Company & its

Management
Subject – Company Law II
Semester VI
Unit 4 to 8
Curated by – Prof. Shreya Madali
Board of a Company –
- A board of directors (BoD) is the governing body of a company, whose members
are elected by shareholders (in the case of public companies) to set strategy,
oversee management, and protect the interests of shareholders and
stakeholders.
- The board of directors of a public company is elected by shareholders.
- The board makes key decisions on issues such as mergers and dividends, hires
senior managers, and sets their pay.
- Board of directors candidates can be nominated by the company's nominations
committee or by outsiders seeking change.
- Boards may include the CEO and sometimes also the chief financial officer, as
well as nonexecutive and independent directors. It’s the job of the lead singer—
or CEO—to make sure the strategy is executed.
- In today’s rapidly changing business and societal landscapes, effective board
governance is more important than ever.
- In the past, boards mainly oversaw CEO succession and financial strategy, providing
support and approval for strategy proposed by management. But the environment
has changed.
- Today, the board’s involvement extends well beyond that: the modern board of
directors provides more proactive direction and oversight on strategy, risk and
opportunity management, sustainability, talent management, leadership
succession, organizational culture, and even brand management and marketing.
For publicly traded companies, boards typically comprise executive, nonexecutive,
and independent directors elected by shareholders. This is known as a one-tier
board structure.
Some organizations maintain a two-tier board structure with clear separation
between the management board and supervisory board. In this structure, overall
board responsibilities are generally very similar to any other board. One of the
differences, though, is that the management and supervisory boards in two-tiered
structures may not have access to the same information.
Meetings –
- The word “meeting” is not defined anywhere in the Companies Act. Ordinarily, a
company may be defined as gathering, assembling or coming together of two or
more persons (by previous notice or by mutual arrangement) for discussion and
transaction of some lawful business.
- A company meeting may be defined as a concurrence or coming together of at
least a quorum of members in order to transact either ordinary or special
business of the company
- Meeting is the congregation of several persons in a particular place for the
purpose of discussing some important matters and expressing their opinion on
the questions raised.
Definitions of Meetings –
Sharp vs. Dawes (1971) - meeting is defined as “An assembly of people for a
lawful purpose” or “the coming together of at least two persons for any lawful
purpose.”

P.K. Ghosh - “Any gathering, assembly or coming together of two or more persons
for the transaction of some lawful business of common concern is called meeting.”

K. Kishore - “A concurrence or coming together of at least a quorum of members

by previous notice or mutual agreement for transaction business for a common
interest is meeting.”
Characteristics of a Company Meeting –
1. Two or more persons (who are the members of the Company) must be present
at the meeting.
2. The assembly of persons must be for discussion and transaction of some
lawful business.
3. A previous notice would be given for convening a meeting.
4. The meeting must be held at a particular place, date and time.
5. The meeting must be held as per provisions/rules of Companies Act.
Kinds of Meetings –
I. Board meeting
II. Annual general meeting (AGM)
III. Extra ordinary general meeting
IV. Class meetings
Board of Directors’ Meeting (Section 173)
- The Act provides that the first Board meeting should be held within thirty days of the
date of incorporation.
- there shall be minimum of four Board meetings every year and not more 120 days
shall intervene between two consecutive Board meetings.
- In case of One Person Company (OPC), small company and dormant company, at least
one Board meeting should be conducted in each half of the calendar year and the
gap between two meetings should not be less than Ninety days.
- The Act requires that not less than seven days’ notice in writing
- Notice of Meetings of Board and its Powers shall be given to every director at the
registered address as available with the company.
- The notice can be given by hand delivery or by post or by electronic means.
- In case the Board meeting is called at shorter notice, at least one independent
director shall be present at the meeting.
- If he is not present, then decision of the meeting shall be circulated to all directors and
it shall be final only after ratification of decision by at least one Independent Director.
Requirements and Procedures for Convening and Conducting Board’s Meetings Directors may participate in
the meeting either in person or through video conferencing or other audio visual means.
- Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014 provides for the requirements and
procedures, in addition to the procedures required for Board meetings in person, for convening and
conducting Board meetings through video conferencing or other audio visual means:
- (1) Every Company shall make necessary arrangements to avoid failure of video or audio visual connection.
- (2) The Chairperson of the meeting and the officer in charge, shall take due and reasonable care:
(a) to safeguard the integrity of the meeting by ensuring sufficient security and identification procedures;
(b) to ensure the availability of proper video conferencing or other audio visual equipment or facilities for
providing transmission of the communications for effective participation of the directors and other
authorised participants at the Board meeting;
(c) to record the proceedings and prepare the minutes of the meeting;
(d) to store for safekeeping and marking the tape recording(s) or other electronic recording mechanism as
part of the records of the company at least before the time of completion of audit of that particular year;
(e) to ensure that no person other than the concerned director are attending or have access to the
proceedings of the meeting through video conferencing mode or other audio visual means; and
(f) to ensure that participants attending the meeting through audio visual means are able to hear and see
the other participants clearly during the course of the meeting, but the differently abled persons, may
make request to the Board to allow a person to accompany him.
(3) (a) The notices of the meeting shall be sent to all the directors in accordance with
the provisions of section 173 (3) of the Act.
