7.6PLACE OF KEEPING AND INSPECTION OF REGISTERS, RETURNS, ETC (Sec.

94
1. Place of keeping The registers and indices (as are required to be maintained u/s 88) and copies of annual retu
tum
the registers and (filed u/s 92) shall be kept at-

returns (a) registered office of the company; or

the

(b) any other place in India, if-

(i) more than 10% of the total number of members reside at such place; and
(ii) SR is passed in GM.
2. Period of (a) The register of members and the index of members shall be -

maintenance ) preserved permanently; and

(ii) kept in the custody of the company secretary of the company or any other person
authorised by the Board for such purpose.
(b) The register of debenture holders or any other security holders and their indices shall be -

(i) preserved for a period of 8 years from the date of redemption of debentures or
the case may be; and
securities, as
(i1) kept in the custody of the company secretary of the company or any other person authorised
by the Board for such purpose.
(c) The foreign register of members shall be preserved permanently, unless it is discontinued
(c)
and all the entries are transfered to any other foreign register or to the principal register.
 Chay (d) The foreign Tegister ol debenture holders or any other security holders shall be preserved for
a period of 8 years from the date of
redemption of such dcbcntures or sccurities.
(e) The foreign registers shall be kept in the custody of the company sccretary or any olher
person authoriscd by the Board for such
purpose.
() The copies of all annual rcturns prcpared u/s 92 and copies of all certificates and docuiments
required to be annexed thereto shall be prescrved for a period of 8 years from the date of
filing with the Registrar.
(a) The registers, indices and copies of annual return shall be open for inspection by -
3. I n s p e c i i o n

(i) any member, debenture-holder, other sccurity holder or beneficial owner, without
paymcnt of any fees;
(ii) any other person, on payment of such fee as may be specified in the articles of the
company but not exceeding Rs. 50 for each inspection.
(b) nspection may be made -
(1) on every working day;
(ii) during business hours, at such reasonable time as the Board may decide, subject to the
condition that at least 2 hours on every working shall be allowed for
day inspection.
(c) No inspection of registers and indices can be made when the registers and indices are closed
in accordance with the provisions of Sec. 91.
4. Extracts and (a) Any person may take extracts from the registers, indices and annual return, without payment
of any fees.
copies (6) Any person may require a copy of the registers, indices and annual return, on pay1ment of
such fee as may be specified in the articles of the company but not excecding Rs. 10 per
page. Suchcopyshall besupplied bythe company within 7days of payment of suchfe.
Such particulars of the registers, indices and annual return as may be prescribed, shall not be
5. Restriction on
available for inspection or for taking extracts or copies.
inspection,
extracts, etc.
6. Effects of If a company refuses to allow any inspection or taking of any extract or fails to supply any copy,
refusal to allow then,
(a) the company and every officer of the company who is in default shall be liable, for each
inspection, such default, to a penalty of Rs. 1,000 for every day during which the refusal or the failure
taking of continues, subject to a maximum of Rs. 1 lakh; and
extracts, etc. (b) CG (such power has been delegated by CG to the Regional Directors) may, by order, -

(a) direct an immediate inspection; or

(b) direct that the extract required shall forthwith be allowed to be taken; or
(c) direct the company to company toforthwith supply thecopy.

2018 Whethertheregister ofmembers canbemaintanedot Kolkga r theregistered officeis inMumba Sec 94

gnd whethera directo15 entifedfoinspecihe.register.ofmembersk
P76A.echno Ltd. maintains its Register of Members at its registered office in Mumbai. A group of members residing in Kolkata want too
Keen
KEep the
register of members at Kolkata.
( h th provisions of Companies Act, 2013, whether the company can keep the Registers and Returns at Kolkata.
Ane Ronjit, Director (bui not a shareholder) ofthe company have the right to inspect the Register of Members?

The
company can keep hne if ) more than 10% of the total number of membeis reside at Kolkata; and
egisiers and retums at Kolkata ) SR is passedin GM.
Mr.Ranjit is
entited to inspect the
Tegisier of members
sinceSec.94 entilles any person (even it he is not a member) to make inspection of registers ancd
returns;
on payment of such fee as may be specified in the articles of fhe company but not exceeding
Rs. 50 for each inspection.

REGISTERS, ETC TO
The registers a BE EYIDENCE
and indices (as are required to benaintained u/s 88) and copies of annual return (filed u's 92) shall be prima
Sec. 95
facie ev
OT any matter directed or authorised by the Act to beinserted therem. ****
***** *
 Unit II: General Meetings
REQUISITES OF AVALID CENERAL MEETING
Properly called (a) Thc mccting must be called by a proper authority; and
(b) Proper noticc must beservedinthe mannerspecificd under theAct(Sec. 101 and 102
(a) Proper quorum must be present in the general mecting (Sec. 103).
Properly
convened (b) Proper chairman must preside the meeting (Sec. 104).

Properly (a) The business must be validly transacted at the meeting (i.e. resolutions must be pr
conducted moved and passed, and voting by show of hands and on poll must be proper) (Sec. 105operly
1
107, 108, 109, 112, 113, 114, 115, 116, 117 and 121). 106,
(b) Proper minutes of themeetingmustbeprepared (Sec. 118 and 119).

