Extra-Ordinary General Meeting

INTRODUCTION : -
• Sometimes, matters requiring immediate consideration by members may
crop up whose consideration cannot be deferred till the next AGM . To meet
such emergencies, the companies can provide for holding of emergency
meetings of the members which are known as Extra-ordinary General
Meetings.
• Regulation 42 of Table F provides that all general meetings, other than AGM,
shall be called as EGM.
• All the business which can be transacted at an EGM shall be deemed special.
• This meeting is called to transact business decisions which cannot be
postponed till the next Annual General Meeting.
 Who may call EGM?
Section 100 provides that EGM may be convened/called by :-
 By the Board of Directors:- As per Section 100(1) Board may, whenever it deems fit, call an EGM by passing
an ordinary resolution at a Board of Directors meeting. The Board of Directors must give a clear 21 days
notice before holding an EGM.

 By the Directors on Requisition:-Directors must convene an EGM upon receiving a requisition or written
demand from :-

 In case of Company having share capital: The requisition shall be made by the members holding
10 % or more of the paid up share capital & are entitled to vote on that occasion at the said
EGM.
 In case of Company having no share capital: The requisition shall be made by the members who
have at least 10% of the total voting power & are entitle to vote on that occasion at the said
EGM.
 By the Requisitionists themselves:- If the Board of Directors fails to call an extra ordinary general
meeting within 45 days of the deposit of a valid requisition, then the meeting may be called by
Requisitionists themselves. The EGM called by the requisitionists must be held within 3 months of
the date of deposit of the requisition.
 By National Company Law Tribunal (NCLT):- If for any reason it is impracticable to call or conduct an
EGM, the Company Law Board may, either of its own motion or on the application of any director or
any member entitled to vote, order a meeting to be called. It can be convened on a public holiday
and at a place other than the registered office of the company or the city in which the registered
office is situated.
 Important Cases of EGM
 A.D. Chaudhary v. Mysore Paper Mills Ltd:- It was held that the BOD is right in
refusing to call & hold an EGM on the requisition of members where there is an
order of injunction, restraining the company from holding any meeting is in force.

 LIC of India v. Escorts Ltd. (1986):- It was held that as every shareholder has a right
to requisition an EGM , so he cannot be restrained from requisitioning an EGM &
he is not bound to disclose the reasons for the removal where the meeting get
held for the purpose of removing bunch of directors.

 Metal box India Ltd. (2001):- It was held it’s not necessary to held the
meeting at the registered office so resolution passed at such meeting would
be equally valid as it held at registered office.
ANUBHAV SHARMA
 Meetings of Board of Directors
(section 173)

• Every company must hold the first meeting of its board of

directors within 30 days of its incorporation.
• Company must hold a minimum 4 board of directors meeting
in a year and gap between two meetings should not be
more than 120 days.
• One person company, small company and Dormant company
are required to hold at least one meeting in each half year
and gap between two meetings should not be less than 90
days.
 Notice of the meeting
• Section 173(3) provides that a notice of not less than 7 days is required to call
a meeting.
• In order to transact some urgent business, a meeting of the board can be
called by giving a shorter notice than that of 7 days provided at least one
independent director is present in the meeting.
• Every officer of the company who is responsible to give notice as per section
173, but fails to do so shall be liable to fined Rs 25000.
• Section 173(2) allows directors to participate in meeting either in person
or through video conferencing.
• Rules 4 of companies rules 2014,specifies matters which will not be dealt
with through video conferencing or other audio visual means.
 Quorum of the meeting
• The quorum for a meeting as per section 173 is one-third of its total strength or two
directors whichever is higher and the participation of directors by video conferencing
or by other audio visual means shall be counted for the purposes of quorum.
• SEBI’s Kotak committee on corporate Governance has specified that quorum for
meeting should be one third of the size of the board or 3 members, whichever is
higher, in the top 1000 listed entities by market capitalization by April 1, 2019 and in
the top 2000 listed entities by April 1, 2020.
• Unless a quorum is present the business transacted is void. It is to be noted that
quorum is required to be present throughout the meeting.
• If quorum is not present, the meeting shall automatically be adjouned to the same
day, next week at the same time.
 Time and place of meeting

• Meeting may be held at any time on any day,

including a public holiday.
• Meeting can be held at any place other than the
registered office of the company.
 Agenda of the meeting
• Any business can be transacted at board meeting.
• Company demands that the agenda containing business to be
transacted with short notes on each item should be circulated along
with the notice of at least one week before the date of the meeting.
• The agenda of meeting should be conveniently grouped and divided
so that minimum time and energy of the directors are consumed on
less important items. Routine items are generally placed in the
beginning and items which require detailed consideration are taken
up thereafter
 Passing a resolution by circulation
• According to section 175, the board or any of its committee may pass a
resolution by circulation only if,
• (a)-A draft has been circulated to all the directors, or the members of the
committee, at their addresses registered with the company.
• (b)-The resolution shall be deemed to be duly passed only if it has been
approved by a majority of the directors or members who are entitled to
vote on the resolution.
• (c)-The resolution passed shall be noted at a subsequent meeting of the
board or the committee, and made part of the minutes of such
meeting.
 Separate meetings of Independent Directors
• Independent directors are required to follow the code given in schedule IV of the act ad
per which
(1)- The independent directors of the company shall hold at least one meeting in a year,
without the attendance of non-independent directors.
(2)- All the independent directors of the company shall strive to be present at such
meeting.
(3)- The meeting shall:
(a)- Review the performance of non-independent directors.
(b)- Review the performance of the chairperson.
(c)- Assess flow of information between the company management and
the board.
• AMIT
 Requisites of a valid meeting
• The law provides certain provisions, which are supposed to be followed by the
company while holding various types of company meetings. A meeting must be called
conducted according to the provisions provided in the law & in AOA.
• If these provisions are not followed while convening & conducting the meeting, then
the whole proceedings of the meeting will be invalid. The following are the requisite
of a valid meeting.
Requisites