(b) The notice of the meeting shall inform the directors regarding the option
available to them to participate through video conferencing mode or other audio
visual means, and shall provide all the necessary information to enable the directors
to participate through video conferencing mode or other audio visual means.
(c) A director intending to participate through video conferencing mode or audio
visual means shall communicate his intention to the Chairman or the officer in
charge.
(d) If the director intends to participate through video conferencing or other audio
visual means, he shall give prior intimation to that effect sufficiently in advance so
that company is able to make suitable arrangement in this behalf.
(e) The director, who desires, to participate may intimate his intention of
participation through the electronic mode at the beginning of the calendar year
and such declaration shall be valid for one calendar year.
(f) In the absence of any such intimation from the director, it shall be assumed that
(4) At the commencement of the meeting, a roll call shall be taken by the Chairperson when
every director participating through video conferencing or other audio visual means shall state,
for the record, the following namely :
(a) name;
(b) the location from where he is participating;
(c) that he can completely and clearly see, hear and communicate with the other participants;
(d) that he has received the agenda and all the relevant material for the meeting; and
(e) that no one other than the concerned director is attending or having access to the
proceedings of the meeting at the location
(5) (a) After the roll call, the Chairperson shall inform the Board about the names of persons
other than the directors who are present for the said meeting at the request or with the
permission of the Chairman and confirm that the required quorum is complete. Explanation : It
is clarified that a director participating in a meeting through video conferencing or other audio
visual means shall be counted for the purpose of quorum, unless he is to be excluded for any
items of business under any provisions of the Act or the Rules.
(b) The roll call shall also be made at the conclusion of the meeting and at the re-commencement
of the meeting after every break to confirm the presence of a quorum throughout the meeting.
(6) With respect to every meeting conducted through video conferencing or other
audio visual means authorised, the scheduled venue of the meeting as set forth
in the notice convening the meeting, which shall be in India, shall be deemed to
be the place of the said meeting and all recordings of the proceedings at the
meeting shall be deemed to be made at such place.
(7) The statutory registers which are required to be placed in the Board meeting
as per the provisions of the Act shall be placed at the scheduled venue of the
meeting and where such registers are required to be signed by the directors, the
same shall be deemed to have been signed by the directors participating
through electronic mode if they have given their consent to this effect and it is so
recorded in the minutes of the meeting.
(8) (a) Every participant shall identify himself for the record before speaking on
any item of business on the agenda.
(b) If a statement of a director in the meeting through video conferencing or other
audio visual means is interrupted or garbled, the Chairperson shall request for a
repeat or reiteration by the director.
(9) If a motion is objected to and there is a need to put it to vote, the Chairperson
shall call the roll and note the vote of each director who shall identify himself
while casting his vote.
(10) From the commencement of the meeting until the conclusion of such
meeting, no person other than the Chairperson, directors, Secretary and any
other person whose presence is required by the Board shall be allowed access to
the place where any director is attending the meeting either physically or
through video conferencing without the permission of the Board.
(11) (a) At the end of discussion on each agenda item, the Chairperson of the
meeting shall announce the summary of the decision taken on such item along
with names of the directors, if any, dissented from the decision taken by
majority.
(b) The minutes shall disclose the particulars of the directors who attended the
meeting through video conferencing or other audio visual means.
(12) (a) The draft minutes of the meeting shall be circulated among all the
directors within fifteen days of the meeting either in writing or in electronic
mode as may be decided by the Board.
(b) Every director who attended the meeting, whether personally or through video
conferencing or other audio visual means, shall confirm or give his comments,
about the accuracy of recording of the proceedings of that particular meeting in
the draft minutes, within seven days or some reasonable time as decided by the
Board, after receipt of the draft minutes failing which his approval shall be
presumed.
(c) After completion of the meeting, the minutes shall be entered in the minute
book as specified under section 118 of the Act and signed by the Chairperson.
Explanation - For the purposes of this rule, ‘video conferencing or other audio
visual means’ means audio-visual electronic communication facility employed
which enables all the persons participating in a meeting to communicate
concurrently with each other without an intermediary and to participate
effectively in the meeting.
Matters not to be dealt with in a Meeting through Video Conferencing or other
Audio Visual Means
- Rule 4 prescribes restriction on following matters which shall not be dealt with in
any meeting held through video conferencing or other audio visual means:
(i) the approval of the annual financial statements;
(ii) the approval of the Board’s report;
(iii) the approval of the prospectus;
(iv) the Audit Committee Meetings for consideration of accounts; and
(v) the approval of the matter relating to amalgamation, merger, demerger,
acquisition and takeover.
Penalty –
Every officer of the company who is duty bound to give notice under this section if
fails to do so shall be liable to a penalty of twenty five thousand rupees.
Quorum for Board Meetings: Section 174
- One third of total strength or two directors, whichever is higher, shall be the quorum for
a meeting
- If due to resignations or removal of director(s), the number of directors of the company is
reduced below the quorum as fixed by the Articles of Association of the company, then,
the continuing Directors may act for the purpose of increasing the number of Directors to
that required for the quorum or for summoning a general meeting of the Company.
- It shall not act for any other purpose.
- For the purpose of determining the quorum, the participation by a director through
Video Conferencing or other audio visual means shall also be counted.