79PROPER AUTHORITYT0CALLAGM 22 53
. Board Board has power at common law to call any GM (viz. AGM as well as EGM). Sec. 100 con
an express power on the Board to call an EGM, whenever the Board may deem fit.
onfers
An individual director has no power to call a GM.
Notice ofa GM given by a secretary or a director is invalid if it is given without the sanction of
the Board. However, the notice may be ratified by the Board.
2. Members Members who fulfil the requirements of Sec. 100 are eligible to requisition an EGM. In case
of
failure of the Board to call the EGM within the time limits given u/s 100, the members
mav
themselves call an EGM as perthe provisions of Sec. 100.
3. Tribunal An AGM may be called by the Tribunal u/s 97
An EGM may be called by the Tribunal u/s 98

7.10 LENGTH OF NOTICE, CONTENTS OF NOTICE Sec 101

ANDANDNOTICE TOWHOM
1. 21 days' notice (a) Any GM may be called by giving at least 21 clear days' notice.
(6) Where a notice of GM is scnt by post, it shal be deemed to be served at the expiration of 48
ours after the letter containing the same is posted (Rule 35(6) of the Companies
(Incorporation) Rules, 2014).
() Part of the day on which the notice is deemed to be served on the member cannot be added to
the part of the day upto the time of the GM so as to make it one day. Each of the 21 days must
be full/ complete days.
(d) The day on which the notice is deemed to be served on the member, and the day of the GM
haveto be in addition to the 21 days.
The notice shall be given -
2. Manner of
giving notice (i) in writing, or
(i) by electronic mode, in such manner as may be prescribed.
GM may be called by giving shorter notice, if consent, in
3. Shorter notice Any writing or by electronic mode, is
given-
i) in the case of an AGM, by not less than 95% ofthe members entitled to vote thereat, and
(ii) in the of EGM, by
case -

(a) majority in number of members holding not less than 95% of such part of the paid-up
share capital of the company as gives a right to vote at the meeting, in case of a company
having a share capital; or
(b) members having not less than 95% of the total voting power, if the company has no Sh are
capital.
 The noticc shall specify
4. Contents o f
) place, date, day and hour of GM; and
n o t i c e

(i) business to be transacted

at the GM (i.e. agenda)
The notice shall bc given to
5 Notice lo
(i) cvery director;
(ii) cvery member;
W h o m ?

(ii) legal representatives of the deceased member:

(iv) official assignee of the insolvent member; and
(v) auditor(s).
6. Effect of Accidental omission to give notice of GM shall not
invalidate the proceedings of GM.
omission to Non-receipt of notice by any person cntitled to receive notice of GM, shall not invalidate the
proceedings of GM.
give notice

for Electronic mode A company may give notice

7.
Procedure

permitted
through electronic mode.
notice given by
Meaning of The expression 'electronic mode'
electronic
electronic mode
means any communication
by sent a

mode
company through its authorised and secured computer programme which is
capable of producing confimation and
record of such keeping
communication addressed person to
entitledthe
to receive such
communication at the last electronic mail address provided by the
member.
Requirements of link| The notice made available on the electronic link or Uniform Resource
or URL Locator (URL) has to be readable, and the recipient should be able to
obtain and retain copies.
The company shall give the complete Uniform Resource Locator
address of the website and full details of how to aco
(URL) or
document or information.
8. Procedure for Modes permitted
notice
for| A notice may be sent -

) by e-mail
notice given by | sending as a text; or
as an attachment to e-mail; or
e-mail
(ii) as a notification providing electronic link or Uniform Resource
Locator for accessing such notice
E-mail to whom? The e-mail shall be addressed to the person entitled to receive such e-mail -

(a) as per the records of the company; or

(b) as provided by the depository.

Opportunity to The company shall provide an advance opportunity at least once in a
and to
members to register financial year, to the members to register their e-mail addresses
and update e-mail update their e-mail addresses.
uddresses
Subject line in the e The subject line in e-mail shall state
mail i) the name of the company
(i) notice of the type of meeting
meetingis scheduled.
i1i) place and the date on which the
a no)-editable attachment to e-mail, such
form of
Opportunity to If notice is sent in the
attachment shall be-
imembers to
Document (PDF); Format or
download software (i) in the Portable
format
(i) in a non-cditable instructions' for recipient for downloading relevant
link or
together with a

version of the software.

 The company should use a system which produces-
Maintenance of
records by the (i) confirmation of the total number of recipients e-mailed; ane
and
(i) a record of cach recipient to whom the notice has been ent.
compan
A copy of such record and any notices of any failed transmiss
subsequent re-sendingshall beretained bythe company.
nissions and
Failure in The company's obligation shall be satisficd when it transmits
mail.
the
transmission not to
affect company's The company shall not be held responsible for a failur
lure in uansmissi
obligation beyond its control.
If a member fails to provide or update relevant e-mail addreso
company, or to the depository participant as the case may he the
company shall not be in default for not delivering
noticc via e-mai
E-mails through in- The company may send e-mail through -

house facility or (i) in-house facility; or

outsourcing (i) its Registrar and transfer agent; or
(iii) any third party agency providing bulk e-mail facility as mav
authorised by the company. be
Notice to be placed The notice of GM shall be simultancously placed on
on the website i) the website of the company, if any; and
(ii) such website as may be notified by CG.

Nov. 2005 Validity of notice sent on 14.102014for AGMscheduled for 0711.2014

Modified) (Sec 101)
P 7.10A. Dev Limited issued a notice for
on 16.10.2014. Some
holding of its annual general meeting on 7th November, 2014. The notice was
members of the company allege that the posted to the members
with regard to the company had not complied with the provisions of the
validly called. Referring to the provisions of the Act, Companies
period of notice and as such the meeting was not Act, 2013
() Whether the meeting has been
validly called? decide
If there is a shortfall in the
number of days by which the notice falls
short of the statutory
days does the notice fall short of the
statutory requirement? requirement, state and explain by how many
Ci) Can the shortfall, if any. be condoned?
Áns.
Day of holding the AGM 7th November, 2014.
Day of despatch of notice 16th October, 2014.
Days to be excluded
Day of holding the AGM (i.e. 7th November.
Day of despatch of notice (16th October. 2014)
2 days for service of 2014)
notice (i.e. 17th and 18th
Number of days notice givenn 19 days. October, 2014).
Number of days notice required u/s 101 21 days.
(i) AGM has not been validlycalled since 21 days' notice of the AGM has not
() The notice is short been given to the
members.
by 2 days.
-

