS, auditors
of the company, or directors;
(ii) the notice shallalso be placed on the website of the company,if any.
(ii) the notice of the meeting shall clearly mention that the business mav
be transacted through electronic voting system and the company is
providing facility for voting by electronic means;
(io) 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 shallalso provide the login
ID and create a facility for generating password and for keeping
security and casting of vote in a secure manner;
() the company shall cause an advertisement to be published, not less
than 5 days before the date of beginning of the voting period, at least
once in a vernacular newspaper and at least once in an English
newspaper including the following matter, namely:
(a) statement that the business may be transacted by electronic voting
(b) the date of completion of sending of notices;
(c) the date and time of commencement of voting through
means;
electronic
(d) the date and time of the end of voting through
(e) the statement that voting shall not be allowed electronic means;
date and time; beyond the said
(9 website address of the
(g) contact details of thecompany and agency, if any, and
person responsible to address the
grievances connected with the electronic voting;
(vi) the e-voting shall remain open for not less than 1 day and not more
than 3 days:
In all such cases, such voting period
prior to the date of should be completed 3 day
the general meeting:
(vi) during the e-voting period, shareholders of the company, may cast
their vote electronically;
(viii) at the end of the voting
forthwith be blocked; period, the portal where votes are cast
shall
(ix) the Board of
(x) the scrutiniserDirectors shall appoint one
shall, within a period ofscrutiniser;
days from the date not exceeding 3 work
of
conclusion of e-voting
votes in the presence of at least 3 witrnesses not inperiod, unblock the
the employment of
 ONVENING &CONDUCT OF
the nnpnr ad make
favvr or a SHAREHOLDERS
scrutiniser's report of
MEETINGS 109