- If at any time the number of interested directors exceeds or is equal to two-thirds of the
total strength of the Board of directors, the number of directors who are not interested
and present at the meeting, being not less than two shall be the quorum during such
time.
- The meeting shall be adjourned due to want of quorum, unless the articles provide that
it shall be held the same day at the same time and place in the next week or if the day is
National Holiday, the next working day at the same time and place.
General Meetings:
- General meetings of the members provide a platform to express their with regard to the management
of the affairs of the company.
- one such meeting every year is compulsory.
- Holding of more general meetings is left to the choice of the management or to a given percentage of
shareholders to exercise their power to compel the company to convene a meeting.
- A company is required to hold meetings of the members to take approval of certain business items, as
prescribed in the Act.
- The meeting to be held annually for seeking approval to certain ordinary business (“Ordinary
Business” means business to be transacted at an Annual General Meeting relating to (i) the
consideration of financial statements, consolidated financial statements, if any, and the reports of the
Board of Directors and Auditors; (ii) the declaration of any dividend; (iii) the appointment of Directors
in the place of those retiring; and (iv) the appointment or ratification thereof and fixing of
remuneration of the Auditors) is called Annual General Meeting.
- A meeting to be held to transact any business other than ordinary business i.e. for special business
(“Special Business” means business other than the Ordinary Business to be transacted at an Annual
General Meeting and all business to be transacted at any other General Meeting) is called
extraordinary general meeting.
- In certain cases, a company may have to hold a meeting of the members of a particular class of
members
Annual General Meeting (section 96)
- provides that every company, other than a one person company is required to hold an annual general
meeting every year.
- the Board shall, every year, convene or authorize convening of a meeting of its members called the
Annual General Meeting to transact items of ordinary business specifically required to be transacted at
an annual general meeting as well as special business, if any. – Section 102 (2)
- If the Board fails to convene its Annual General Meeting in any year, any Member of the company may
approach the prescribed authority, which may then direct the calling of the Annual General Meeting of
the company.
- First annual general meeting of the company should be held within 9 months from the closing of the
first financial year.
- it shall not be necessary for the company to hold any annual general meeting in the year of its
incorporation
- Subsequent annual general meeting of the company should be held within 6 months from the date of
closing of the relevant financial year.
- The gap between two annual general meetings shall not exceed 15 months
- for listed entities, SEBI vide recent notification provided that the top 100 listed entities by market
capitalization, determined as on March 31st of every financial year, shall hold their annual general
meetings within a period of five months from the date of closing of the financial year.
Extension of validity period of AGM
- In case, it is not possible for a company to hold an annual general meeting
within the prescribed time, the Registrar may, for any special reason, extend
the time within which any annual general meeting shall be held. Such
extension can be for a period not exceeding 3 months.
- No such extension of time can be granted by the Registrar for the holding of
the first annual general meeting.
Business to be transacted at annual general meeting:[Section 102] – Ordinary
Business
Section 102(2)(a) provides that all other businesses transacted at an AGM except
the following are special business:
(i) the consideration of financial statements and the reports of the Board of
Directors and auditors;
(ii) the declaration of any dividend;
(iii) the appointment of directors in place of those retiring;
(iv) the appointment of, and the fixing of the remuneration of, the auditors.
Place for holding an annual general meeting
- AGM is to be called during business hours, that is, between 9 a.m. and 6 p.m.
on any day that is not a National Holiday.
- It should be held either at the registered office of the company or at some
other place within the city, town or village in which the registered office of the
company is situated.
- AGM of an unlisted company may be held at any place in India if consent is
given in writing or by electronic mode by all the members in advance.
- In case of Government Company, the Central Government may approve such
other place for holding AGM, if the place is other than registered office.
- In case of Section 8 Company, the time, date and place of each AGM are decided
upon before-hand by the Board having regard to the directions, if any, given in
this regard by such company in the general meeting
- “National Holiday” for this purpose means and includes a day declared as
National Holiday by the Central Government.
Penalty for default in holding the annual general meeting [Section 99]
- provides that if any default is made in complying or holding a meeting of the
company, the company and every officer of the company who is in default shall
be punishable with fine which may extend to one lakh rupees and in case of
continuing default, with a further fine which may extend to five thousand rupees
for each day during which such default continues.
- If any default is made in holding the annual general meeting of a company, any
member of the company may make an application to the Tribunal to call or
direct the calling of, an annual general meeting of the company and give such
directions as the Tribunal thinks expedient.
 Extra-Ordinary General Meeting (Section 100)
- There are so many matters relating to the business of a company, which require
the approval or consent of members in general meeting.
- It is always not possible for consideration of such matters to wait until the next
annual general meeting.
- The articles of association of the company make provisions for convening
general meeting other than the annual general meeting.
- All general meetings other than annual general meeting are called extra-
ordinary general meetings (EGM).
Following are the key provisions, regarding calling and holding of an extraordinary general meeting:
(1) By the Board Suo motu [Section 100 (1)]
- The Board may, whenever it deems fit, call an EGM of the company.
- An extraordinary general meeting of the company, shall be held at any place in India.
- An extraordinary general meeting of a company which is wholly owned subsidiary of a company incorporated
outside India, may be held outside India.