(ii) The shortfall

maybe condoned if consent is
given for such shorter notice
by at least 95% of the members
AGM. entitled to vote at such

Nov. 2007 Whether nofice despatched on 06.09 2014 1s valld for

(Modified)
P
AGMfo be held on 28.09.2014?
7.10B. XYZ Limited called its Sec 101)
2014. With reference to the
Annual General meeting on 28th
provisions of the' Companies Act, 2013 September,
examine
2014. The notice of the
meeting
Ans. whether the notice was posted on 6th September.
given by the company was valid.
Day of holding the AGM 28th September, 2014.
Day of despatch of notice 6th September, 2014.
Days to be excluded
Day of holding the AGM
(i.e. 28th September,
Day of despatch of notice 2014)
2 days for service (6th September, 2014)
Number of days notice given of notice
(i.e. 7th and 8th
19 days. September, 2014).
Chap, 7

hoilcee
/egulred
u/s 101 21 days
days colled since 21 days" notice of lhe AGM has nol been
lber of valicdly given to Ihe members.
hos
nof
been
Dy 2 claYs.
AGM short
s condoned
il consont is given for such shorlar nolice by al leIsl 95% of Ihe members entifled 1o vole di
notlce
be
The ineiy SUch AGM.
shorlal
he

ORDINAR BUSINESS AND SPECIAL BUSINESS (Sec. 102)

Dofering to the provisions ot the companles Aci, 2013, state the matters relaling to 'Ordinary Business' which may be
Nov. 2006
fnsocted at the Annual General Meefing of the Company. What kind of resolulons need to be passed to transact the
Oroinary Business'andthe Speclal Business' at the Arnnual General Meeting ofthe Company? Explain.
slate the ordinary business whlch may be fransacted at an Annual General Meeling of a public limited company
incorporoted under the Companies Act,
M o y2 0 1 2 2013.

Whichmatters are considered fo be "Ordinary" matters at the Annual General Meeting of a company?
May2014
Meaning 1. At an AGM [Sec. 102(2)(a)]:
1. Ordinary
Following business shall be ordinary business:
business
(i)
Consideration and adoption of financial statements, Auditors Report
and Board's Report
ii) Declaration of dividend
(iii) Retirement of directors by rotation and appointment of directors in the
place of those retiring
(iv) Retirement of auditors and appointment of auditors in the place of those
retiring, and fixing of remuneration of auditors
2. At any other GM (i.e. at an EGM):
No business shall be deemed as ordinary business.

Explanatory Explanatory statement is not required for transacting any item of ordinary
statemen business.
2. Special Meaning I. At an AGM:
All business except that specified u/s 102(2)(a) shall be deemed as special
business
business.
2. At any other GM (i.e. at an EGM):
All business shall be deemed to be special business.
Full text of the Full text of the resolution must be given in the notice for transacting every item of
resolutio specialbusiness.
Explanatory statement shall be annexed to the notice for transacting every item of
Explanatory special business.
statement
Contents of (a) Material facts
explanatory (b) Nature of concern or interest (financial or otherwise) of-
statement i) every director and manager,
(ii) every ofher key managerial person
(iii) relatives of every director, manager and key managerial person

(c) Any other information and facts that may enable members to understand the
meaning, scope and implications of the items of business and to take decision
thereon.
other company, the extent of
(d) If special business relates to, or affects, any
shareholding in that other company of every promoter, director, manager and
shall be disclosed, if the cxtent of such
every other key managerial person
shareholding is 2% or more of the paid up share capital of that other

company.
(e) special
If business refers to any document which is to be considered at the
time and place where such document can be inspected shall
be
GM, the
Statement.
specified in the Explanatory
 insullicient disclosure in ExnI.
result of non-disclosure or
otherMatokeyry
EFfects of non- l, as a
to a promoter, cdirector, manager or
disclosure Statement, any benefit accrues
such person shall hold such
managerial personnel or their relatives, the company to the extent of n
bene
trust for the company, and shall compensate of beneft
derived by him.
of this section, every pronote
3. Punishment It any default is made in complying with the provisions
of the company who IS in detault shall be liako,
for default manager or other key managerial personnel liable to a
penalty of-
(a) Rs. 50,000; or
dircctor, manager
5 times the amount of bencfit accruing to. the promoter, other key
other
or
(b)
managerial personnel or any of his relatives,
whichever is higher.

May 2006 Whether notice of GM which does not disclose amount of proposed Inerease in share (Sec 102
May 2007 capitalis valid?
P A. A company served a notice meeting upon its members. The notice stated
of general
that a resolution to incredse the share conite
the company would be considered af such meeting. A shareholder complains that the amount of ihe proposed incredse was not speciied.
ed in
the notice. Is the notice valid? (May 2006)
OR
ABC Limited serveda notice of a general meeting upon its members. The notice stated that a resolution to increase the Share Capita! of t
the
companywould be considered ot the meeting. A member complains to the company thot the amount of the proposed increase
(Maywas
2007)
nol
specified in the notice. In the light of the provisions of the Companies Act, 2013 examine the validity of the nofice.

Ans.
increase in share capital
Explanatory statement is required
Material facts must be disclosecd
Amount of proposed increase in share
capital
The notice is not valid in the given case
iS an item of special business.
for every item of special business.
in the explanatory statement.
is a material fact which ought to be disclosed in the explanatory stetement;
since the explanatory statement must contain all the information and all the facts that may
enable ihe members to understand the meanirng, scope and implications of the items of
business and totake decision thereon.
since the provisions of Sec. 102 are mandatory:
since notice given. or any resolution passed in the GM, without containing ihe explanatary
statement or withoui disclosing the material facts, is invalid.