Appropriate Notice Quorum Chairman Minutes

authority
 AUTHORITIES FOR CONVENING
MEETING
1. Board of directors:
The Board of directors are empowered to convene every type of general
meeting of the members of the company.

2. Directors, on the requisition of members:

Sometimes, a requisition is made by the members of the company to call a
general meeting.

3. The Tribunal:
When the directors make a default in holding annual general meeting (AGM) of
company, the Tribunal may call or direct the calling of such meeting.
 Notice (Section 101 & 102)
 A communication to all those who are entitled to attend a meeting regarding the date, time ,
place and business of meeting.
 The things in connection with the notice have to be considered namely:-

a) Length of notice [Section 101(1)]

•A GM can be called by giving at least 21 days notice in writing or by
electronic mode
Proper notice •Date of issue of notice & date of meeting have to be in addition to
21 days

•A GM may be called even after giving a shorter notice if consent is given in writing
Shorter notice or by electronic mode by not less than 95% of the of the members entitled to vote
at such meeting
•The consent may be taken before or during or even after the meeting
 Contents of Notice & to whom
[Sec 101]
Contents • (a) Place , day & hour of the meeting
• (b) Business to be transacted thereat (i.e. special or an ordinary business)
[Sec101(2)]

• (a) Every member

Notice to Whom • (b) Legal representatives of the deceased member
[Sec101(3)] •
•
(c) Official assignees of the insolvent member
(d) Auditors

• Accidental omission to give notice shall not invalidate the

Omission to give proceedings at the meeting.
notice [Sec 101(4)] • Deliberate omission to give notice to even single member shall invalidate the
meeting.
Quorum of General Meeting [Sec 103]
• Quorum is the minimum number of members required to
be present at a GM of the company to validly transact
any business.
• In case of public company 5 members personally present
if the number of members as on the date of meeting is
not more than one thousand.
• In case of private company, two members personally
present.
• The purpose of ascertaining the quorum only members
present in person, and not by proxies are to be counted.
• The requirement of quorum is required to be satisfied at
the time when the meeting proceeds to business. Unless
the articles provide otherwise ,quorum is not required to
be present throughout the meeting.
 Consequences of absence of quorum [Sec
103(2)&(3)]
• Section 103(2): If the quorum is not present within half-an-hour from the time appointed for holding
a meeting of the company-
(a) The meeting shall stand adjourned to the same day in the next week at the same time & place, or to such other
date & such other time & place as the board may determine.

 In case of adjournment, notice is required to be given to the members: Thissec provides that where there is
adjournment or of change of day , time & place of meeting, the company is required to give not less than 3 days
notice to the members either individually or by publishing & advertisement in the newspaper which is in
circulation at the place where the registered of the company is situated

• Section 103(3) lays down that if at the adjourned meeting also , quorum is not present within half an hour from
the time appointed for holding the meeting, the members present shall constitute quorum.
• If no quorum is present there is no meeting & the proceedings are invalid so therefore any resolution passed at
that will be treated as invalid
5) Chairman of meeting (Sec 104)
• Chairman is the person who has been
designated or elected to preside over and
conduct the proceedings of a meeting .
• It provides that members shall be elect one
amongst themselves to be chairman by
show of hands .
• If a poll is demanded on the election of the
Chairman, it shall be taken immediately &
the chairman elected above shall continue
to be chairman of the meeting until the
other person get elected by poll.
 Appointment of Chairman under Articles

1) Regulation 45 of Table F : It provides that the chairman if any of the Board shall preside
as Chairman at every GM of the company.
2) Regulation 46 of Table F : if there is no chairman or he is not present within 15 minutes
after the appointed time of the meeting or is unwilling to act as a chairman of the
meeting, the directors present shall elect one among themselves to be chairman of the
meeting.
3) Regulation 47 of Table F : if at the meeting no director is willing to act as chairman or if
no director is present within 15 min after the appointed time of the meeting, the
members present should choose one among themselves to be chairman of the meeting
.
 Minutes
• Every company must keep minutes of the proceedings of general meetings
and meetings of the boards of directors and its committees.
Points that should noted:
• Pages of the minute book should have number and the minutes should
record within 30 days of the meeting.
• Posting or attaching papers to minute books are not allowed
• Minutes book should kept in the registered office of the company
• Access to minutes book should free of cost for the members during the
business hours at registered office of the company