(2) By Board on requisition of members [Section 100 (2)]
- The Board shall, call an extraordinary general meeting on receipt of the requisition from the following number of
members:
(a) in the case of a company having a share capital:
- members who hold, on the date of the receipt of the requisition, not less than one-tenth of such of the paid-up
share capital of the company as on that date carries the right of voting;
(b) in the case of a company not having a share capital:
- members who have, on the date of receipt of the requisition, not less than one-tenth of the total voting power of all
the members having on the said date a right to vote.
Matter set out for consideration in requisition:
- The requisition made as above, shall set out the matters for the consideration of which the meeting is to be called
and shall be signed by the requisitionists and sent to the registered office of the company.
Time period for calling the meeting:
- The Board is required to proceed to call a meeting within 21 days from the date of receipt of a valid requisition, to
(3) By requisitionists [Section 100(4)]
(1) If the Board does not within 21 days from the date of receipt of a valid requisition in regard
to any matter, proceed to call a meeting for the consideration of that matter on a day not later
than 45 days from the date of receipt of such requisition, the meeting may be called and held
by the requisitonists themselves.
- However in such case, the meeting should be held within a period of 3 months from the date
of the requisition.
- Reimbursement of expenses in calling a meeting: Reasonable expenses incurred by the
requisitionists in calling such a meeting shall be reimbursed by the company to the
requisitionists.
- The company in turn recovers such expenses from any fee or other remuneration under
section 197 payable to such of the directors who were in default in calling the meeting.
- In case, the quorum is not present within half-an-hour from the time appointed for holding a
meeting called by requisitionists, the meeting shall stand cancelled. [Section 103(2)(b)]
(2) The notice shall specify the place, date, day and hour of the meeting and shall contain the
business to be transacted at the meeting - A Meeting called by the requisitionists shall be held
either at the registered office of the company or at some other place within the city, town or
village in which the registered office of the company is situated. Such meeting shall be held on
(3) Notice to be signed: The notice shall be signed by all the requistionists or by a requistionists
duly authorized in writing by all other requistionists on their behalf or by sending an electronic
request attaching therewith a scanned copy of such duly signed requisition.
(4) No explanatory statement annexed to the notice: No explanatory statement as required under
section 102 needs to be annexed to the notice of an extraordinary general meeting convened by
the requistionists and the requistionists may disclose the reasons for the resolution(s) which
they propose to move at the meeting.
(5) Serving of notice of the meeting: The notice of the meeting shall be given to those members
whose names appear in the Register of members of the company within three days on which the
requistionists deposit with the Company a valid requisition for calling an extraordinary general
meeting.
(6) No meeting convened: Where the meeting is not convened, the requistionists shall have a
right to receive list of members together with their registered address and number of shares
held and the company concerned is bound to give a list of members together with their
registered address made as on twenty first day from the date of receipt of valid requisition
together with such changes, if any, before the expiry of the forty-five days from the date of receipt
of a valid requisition.
(7) Mode of giving notice: The notice of the meeting shall be given by speed post or registered
post or through electronic mode. Any accidental omission to give notice to, or the non-receipt of
(4) By Tribunal [Section 98]
- Section 98 provides that if for any reason it is impracticable to call a meeting of a
company or to hold or conduct the meeting of the company, the Tribunal may,
either suo-motu or on the application of any director or member of the
company who would be entitled to vote at the meeting:
(a) order a meeting of the company to be called, held and conducted in such
manner as the Tribunal thinks fit; and
(b) give such ancillary or consequential directions as the Tribunal thinks
expedient, including directions modifying or supplementing in relation to the
calling, holding and conducting of the meeting, the operation of the provisions
of this Act or articles of the company.
- Such directions may include a direction that one member of the company
present in person or by proxy shall be deemed to constitute a meeting.
- Meeting held pursuant to such order shall be deemed to be a meeting of the
company duly called, held and conducted.
Section 103 - Quorum for meetings:
(1) Unless the articles of the company provide for a larger number,—
(a) in case of a public company ,—
(i) five members personally present if the number of members as on the date of
meeting is not more than one thousand;
(ii) fifteen members personally present if the number of members as on the date
of meeting is more than one thousand but up to five thousand;
(iii) thirty members personally present if the number of members as on the date
of the meeting exceeds five thousand;
(b) in the case of a private company , two members personally present, shall be
the quorum for a meeting of the company.
Non-Fulfillment of Quorum Requirement
- If the quorum is not present within half an hour of the time set for the meeting
to begin, then the following options will be applicable:
• The meeting will be adjourned, and it shall be held on the same day and at the
same time next week, or any other date and time as the Board may determine.
• If the meeting is adjourned then the date, time and place of the meeting will be
notified personally or via advertisement.
• The advertisement must be published in both English as well as the vernacular
language in a newspaper which is in circulation at a place where the registered
office of the company is situated.
• The meeting, if called by requisitionists under Section 100, shall stand
cancelled.
- Under sub-clause (3), if the quorum is not present at the adjourned meeting,
then the members present shall be the quorum.
Passing of a Resolution
- A proposed resolution is called a motion until it receives approval to be passed.
- Once the necessary approval is obtained it becomes a resolution.
- When it comes to matters requiring a special resolution, the same has to be included in the agenda of the
meeting which is given at the time the notice of the meeting.
- For matters that do not require a special resolution as per the Act, motions that arise out of negotiation may
be allowed as well.