Nov 2009 Whether a notice of GM speciying only that issue of weat cguty shares shall be (Sec.102)
considered.at GM,isvalid?
P 7.11B. M.H. Company Limited served a notice of general meeting upon iis sharehoiders. The notice stated that the issue of sweet equly
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.
Ans.

issue ofsweai equity shares is an ifem ofspecial business.

Explanatorystatement isrequired
Material facts must be disclosed
Material facts in the given case are
The notice is not valid in the given
Case
for everyitem of special business.
inthe explanatorystotement.
(a) Number of shares
(b) Current market price
c) Consideration
(C) Theclass of directors or employeestowhom such equity sharesshallbeissued (Sec. 54
since the provisions of Sec. 102 are mandatory:
since nofice given, or any resolution passed in the GM, without containing the exploraroy
statement or without disclosing the material facts, is invalid.

7.12 QUORUM FORbyGM (Sec. 103

May 2005 State what is meant 'Quorum' and when can quorum be considered immaterial under the provisions of the Companies
Act
1. Meaning of Quorum means the minimum number of members who must be present in order to consitut
quorum valid meeting.
 P u b l i c c o m p a n y
Case Number of nembers as on the date
meeting Required quorum
Q u o r u m

1 Upto 1,000
More than 1,000 but S members personally present
upto 5,000; 15 members
IlI | More than 5,000 personally present
30 members
Articles may proVIde for larger number as the quorum.
a personally present
Private company
2 members personally prescnt shall be the
Articles may providc for a larger number asquorum.
the
- Q u o r u m n

quorum.
If the
quorum is not present within
L a c k o fq u o r u m half-an-hour from the time fixed for
Case : EGM waS called| The meeting
holding the GM, then =
Legal efect

by requisitionists uls 100

shall stand cancelled.
Case I: Any other case i) The mecting shall
adjourn to such day, time and place as may
be determined by the Board.
(ii) However, if the Board has not so deternmined the day, time
andplace, the meeting shall adjourn to same day, time and
place in the next week.
(111) At least 3 days' notice of adjourned meeting shall be given to
the members either
individually or by publishing an
advertisement in 2 newspapers (one in English and one in
vernacular language).
(iv) lf at the adjourned meeting also, quorum is not present within
half-an-hour from the time fixed for holding the GM, the
members present shall be the quorum. -

5. Quorum when Quorum needs to be resent only at the commencement of GM.

Thus, quorum is noi required at the time of passing each and every resolution.
required?

May 2006 Whether quorum Is present where 4 proxies 3 representatlives and2 preterence (Sec 103, 105 112and 13
shareholders are present.and the articles require quorum of7 members?
F7.12A. The articles of association of X Ltd. (having 40 members) 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 oppointment of Managing Director:
A, the representative of Governor of Madhya Pradesh.
) Band C, shareholders of preference shares
i)D,representing YLtd. and Z Ltd.
) E,F, G and H as proxies of shareholders.
Can it be sald that the quorum was present in the meeting?
Ans.
Ashaill be treated as a
member -Since he is the representalive of the Governcr of Madhya Pradesh (Sec. 112).
personally present
Band C shall be Since preference shareholders can vote only in relation to such matters which directly affect their righis;
excluded while
delermining quorum since appointment of MD does not directly affect the rights of preference
shareholders.
Dshall be
treated as two since each of the two body Corporates shail be treated as a member personally preseni (Sec. 113).
members personally present
E,F,G and Hare not 'peisonally present' exclude proxies.
members Since ihe words
personally present
Ihe
quorum is not ihe arficles fro!m 5 to 7, in the given case);
present in the Since ihe quorUm can be increased by
gven case in fhe given case, but quorum required is 7.
Since only 3 members are personally present

Noy.2006 possed bya single

whetber d resolulion varying the terms o preference sharesshares
Sec103
UAIIENCE shareholderholding proxies from.allother
P7.128. DJA Compa preferences isyalidke the company for
A meeting of the preference
shareholders was called by
Hh pany
ending the fd. has only 50 preference shareholders. held proxies from
shareholder who atended the meeting. He, however,
al others Of fhese shares. Mr. A, was the only preference ferms of the issue of these shares.
Relering shareholders. amending the
a resolution for
He fook the Chair, conducted the meeting and passed
the and the resolufion passed thereat.
provisions of e Companies Act, examine the validity of the meeting
the
 p.
Ans. than one person. Therefore, one ro
Sharp v Dawes A meeting means coming together of more
mber conno
Constitute a meeting
s i n c e presence of a single member (viz. A) does not Constilute
Mr. a nee ting:
The meeting and resolutions passed
ihereat are not valid since same judgment was given in Sharp v Dawes.

Nov. 2007 Whether quorum is present arlicles require quorom of 15 members, 13 members are Sec 103 and
P7.12C. PersondllyPresent
The quorum and one.representative.represenllng2compahles
for a General meeting
1s preseni?
of a public company is 15 members personally present according
to the provisions of lhe
113
of associotion of the company. Examine with reference to the provisions of the Companles Act, 2013, whether there is proper auo.cle
General meeting of the company which was atended by the following persons:
13 members personally present
(i) 2 members represented by proxies who are not members of the company
(ii) One person representing two member componies.
Ans.
Required quorum 15members personally present (since the quorum can beincreased by the articles).
Member personaliy preseni 13.
Members present by proxies
Not counied in quorum.
Representative -representing two companies is counted as two members personally present Sec. 113).
Totai number of members 5.

personolly preseni
Whether quorum is presenf Yes

Nov. 2008 Cosequences where an tGMdjourned for wantoquorum cnd only 3mem (Sec. 103)
are personcilly presentinthe adiourned EGM
7.12D Stote the legal position in the following circumstances with referencetothe provisions in the Companies Act, 2013.At an adjouned
extoordinary general meeting of a Public Ltd. Company adjourned for want of quorum, only 3 members are personally present.
Ans.
he quorum is preseni at the since if an EGM is not held for want of quorum, and at the adjourned EGM also, quorum is not present
adjourned EGM within half an hour from the time fixed for holding the adjourned EGM, then, the members present shall
bethe quorum [Sec. 103(3)].