() subiet to
against. it any. torthwith to the the votes cast tn
deeni
the reipt ot Chairman,
to be passed on thesutficient votes, the resolution shall be
the menmbes. date of the relevant general
are the different meeting o
shareholders? Explain.types of Resolutions which may be passed in a
Sesolution. ln an Meeting the
torm f popoals matters which are put for
m be brought for
and are called 'motions', consideration
In a Meeting
anv other memberconsideration either by the Chairman oranybysuch
or for decision andalso. Any such motion, after due discussion,theis
its decision is
"Rsution". So a
Resolution recorded in the form of
means formal recording
as expressed by voting. of the wishes of the
Gernerally, Resolutions are of three
1. Ohiinarv Resolution
Seial Resolution
Resolution requiring special notice.
: Ordinary Resolution (Section 114(1)]. It is a resolution of
ndr the Companies Act has been duly given and which iswhich notice
passed with
Sne majonty ot the members present either in person or through proxies.
Sile majority means that the votes cast in favour of the resolution exceed the
Sgainst the esolution. It may be passed either by a show of hands or
eletoriallv or ona poll.
An orinary resolution is passed for the ordinary business transacted at the
Aal General Meeting for example.
< consideration of financial statement and the reports of the Board of
Directors and auditors;
the declaration of dividernd;
(the appointment of diretors in place of those retiring; and
(the appointment of auditos and fixation of their remuneration.
There are certain items of special business which require an ordinary resolution
(2) Alteration of the name clause of the company at the direction of the
Central Govermment Section 16(1).
Alteration of the share capital Section 65(1).
) Issue of bonus shares Section 63(2).
Removal of adirector other than the director appointed by the Tribunal
under Section 169(1).
-Special Resolution (Section 114(2)]. A Special Resolution is one which is
uired in transacting special business and it is required to be passed by a three
th majority. Section 114(2) of the Companies Act provides that a resolution
Stal be special resolution when:
(2) Ihe intention to propose it as a Special Resolution has been duly
specified in the notice calling the General Meeting: hands.
1e) Ihe votes cast in favour of the Resolution (whether by ashow of
or electronically, or by apoll) by the members present, in person, or by
110 SHIV DAS DELHI UNIVERSITY SERIES
3 times the votes Cast
Proxy, or by postal ballot are not less than
the Resolution by the members.
Special Resolution is needed for the. purposes such as:
agains
Memorandum of Association.
() Change in Objects Clause of Association as regards
(11) Change in Memorandum of arnother.
"Registered Office'
of the company from one State to
(i) Alteration of the Articles of Association.
(io) Reduction of share capital. the prospechus
() Making variation in terms of contracts mentioned in
(oi) Changing shareholders' rights.
beyond 15.
(vi) Increasing maximum number of directors
(vii) Removal of an auditor.
(ix) Buy-back of shares.
3. Resolution requiring special notice [Section 115]. It is not an independe.
class of Resolution. Rather, it is a kind of Ordinary Resolution with the differene
that the mover has to give a 14 days' prior notice of the intention to move such.
Resolution. The company, on receipt of such a notice, will give a notice of fhe
Resolution to the members at least 7days before the meeting in the same manner
in which notice for meeting is given.
Special notice of the intention to move such resolution shall be given to the
company by members holdings minimum 1% of the total voting power or
holding shares on which an aggregate of not less ?5 lakhs has been paid up on
the date of the notice.
Special notice is required by the Act in the following cases:
1. For appointing an auditor other than the retiring auditor or for a
resolution providing that an auditor retiring shall not be reappointed
except where the retiring auditor has completed a consecutive tenure of5
years.
2. For removal of a Director before the expiry of his term or for
appointment of a Director in place of the Director so removed.
Q.9. Distinguish between on ordinary resolution and a special resolution.
Ans. Ordinary resolution. See Q. 8, on the Opposite Page 110.
Special resolution. See Q. 8, on the Opposite Page 110.
Distinction between an Ordinary resolution and a Special resolution
Point of Distinction Ordinary Resolution Special Resolution
1. Nature of Business Usually, items of ordinary
Usually, items of specal
business
of
require passing business require passing
an ordinary resolution. of a special resolution.
2. Majority It is passed by simple It is passed by 3/4h
majority. majority. In case of a
Special resolution, votes
cast in favour of
resolution should be 3
times the votes cas
against it.
 CHAPTER 12:
CONVENING & CONDUCT OF
3. Filing of the Copy
of the Resolution
SHAREHOLDERS'
Not required to be filed
MEETINGS 111
with the ROC. Required to be filed
with ROC with the ROC within 30
4. Explanatory Sta Not days of passing it.
tement alongwith required to be sent Required to be sent
the Notice alongwith the notice of
the meeting. alongwith the notice of
the meeting. The
statemernt should give all
material facts about the
items of special business.
5.Casting Vote of The Chairman can
the Chairman give
his casting vote in case
The Chairman does not
a tie. of have a casting vote.

Q. 10. Write a note on passing of resolution by Postal Ballot.

Ans. Passing of Resolution by Postal Ballot. Section 2(65) of the Companies
Act, 2013 defines 'postal ballot as
mode.
voting by post or through any electronic
Section 110 contains provisions regarding passing of resolution by
ballot. These provisions are as follows: postal
1. A Company:
(a) shall, in respect of such items of business as the Central
Government
may, by notification, declare to be transacted only by means of postal
ballot; and
(b) may, in respect of any item of business, other than ordinary business
and any business in respect of which directors or auditors have the
right to be heard at any meeting, transact by means of postal ballot,
in such manner as may be prescribed, instead of transacting such
business at a general meeting.
2. If a resolution is assented to by the requisite majority of the shareholders
by means of a postal ballot, it shall be deemed to have been duly passed
at a general meeting convened on that behalf.
One Person Company and other companies having members upto 200 are not
required to transact any business through postal ballot.
List of items of business in which the resolution has to be passed through
Postal Ballot: The items of business in which the resolution shall be passed
through Postal Ballot are as follows:
(a) Alteration of the objects clause of the Memorandum;
(b) Alteration of Articles of Association in relation to insertion or removalof
the provisions which are required to be included in the Articles of a
Company in order to constitute it a private company;
() Change in the place of registered office outside the local limits of any
City, town or village as specified in Section 12(5);
(a) Change in objects for which a company has raised money from public
through prospectus and still has any unutilised amount out of the monev
SO raised under Section 13(8);
(e) Issue of shares with differential rights as to voting or dividend or
otherwise under Section 43;