- each resolution is generally introduced by one member and thereafter seconded by another member.
- The motion that is under consideration may be amended during the debate.
- There can be any number of amendments to the main motion. However, an amendment can be amended
only once.
- Where a motion carries a large number of amendments, after obtaining common consent, a new motion
may be passed, incorporating all the amendments, and the old motion may be withdrawn.
- Requisite forms are required to be filed mandatorily with the Registrar of Companies within 30 days of the
resolution being passed, where the resolution is a special resolution, especially.
Attachments include:-

– Copy of the resolution passed.

– An explanatory statement under section 102 of the Companies Act, 2013.
– Copy of the Articles of Association (where any change is made).
Section 114 relates to Ordinary and Special Resolution
Ordinary Resolution
- an ordinary resolution is a resolution passed by the shareholders of a company by a simple or bare
majority (for example more than 51% of the vote) either at a convened meeting of shareholders or by
circulating a resolution for signature.
A resolution shall be an ordinary resolution if the notice required under this Act has been duly given and
it is required to be passed by the votes cast, whether on a show of hands, or electronically or on a poll,
as the case may be, in favour of the resolution, including the casting vote, if any, of the Chairman, by
members who, being entitled so to do, vote in person, or where proxies are allowed, by proxy or by
postal ballot.
This type of resolution is passed for the conduct of ordinary business matters at the AGM such as:-
Adoption of the financial statements
Declaration of dividend
Appointment of directors
Appointment of auditors and their remuneration
- The votes cast in favour of the resolution must exceed the votes cast against it.
- a simple majority in favour of the motion shall allow the resolution to be passed.
- consent of at least 51% of the members must be obtained to have a valid resolution passed.
- votes of the members eligible to vote will be the ones considered for the count.
 Special Resolution
- A resolution shall be a special resolution when:
(a) the intention to propose the resolution as a special resolution has been duly
specified in the notice calling the general meeting or other intimation given
to the members of the resolution;
(b) the notice required under this Act has been duly given; and
(c) the votes cast in favour of the resolution, whether on a show of hands, or
electronically or on a poll, as the case may be, by members who, being entitled
so to do, vote in person or by proxy or by postal ballot, are required to be not
less than three times the number of the votes, if any, cast against the
resolution by members so entitled and voting.
- Notice of the meeting must have been served to all the members & has to specifically
mention on its agenda of the passing of a special resolution.
- for a special resolution to be passed at a General Meeting, a supermajority is
required in favor of it.
- Supermajority refers to at least 75 percent of the members voting in favor of the
resolution.
- The votes of the members eligible to vote will be the ones considered for the count.
- Some of the matters that require a special resolution are:-

Amendment of the Articles of Association.

Issue of sweat equity shares.
Change in the registered office of the company.
Reduction of share capital.
Removal of an auditor before the expiry of his term.
Buyback of shares.
Appointment of more than 15 directors.
Loans and investments by the company.
Resolutions requiring Special Notice (Section 115)
- Section 115 provides that where, by any provision contained in this Act or in the
articles of a company, special notice is required of any resolution, notice of the
intention to move such resolution shall be given to the company by such number
of members holding not less than 1% of total voting power or holding shares on
which such aggregate sum not exceeding `5,00,000/- as may be prescribed has
been paid-up
- Provisions contained in the Act requiring special notice: The matters in respect of
which special notice is required are:
(a) A resolution for appointment of a person as auditor at the annual general
meeting other than the retiring auditor for providing expressly that the retiring
auditor shall not be re-appointed [Section 140(4)];
(b) A resolution for removing a director before the expiry of the period of his
office and appointing someone in the place of the director so removed [Section
169(2)].
Procedure for special notice:
(A) Signing of special notice:─A special notice is required to be given to the company shall be
signed, either individually or collectively by such number of members holding not less than
one percent of total voting power or holding shares on which an aggregate sum of not
more than five lakh rupees has been paid up on the date of the notice.
(B) Sending of notice to the company:─ Such notice shall be sent by members to the company
not earlier than three months but at least 14 days before the date of the meeting
(C) On receipt of notice by the company:─ The company shall immediately after receipt of the
notice, give its members notice of the resolution at least seven days before the meeting,
exclusive of the day of dispatch of notice and day of the meeting, in the same manner as it
gives notice of any general meetings.
(D) Publication of notice:─ Where it is not practicable to give the notice in the same manner as
it gives notice of any general meetings, the notice shall be published in English language in
English newspaper and in vernacular language in a vernacular newspaper, both having
wide circulation in the State where the registered office of the Company is situated.
- Such notice shall also be posted on the website, if any, of the Company.
- Such notice shall be published at least seven days before the meeting, exclusive of the day of
publication of the notice and day of the meeting
Resolutions and Agreements to be filed with the Registrar
- Section 117 provides that a copy of every resolution and an agreement in
respect of matters specified therein together with the explanatory statement
shall be filed with the Registrar, within thirty days of its passing or making
thereof.
- The Registrar shall register the same, and in case of any default, a company and
every officer who is in default including the liquidator shall be punishable with
fine which shall not be less than [fifty thousand rupees] but which may extend
to five lakh rupees.