June 2009 Whefher passing of resolutionsis valid ofan adourned cGM ne auo
the originalas wellas odjournedEGM? asnotpresentin Sec.103
P 7.12E. 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
With reference to provisions of
meeting and passed certain resolutions.
Companies Act, examine the validity of the meeling and state whether resolutions passed at such meeting
shall be binding upon the company and its members.
Ans.
The resolutions passed at since if an EGM is adjourned for want of quorum, and the required quorum is again not present in tne
fine EGM are valid and
adjourned EGM, then, the members present shall be deemed to be the quorum
inding [Sec. 103(3)].

May 2015 Consequences where only 10 members are present.outof total 2750 member Sec.103)
P 7.12F. The Annual General Meeting of KMP Limited was
held on 30th
regarding the quorum of the General Meeting. Only 10 members were April, 2015. The Articles of Association of the company Is Sle
members of the company. The Chairman personally present in the above meeting. out of the total 2,
adjourned the meeting for want of quorum. Referring to the provisions
examine the validity of Chairman's decision. of the Companles Act, 201

Ans.
The required quorum is
5 members personally
present since the total number of members of the company exceed . D00
but does not exceed
The AGM shall 5,000.
automatically adjourn 1o the same day, time and
place in the next week or to such other date, time and he
Board may defermine, since the place d
quorum is not present within half an hour from the fime
the commencement of the meeting. x
The question of adjournment by the Since, in Case of absence of
chairman does not arise
direction by the chairman
quorum, the meeting automatically adjourns without requinng ny
regarding Cidjournment.
***
 quorums present and nsequences 7.19
h a y

18
Whether
eeling te
meeting.andkaouinedmeeting where guorum Is no present in the
its annual generai
7126.KMN
Ltd
heduled general meeing to be held on 11
annual

were present by 11:30 A.M. March, 2018 at 11:00 A.M.

ec
103)
perSOns The
MG.llowing
sharehol holders
company has 900 mem
embers. On 11th

P2 & P3nting ABC Ltd.

PÅrepresentin
P5represenfingDEFLtd.
nesen e of the shareholders
&P7as
proxie
in relevant provisions of the
E x a m i n e

P&
w i hreferen
ence

if P4 representing ABC LId.,

Companies Act, 2013,
whether quorum was
Exo reached in the present In the meeting.
What w
be you discuss the provisions as meeting after 11:30 A.M.?
of
quor
applicable for an adjourned
In
case
lack

happens
ns ifthere
tif
is no quorum in the Adjourned meeting? meeting in terms of date, time & place.
Whot

5 membeis
h e
r e q u i r e dq u o r u m
perSonaly present,
the number since of members of KMN Ltd.
meefing does not exceed 1,000.
AnS

as on he ddie
o
in -since they are members
personally present.
counted

shall
be
P3
P),
2 and
e t e m i n i n gg u o r u m

counted in Since ihey are representatives of ABC Ltd.

shall be and DEF Ltd., and as per section 113,
Band
P5
delermining q u o r u m
a body corporate shall have all the
rights of a member personally representative O
cOunted while determining present, and so they Sngi De
quorum.
in since they are not members
personcally present;
counted
be
shall nof
P7 since ihe
P%a
de'ermining q u o r u m words'personally present' exclude proxies.
preseni in the since 5 members
is are
personally present in the given case.
The quorum
givencase
fhe meeting ihere will be no quorum within half an
in hour from the time fixed for the
f P
reached

meeiing, and so fthe commencemer O

after 11:30 am meeting
shall not commence, but shall be adjourned.
The meeling shall adjourn to the same day, time and place in the next week or to such ofher
of lack of quorum
In case dote, time and ploace as the Board
may determine.
in the ihe members present shall be deemed to be the
) Hthere
is no quorum quorum [Sec. 103(3)])
adjournedmeefing

13 CHAIRMANOF GM (Sec. 104

Unless the articles of the company otherwise provide,
Election by
show of hands the members personally present at the meeting
shall elect one of themselves to be the Chaiman thereol
Sec. 104(1) On a show of hands.

Poll for election I f a poll is demanded on the election ofthe Chairman,

it shall be takcn forthwith
of chairman
in accordance with the provisions of this Act
Sec. 104(2)1 show of hands under sub-section (1)
and the Chairman elected on a

shall continuc to be the Chairnman of the meeting

other person is elected as Chairman ofthe as a result poll,
until some
Chairman for the rest of the meeting.
and such other person shall be the
as per the provisions
contained in the articles of
Summary of Appointment The Chairman shall be appointed
Sec. 104 4S per ariieles the company. the appointment of Chaiman,
articles do not contain any proVISIon regarding
Appointment If the follows.
shall be appointed as
as per the then, the Chairman themsclves to be the Chairman.
present shall elect one of
Members personally
procedure (a) shall be made by voting
on a show of
hands.
given us 104 Election of Chairman it shall be taken
(b) election of a Chairman,
demanded on the
is
(c) If a poll
forthwith.
as a result of show of hands shall
the Chairman elected
(d) During the poll,
Chaiman. he shall
continue to be the Chairman as a result
of the poll,
is elected as a
(e) If s o m e other person
for the rest of the mecting.
be the Chaiman
14PROXIESWhat do you mean by Proxy? Explain the provisions relating to appolntment of proxy under the Companiee. Sec. 10
May 2018
A person who is appointed by a member to attend and vote at a meeting (in the ahe ct, 2013.
Meaning of member at the meting) is temed as "proxy'. Thus, a proxy is an agent of the e absence of
proxy' e member
appointing him.
The term 'proxy' is also used to refer to the instrument by which a pcrson is appo

proxy.
intcd as a
Who can appoint Any rmember of a company entitled to attend and vote at a meeting of the company
a proxy? shall be entitlcd to appoint another person (whether a member or not)
as his proxy
to attend and vote instead of himself.
Provisions Unless the articles otherwise provide, -

applicable a member of a company having no share capital shall not be entitled to appoint a prox
subject to articles provisions relating to proxies shall not apply to a conmpany having no share capital.
the