VOTING
- Denotes a method by which a person expresses his/her wish or opinion in an
authorized formal way or a mechanism through which the wishes of persons are
ascertained in relation to a particular matter.
- It reflects the wishes of the meeting on a particular matter.
- If a motion gets support of the required members in a meeting, it becomes a
resolution
Types of Voting
1. Voting by Show of hands
2. Voting on poll
3. Voting By Postal ballot
4. Voting Through Electronic Means
VOTES BY SHOW OF HANDS
- Section 107 -
(1) At any general meeting, a resolution put to the vote of the meeting shall, unless a poll is demanded
under section 109 or the voting is carried out electronically, be decided on a show of hands.
(2) A declaration by the Chairman of the meeting of the passing of a resolution or otherwise by show of
hands under sub-section (1) and an entry to that effect in the books containing the minutes of the meeting
of the company shall be conclusive evidence of the fact of passing of such resolution or otherwise
- In voting by show of hands proxies cannot vote unless the articles provided therefore - Proxies cannot
vote by show of hands In the case of voting by show of hands, only members who are personally present
can exercise the voting. The proxies do not have such rights unless the articles specifically provide for
that
- Votes of members personally present will be counted on a show of hands.
- One Member one vote by show of hands In the case of voting by Show of hands- every member has right
to cast only one vote, irrespective of the number of shares he holds.
- In a voting by show of hands, the chairman at the time of putting a motion for voting, asks the members,
who are in the favor of the motion, to raise their hands. The number of such persons will be counted.
- Similarly, The chairman will further ask the members, who are against the motion, to raise their hands and
their number of persons voting against, the motion will be deemed to have been carried and the
chairman will accordingly announce the result.
VOTING IN GENERAL MEETING BY POLL
- Voting by poll means a system in which ballot papers are distributed among the members
present at the meeting, in person or by proxy, to participate in the voting.
- All the members in person or by proxy at a meeting have the voting right in a poll in proportion
to the number of shares held by each of them.
- According to the provision of section 109 of the Companies Act 2013, a poll may be demanded
either Before or on the declaration of the result of voting by show of hands. However, the
chairman has power to order for a poll at his own motion.
- 109(1) states that the chairman shall order for a poll, when a demand is made by members
specified below:-
(a) In the case of a company having share capital, by any member or members (present in person
or proxy) and holding shares for a paid up value of Rs. 500,000 or more or members having
voting right of not less than 1/10th of the total voting power.
(b) In the case of any other company, any member or members present in person or proxy
holding not less than 1/10 of the total voting power has a right to demand on poll.
- Withdrawal of demand for poll - The person or persons who demanded a poll may withdraw the
demand at any time, with the permission of the chairman.
VOTING BY POSTAL BALLOT
- Postal Ballot describes the method of voting in which ballot papers are dispatched to
the members of the company and such papers are returned to the company by post
- Section 110 of the Companies Act, 2013 provides a mechanism for passing of
resolution by postal ballot. A company-
(i) shall, in respect of such kind of business as the Central Government may, by
notification, declare to be transacted only by means of postal ballot; and
(ii) may, in respect of any kind of business, other than ordinary business and any
business in respect of which director and auditors have a right to be heard at any
meeting, transact by means of postal ballot,
(iii) in such manner as may be prescribed, instead of transacting such business at a
general meeting.
- Applicability on companies for passing of resolution by Postal Ballot - Proviso to Rule
22 of the Companies (Management and Administration), Rules, 2014, Provides that
One Person Company and other companies having member upto 200 are not
required to transact any business through postal ballot.
VOTING THROUGH ELECTRONIC MEANS
- Section 108 provides that the Central Government may prescribe the class or
class of companies and manner in which a member may exercise his right to
vote by the electronic means.
- According to Rule 20(1) of the Company (Management and Administration)
Rules, 2014, every listed company or a company having not less than 1,000
shareholders shall provide to its members facility to exercise their right to vote
at general meeting by electronics means.
- Rule 20(3) - Members exercise their right to vote through electronic means and
thereafter company shall pass the resolution in accordance with the normal
provisions of the Act.
Prior requirements of E-Voting Rule 20(4)
1. A notice of the meeting shall be sent to all the members, directors, auditors of the Company
either- a. by registered post; b. through email; c. by courier
2. Notice shall also be placed on the website of the company;
3. Contents of the meeting;
a. Notice shall state that the company is providing facility of e-voting system and business may
be transacted through such voting;
b. facility for voting, through electronic voting system or ballot or polling paper shall also be
made available at the meeting and members attending the meeting who have not already cast
their vote by e-voting shall be able to exercise their right at the meeting;
c. the members can cast in remote e-voting and can attend the meeting but cannot vote at the
meeting.
4. Notice shall-
d. state the process and manner for voting by electronic means;
e. Time period during which the votes may be cast by remote e-voting;
f. Login ID details;
g. Generating or receiving the password and for casting of vote in a secure manner;
5. Advertisement to be given at least 21 days before the days before the date of general meeting-
a. at least in one vernacular newspaper in the vernacular language of the district in which the registered office of the
company is situated and having a wide circulation in that district; and
b. at least once in English language in an English newspaper having country-wide circulation and specifying in the said
advertisement inter alia.