Restrictions on CG may prescribc a class/ classcs of companics whose members shall not be
entitled to ann
proxy
a proxy. ppoint
A member of a company registered u/s 8 (viz. 'Not for Profit Company') shall not be
entitled s
appoint any other person as his proxy unless such other person is als0 a member of
company.
such
A person can act as
proxy on behalf of members
) not exceeding 50; and
(ii) holding in the aggregate not more than 10% of the total share
capital of the comDany
carrying voting rights.
A member holding more than 10% of the
total share capital of the conmpany
rights may appoint a single pcrson as proxy. provided that such carrying voting
person shall not act as proxy for
any other person or shareholder.
Disclosures In every notice
calling a meeting of a company, there shall appear with reasonable
required in statement that a member entitled to attend and vote
is entitled to
prominence a
vote instead of appoint a proxy, to attend
and
notice of GM himself, and thät a proxy need not be a member.
If default is made in
complying with this provisio, every ofticer of the company who is in
default shall be liable to a
penalty of Rs. 5,000
Deposit of proxy Any provision contained in the articles
torms which spccifies or requires a longer
period than 48 hours before a meeting of
depositing with the company any instrument appointing the company, for
shall have effect as if a period of 48 hours had proxy,
a

been specified in or
for such deposit. required by such provision
Legal The proxy form shall be -
requirements of (a) in writing,
proxyform (b) signed by the member.
No special An
instrument appointing a proxy, if in the form as may be
requirements in onthe ground that it fails to prescribed, shall not be questioned
comply with any special requirements
proxy form by the articles. specified for such instrument
Form No. MGT-11 has been
Disabilities of A proxy has no
prescribed for
appointment of proxy.
right to speak at the meeting.
proxy A proxy cannot vote on
a show of
hands.
A proxy is not
Rights of proxy
counted for the purpose of quorum.
A proxy has the
right to attend the meeting.
A proxy has the
right to vote on poll.
A proxy, if
eligible u/s 109, has theright demand a poll.
to
Inspectionof Any member is entitled to
inspect the proxies
lnspection can
only if 3 days' notice isdepositedto wi
be made pany.
proxies Inspectiom can be made given the
during the period beginning with 24 company.
GM and cnding with the hours before the commencement
conclusion of such GM.
lnspection can be madc only during business hours.
Revocation o f
l f after appomtment of proxy, the member himsclf
revocation of proxy. attcnds the GM, it amounts 1o
autoia
p r o x y
Once the proxy has voted, it cannot be revoked.
well.95 proyatends the oMWhose ot
h e t of MNO Limíted appoinis L as his proxy to atendshailBevalat
Membekds
Moy2 member
the general
K, a
nember) andI
and L (the proxy) vote on a panicular meeting of the Later he (K) also attends the
in the meeting. K's votecompany.
member)
P7.14A..

th K (the
meeting. B o t h
proxv resolution
appointed the proxy, L's vofe has been considered was declared invalid by the
to the declsion of the Chairman.Chairman
appointed
dating that since he
hOs as valld. K
stain orovision of the Companies
under
he
Act, 2013 whethe K's
objections shall be tenable. objects Decide,

Ans
of l as when K, the member, himself altends the GM.
oppoinfment

The
proxyisrevoked

L,theproxy,is
void since, when K, ihe member, himself attends the GM, the proxy is revoked, and so, L
Vote of
tenable since the Chaiman has eroneously considered L's has no right 1O vore.
K's objectionis vote as valid.

NOv. 2013 Member attends and vote at a GMalhough he nadgp

member
is valid? roxyWhether yotingby Sec 105
4 A G shareholder, of a company, dppointed 8, as a proxy, to attend the general meeting of the shareholders. Later on, A, himself,
nded the meeting and voted ondresolution. Decide, whether A can do so?

Áns.
of B as when A, the menmber, himself attends the GM.
The appointment
proxyisrevoked
Vote of A, the member, is Since. when A, the member. himself attends the GM, the proxy is revoked, and so. A, the member. is
valid entitled to vote.

Nov.2004 Validity ofwoproxiessionedand.ceposiled.withtbe commpany g aiterentponts otime Sec 105)

7.14C. Annual General Meeting of a Public Company was scheduled to be held on 15.12.2003. Mr. A, a shareholder, issued two Proxies in
respect of the shares heid by him in favour of Mr. 'X' and Mr. 'Y'. The proxy in favour of Y' was lodged on 12.12.2003 and the one in favour of
Mr.X was lodged on 15.12.2003. The company rejected thé proxy in favour of Mr, Y as the proxy in favour of Mr. Y was of dated 12.12.2003
andthat in favour of Mr. X was of dated 13.12.2003. Is the rejection by the company in order?
Ans.
Proxyin favour of Y doted 12.12.2003,lodged with the company on 12.12.2003
Proxy in favour of X dated 13.12.2003, Iodged with thecompany on 15.12.2003.
Proxy in favour of X shall since proxy form appointing X as proxy was not lodged with the company wilhin ihe prescribed fime, i.e. ot
berejected least 48 hours before the AGM.
Proxy in favour of Yshall and. therefore., the action taken by the company is not valid.
be valid