The following aspects shall be covered namely:-
1. Statement that business may be transacted through E-Voting;
2. The time schedule of the e-voting;
3. End time of the meeting;
4. cut-off
5. the manner for obtaining e-mail ID and Password;
6. A statement that beyond the specified time the remote e-voting shall not be allowed;
7. Manner for providing e-voting facility to the member presents at the meeting;
8. even if the member exercises his vote through e-voting then member may also participate in the meeting but he cannot
vote at the meeting;
9. members whose name mentioned in the Register of Members may avail the facility through remote e-voting or E-voting
at the meeting.
10. website address of the Company;
11. Particulars of person responsible to address the grievances connected with facility for voting by emails.
12. Time of e-voting facility
13. remote e-voting shall remain open for not less than thee days and shall close at 5.00 p.m. on the date Preceding the
14. At the end of the remote e-voting period, the facility shall be blocked. Provided that if the e-voting facility
provided by company at the General meeting, the said facility shall remain in operation till the resolutions are
considered and voted upon in the meeting. Only those members who are entitled to vote at the meeting and
have not voted during remote e-voting.
15. Appointment of scrutinizer - The BOD shall appoint one or more scrutinizer, The scrutinizer may be CA in
Practice, CWA in practice, CS in practice or an Advocate, or any other person who is not in employment of the
company and is a person of repute who, in the opinion of the Board can scrutinse the voting and remote e-
voting in a fair and transparent manner.
16. Function of Scrutinizer - After conclusion of the meeting, the scrutinizer shall-
a. First count the votes cast at the meeting;
b. unblock the votes cast through remote e-voting in presence of at least 2 witnesses not in the employment
of the Company, not later than three days of conclusion of the meeting
17. The result shall be declared by the chairman or person authorized.
18. Register to be maintained by the scrutinizer - He shall maintain either electronically or manually a register to
record of -
c. the assent or dissent received,
d. mentioning the particulars of name, address, folio number or client ID of the members,
e. number of shares held by them, nominal value of such shares
f. and whether the shares have differential voting rights;
19. All the documents and register shall be in the custody of the scrutinizer - It
shall remain in the safe custody of the scruitniser until the Chairman considers,
approves and signs the minutes and there after, the scrutiniser shall hand over
the register and other related papers to the company.
20. Result of the voting shall be on the website of the company - Result along
with the report of the scrutinizer shall be placed on the website of the company.
21. In case company is listed the same shall be forwarded to the concerned stock
exchange or exchanges and stock exchange shall place the same on its website.
22. The resolution shall be deemed to be passed on the date of the relevant
general meeting if requisite majority has been received.
Proxies as per the Companies Act 2013
- Section 105 of Companies Act, 2013 read with Rule 19 of the Companies
(Management and Administration) Rules, 2019.
Member may appoint proxy Section 105(1) - Member of the company entitled to
attend the meeting and vote at the meeting shall have a right to appoint another
person as a proxy to attend and vote at the meeting on his behalf.
1st Proviso to section 105(1) - Proxy shall have not any right to speak at the
meeting and shall have right to vote except on a poll.
2nd Proviso to section 105(1) - Unless AOA of the company otherwise provided,
Section 105(1) shall not applicable to company having no share capital.

Limits for appointment as a proxies - 3rd Proviso to section 105(1) - Person

appointed as a proxy shall act on behalf of such no. of member(s) not more than
50 members.
Rule 19 of the Companies (Management and Administration) Rules, 2019
a. In case of Section 8 Company - no member of this company shall have right
to appoint proxy unless shall other person is also member of such company;
b. Maximum 50 No. of members on behalf of whom the a person can be
appointed as a proxy and holding in aggregate maximum 10% of total share
capital carrying voting rights.
c. Proxy form shall be in form MGT-11.

Statement in the Notice of Meeting Section 105(2) - A prominent reasonable

statement that a member is entitled to attend and vote, having right to appoint a
proxy; or where that is allowed, one or more proxies, to and vote instead of
himself and a proxy need not to be a member;
Penalty in case of contravention - Section 105(3) - In case of contravention of section
105(2), then every officer in default of the company shall be punishable with Penalty
which shall not be less than Rs. 5000.
Deposit of Form - Section 105(4) - 48 hrs before the company meeting, for depositing
with the company or any other person any instrument stating the appointment of a proxy
or any other document showing the validity or otherwise relating to appointment that
may be effective at such meeting,
Invitation to appoint Proxy - Section 105(5) - invitation to appoint proxy, a person or no.
of persons specified in the invitation are issued to any member entitled to have a notice
of the meeting sent to him and to vote there at by proxy; every officer of the company
who knowingly issues the invitations as aforesaid or willfully authorizes or permits their
issue shall be punishable with fine which may extend to Rs. 1,00,000
Proviso to section 105(5) - An officer shall not be punishable under this sub-section by
reason only of the issue to a member at his request in writing of a form of appointment
naming the proxy, or of a list of persons willing to act as proxies, if the form or list is
available on request in writing to every member entitled to vote at the meeting by proxy.