P.M. As per the notice the members who

ec105are unable to
niaAGeneral Meeting was scheduled to be held on 15th April, 2016 at 4.00 be sent to the company so as to reach at least 48
the proxy forms duly flled should
e meeling in person can appoint a proxy and Y as his and the proxy form dated 10-04-2016 was deposited
huk . e the meeting. Mr. X, a member of the company appoints Mr. Mr. X proxy his mind and on 12-04-2016 glves another proxy to
However, changes
M. 7 On was company at its Registered Office on 11-04-2016. SImilarly, another member Mr. W also gives fwo separate proxies to two
ne

indiu d deposited on the same day with the company.

dated 12-04-2016 was deposited with the company on ihe same day and
the Drov ned Mr. M and Mr. N. In the case of Mr. M, the proxy and N were present before the meeting.
ih favour of Mr. N was 14-04-2016. All the proxles viz. Y, 2, M
Accore mne deposited on
According to the provis
provisions of the Companies Act 2013, who would be the persons dllowed fo represent as proxies for members X and W

respectively?
Ans.
TOxy appointed by Mr. X in is daled 10.04.2016, and is deposited with the company on 11.04.2016.
TdvOUr of Mr. Y
OXy same day viz. 12.04.2016.
avour appointed
with fhe Company on
of Mr. L by Mr. X iri is doled 12.04.2016, and is deposited
M.7 Mr. L as proxy was SIgnea py he
member, Mr. X laterin point of time, ani
Mr.X aS
oroxy for s i n c e proxy form appoinfing
presciDedime,1.e. al leasi 48 hours before
ihe GM.
it was deposited with the Company wiirin fhne
** **********
 Proxy appointed by Mr. W in - i sdaled1204.2016, oncl is deposited wilh Ihe company on scime day viz. 12.04.2016.
favour of Mr. M
Proxy appointed by Mr. W in is daled 12.04,2016, and is deposiled wilh the company on 14.04,2016.
favour of Mr. N
Proxy appointed by Mr. W in since proxy lom oppointing N as proxy was not cleposiled wilh the company within the
favour of Mr. N he prescribed
shal be rejected fime,i.e. otleast 48 hoUIs belore the GM
Mr. M shall be allowed as proxy since, by reason of rejection of proxy orm in favour of Mr. N, only one valid proxy form in fe
for Mr. W in the GM M has reached Ihe company wilhin Ihe prescribed time of at least 48 hours before the GM OfM
M.

May 2008 Whetherdepostofprowy54hours before he commencemenf of meeting validwnere

he ariglesreguire deposit of proxy torm60 hours betore the meeting? Sec 05
P7.14E. The Chairman of the
meeting of a company received a Proxy 54 hours before the time fixed for the start of the meeting. He ref
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 m
Decide, under the provisions of the
Ans.
Companies Act, whether the Proxy holder can compel the Chairman to admit the Proxy? neeting.
The retusal of the
since a proxy lodged wiih the compony 48 hours befOre the fime fixed for commencement
Chairman is nof valid valid:
of the meet.
since the time limit of 48 hours can be decreased, but cannot be
efing is
increased.
une 2009 semembereniled to inspect proxles on the day the AGMi scheduled to be held
CModitied Sec 105
P7.14F. Annual General
Meeting, of MGR Limited is convened on 28th December, 2013. Mr. J, who is a member of
the company on 28th the
December, 2013 and demands inspection of proxies company, approaches
under the Companies Act, 2013 in this lodged with the company. Explain the legal position as
Ans.
regard. stater
Mr. J is not entitled to
Since a member who intends i
inspect proxies at least 3 days before the
inspect the proxieshas to give notice fo the company of his
intention
commencement of the GM to do so
June 2009 (Modified) Whether rejection of.a proxy form
by a
P 7.14G. Golden Private Limited in is company valid?
its Articles of Association
Companies (Management and Administration) Rules, provides a format of 'proxy form' different from the one
prescribed under the
Sec. 105
form as prescribed under the 2014. S, a shareholder submits an
Companies (Management and Administration) Rules, 2014. The instrument appointing proxy fo the
is nof in the form as company in the
prescribed in Articles of Association of the company rejects the proxy on the
ground that it
Decide giving reasons. company. Is the rejection valid under the of provisions Companies Act, 2013?
Ans.
The rejection of
proxy form by the since a
company is not valid company cannot reject a proxy form if it is in the
(Form No. MGT-11 has been same form as may be
prescribed for appointment of proxy). prescribed
even though the
proxy fom used by the member
requirements specified in the ariicles of the does not comply with
any special
company.
Nov. 2007 Conceptof proxy where a body corporote.and
P 7.14H. What is the
concept of proxy in relaiion to the aforeign.company ore mermbers
Companies Act, 2013, in the following cases: meetings ofa
Company? Decide the
appointment and
Sec. 105 and13)
() When a body corporate is a member rights of a
proxy, under the
in the company.
(i) When a foreign company is a
Ans.
member in the
company.
() A body corporate is entited to
as per ihe
appoint a representative provisions of Sec. 113.
Such representative shail be entitled to exercise the
(i) The forelgn ight to vote by proxy) on behalí of same rights and
company is also entitled since the such body corporate, as if it were an powers (including the
toappoint a representative as per provisions of Sec. 113 are applicable not individual member.
Sec. 113 Companies; only to companies but also to forelgn
since Sec. 13 uses the words "a
ihis Act body corporate (whether
or not)". a
company within the meaning
7.15 REPRESENTATIYE
Representation of the If the President of India or Governor ( S e c . 112 and 113)
President and authorise such person as he of a State is a member
in any
Governors thinks fit to act as his company, he may
meeting of such company. representative any GM or class
al
(Sec. 112) A
person appointed as a
powers (including the representative is entitled to
exercise the same rigils and
of the company. right to vote
by proxy and postal
ballot) as if he were a memo
C h a p . -
RepresentAtion o f uy coporate is a
mmember in any conpany, it may, by a resoluton o Board
o1 dircctOrs, authorise such
s af meetings
copor'ations person as it thinks fit to act as its represcntative al any
Or class
olcompanies
meeting such compamy
of
Aperson appomted as a
rcpresentative is cntitled to cxcrCIse Ine
member
e ight t0 vote by proxy and postal ballof) as if he were a
(SeC. I 1 3 )
n
of the company.

USE OE YOTES DIFFERENTLY ec.106

fakcn. need
a member / proxy not
ing
(na poll
or
his votes;
all
(a)
use
way all the votes he usces.
cast
in thesame
(b)
RESTRICTIONS ON VOTING RIGHT OF MEMBBRS (Sec.106
17
Manner of imposing
Express provision in the articles is required to restrict the voting rights or meiD

r e s t r i c t i o n s

Grounds imposing Valid grounds () Calls on shares or any other sum presently payablc by the memoer
have not been paid.
restrictions

(ii) Thecompany has, and has cxercised. any right of lien on shares.
otner
Any other ground A company shall not restrict the voting right of any member on any
ground.

mo5Whether restriction on votingighton.lhe oround of non-paymentolcoll moneyis valid? (sec 106

denied by the
Nov call money has not been paid, is
member of LS & Co. Ltd., holding some shares in his own name on which final
p7.17A. C. a
do not permit a member to vote
if he has not paid
at a generdl meeling on the ground that the articles of association
rompany voting righf
him.
the calls on
the shares held by
denial to C of his voting right.
with reference
to the provisions of the Companies Act, 2013 examine the validity of company's
Ans. of the grounds specitied u/s
106
(Viz.
The decision of the Since ihe member is restrained from exercising his voting right on one

Compony is valid
Non-paymeni of calls on shares)
is conlained in the articles.
since ihe ground restricting voting righi

his shares for the (Sec 104)

une 2009 Whether o member can vote in a GM if he has not held
period preseribed.underthe ariicles? those shareholders would be entitled to vote whose names have been
there on the
F7.178. The articles of ABC Limited provlded that only Limited was holding 200 equity shares of ihe
months betore the date of the meeting.
X, a member, of the ABC entered
of Members for two The name of Y could not be
Regisier the date on whlch the meeting
was due.
Y before one month from attended the meeting but he was prohibited by
the
Company. X transferred his shares to of shares was pending. X
the application of transfer in the articles before
n fhe Regisier of Members as
shares for specified period as provided
on the ground
that he has not hold his
company from exercising his voting right his
fhe daie of the
meeting which X may be excluded from exercising
State also the grounds upon
whether X can exercise his voting right in the meeting?
ale
Vohing rights in the meeting of the shareholders.
Ans. ofner than the giounds specified u/s
oI a member on any ground
Xis entitled to resinct 1he voting righis
Since a Company cannof
Yote ai the GM nof held his shaNes lor 2 months, is not a
106 on the giOUnd
ihal a member has

Since the restriction of voting righi

specitied ground u/s 106.

ground ofnon paymentohcoll.moneyE Palek Sec 104

7 Whetherrestictionon voingright on lhe The company asked him fo
LKM Limited. At a general meeting
the shares. Due to some
pay the call money
final
of the shareholders, the
on

shares of company.
Unaveield 100 parily paid up unable fo pay the amount of call money to fhe a shareholder to vote if he has not paid ihe calls on the
choirme ucumsiances he was that the articles
do not permit
companies Act, 2013 decide
whether the
him to cast his vote on the ground Referring fo fhe
provIslons of the
shares owed Chairman.
the decision of the
Jcontested
Confention of nim.
Conlenti J is valid.
Ans. on onee O me gIOUnds specitied u/s 106 (viz.
non-
igi
ne exerciSing his voIing
restrained from
Valid
contention of J is not since he is
shares):
payment of calls orlicles
on in Ihe
is contcuriei
fing vofing right
*****

fhe ground restric

Since
 NOV2018Whether restiction onvoting ightonhe ground ofgon-payment or callmoney1s yalidhe grticles.donof Sec
Sec 106
eshctihe oting riehtot uchground
P7.17D. X a member ofLKM Ltd. is holding 250 shares.which are porty paid. The company held ts genera meeling yhere voting tight
him. Examine the validity of company's denial fo "X' with refereneeos
** claiming he has not paid the calls on the shares held by
denied foprovisions
relevant of the Companies Act, 2013, assuming that Articles of associalion of the Company do not restic! the vofingrigh ofsueci
such
members.
Ans.
The decision of LKM Lid. is sincethe member can be restrcined irom exercising his voting right on the ground of non-payrment of
t co
not valid on shares only if the articies of the company contain such a ground:
is not coniained in the arlicles of LKM Lid.
SInce iheground restricting voting righl

18MANNER OF VOING IN GM Sec Sec 107and109

1. Voting by show At a GM,resolution shall be decided on a show of hancds, unless
a

of handis (a) a poll is demanded u/s 109; or

Sec. 107) (b) voting is carried out clcctronically u/s 108.

A declaration of the result of a resolution (that the resolution has been passed or failed, as the
case may be) on a show of hands by the chairman and an entry to that effect in the minutes

book shall be conclusive evidence of such fact. No proof of number of votes cast in favour of
and against the resolution is required.

2. Voting by poll The result of the poll is deenmed to be the decision of the meeting on the resolution on which the
poll is taken. The provisions relating to poll are contained in Sec. 109 read with Sec. 106.
(Sec. 109)