Section 105(6) - Document appointing proxy-
a. shall be in writing;
b. signed by the member appointing proxy or his attorney duly authorized by
him or in case appointer is any body corporate, be under its seal or be signed
by an officer or an attorney duly authorized by it.
c. Proxy form shall be in form MGT-11. Section 105(7)

Inspection of Proxy Form - Section 105(8) - During the period beginning 21-24
hours before the time fixed for the commencement of the meeting and ending
with the conclusion of the meeting, ROC/such other officers shall inspect the
proxies forms filed, at any time during the business hours of the company,
provided not less than three days’ notice in writing of the intention so to inspect
is given to the company.
- Clause 105 - This clause corresponds to section 176 of the Companies Act, 1956
and seeks to provide that a member who is entitled to attend and vote can
appoint another person as a proxy to attend and vote at the meeting on his
behalf.
- However, proxy shall not have the right to speak at a meeting
- The term “proxy” has been used to denote both the instrument and the person
appointed through the instrument. The term is not defined in the Act.
- However, ”Proxy” means an instrument in writing signed by a Member,
authorising another person, whether a Member or not, to attend and vote on
his behalf at a Meeting and also where the context so requires, the person so
appointed by a Member.
- Black’s Law Dictionary defines the term “proxy” as
“1. One who is authorized to act as a substitute for another; esp., in corporate law,
a person who is authorized to vote another’s stock shares.
2. The grant of authority by which a person is so authorized.
Deposit of proxy instrument
- proxies shall be deposited with the company either in person or through post.
- The proxies are to be deposited not later than 48 hours before the
commencement of the meeting in relation to which they are deposited.
- A proxy shall be accepted on a holiday if the last date by which it could be
accepted is a holiday.
- Any provision in the articles of a company which specifies or requires a longer
period for deposit of proxy than 48 hours before a meeting of the company shall
have effect as if a period of forty-eight hours had been specified in or required
for such deposit. Hence, the provisions of the Act will override the provisions
of the articles.
Rights of the proxy:
1. Attending meeting
2. Voting on poll.

Disabilities of proxy:
- A proxy has no right to speak at the meeting.
- A proxy cannot be a chairman in the meeting.
- He will not be counted in quorum.
- He cannot vote by show of hands
Rupak Gupta v. U.P Hotels (2016)
Facts of the Case
- In the present case, Petitioner is one of the Joint Managing Director of M/s U.P.
Hotels Limited (herein after referred to as Company).
- The other Joint Managing Director (hereinafter referred to as ‘Defendant’) called
the board meeting on June 04, 2016 for the appointment of Company Secretary
and Independent Director.
- Petitioner was travelling overseas from June 01, 2016 to June 14, 2016 and
requested the Defendant to provide the facility of video conferencing for the board
meeting dated June 04, 2016.
- Defendant assured the same and the petitioner left for overseas as per their
schedule trip. On the date of board meeting, Defendant denied permission for
participation in Board meeting through video-conferencing facility on the ground
that Rule 3(3) (e) of Companies (Meeting of Board and its Powers) Rules, 2014
mandates intimation of participation in the board meeting through electronic mode
at the beginning of the calendar year which was not complied with by the
- Provisions of Law Section 173(2) of Companies Act, 2013 which deals with mode of participation
by the directors at the board meeting reads as follows:
- (2) The participation of directors in a meeting of the Board may be either in person or through
video conferencing or other audio visual means, as may be prescribed, which are capable of
recording and recognizing the participation of the directors and of recording and storing the
proceedings of such meetings along with date and time.
- Further, Rule 3 (3) of Companies (Meeting of Board and its Powers) Rules, 2014 provides certain
conditions w.r.t. participation through electronic mode and reads as follows:
- (b)The notice of the meeting shall inform the directors regarding the option available to them to
participate through video conferencing mode or other audio visual means, and shall provide all
the necessary information to enable the directors to participate through video conferencing mode
or other audio visual means.
- (c)A director intending to participate through video conferencing or audio visual means shall
communicate his intention to the Chairperson or the company secretary of the company.
- (d)If the director intends to participate through video conferencing or other audio visual means,
he shall give prior intimation to that effect sufficiently in advance so that company is able to make
suitable arrangements in this behalf.
- (e) The director, who desire, to participate may intimate his intention of participation through the
electronic mode at the beginning of the calendar year and such declaration shall be valid for one
Judgment of NCLT
- The NCLT stayed the operation of the board resolution which was passed for the appointment of
Company Secretary and Independent Director.
- The Judge held that Rule 3(3)(e) of Companies (Meeting of Board and its Powers) Rules, 2014 was
in existence even before the Petitioner had left for overseas and if the participation through video
conferencing was in contravention of said rules, than the assurance of providing facility of video
conferencing should not have been given by the Defendant.
- The Judge quoted that If anybody acts on the assurance given by the other side, the other side
cannot later back out from the assurance given by it. If at all any person backed out from the
assurance given, and if the assured proceeded on that assurance, then, such statement is hit by the
doctrine of estoppel.
- It is the duty of the director convening the Board meeting to inform the other directors about the
option available to them to participate in the meeting through video conferencing mode.
- Further, Sub Rule 3(3) (e) of Companies (Meeting of Board and its Powers) Rules, 2014 does not
intend to say that if an intimation to participate in a meeting through electronic mode is not given
at the beginning of the year, the directors are not entitled to participate in any meeting through
electronic mode.
- The said sub-rule has to be read wholly and not in pieces, therefore there is no merit in the
Defendant’s contention that video conferencing was not provided since no intimation was given at