Page 197 - DCOM106_COMPANY_LAW

Company Law

Notes 12.3.1 Extraordinary General Meeting on Requisition

The members of a company have the right to require the calling of an extraordinary general
meeting by the directors. The board of directors of a company must call an extraordinary
general meeting if required to do so by the following number of members:
Members of the company holding at the date of making the demand for an EGM not less
than one-tenth of such of the voting rights in regard to the matter to be discussed at the
meeting.
If the company has no share capital, the members representing not less than one-tenth of
the total voting rights at that date in regard to the said matter.
The requisition must state the objects of the meetings and must be signed by the requisitioning
members. The requisition must be deposited at the company’s registered office. When the
requisition is deposited at the registered office of the company, the directors should within
21 days, move to call a meeting and the meeting should be actually be held within 45 days from
the date of the lodgement of the requisition. If the directors fail to call and hold the meeting as
aforesaid, the requisitionists or any of them meeting the requirements at (a) or (b) above, as the
case may be, may themselves proceed to call meeting within 3 months from the date of the
requisition, and claim the necessary expenses from the company. The company can make good
this sum from the directors in default. At such an EGM, any business which is not covered by the
agenda mentioned in the notice of the meeting cannot be voted upon.
Clause 47 of Table A (Schedule I) provides that, all general meetings other than AGMs shall be
called the EGMs. The legal provisions as regards such meetings are:
1. EGM is convened for transacting some special or urgent business that may arise in between
two AGMs, for instance, change in the objects or shift of registered office or alteration of
capital. All business transacted at such meetings is called special business. Therefore,
every item on the agenda must be accompanied by an ‘Explanatory Statement’.
2. An EGM may be called: (i) by the directors on their own accord; (ii) by the directors on
requisition; (iii) by the requisitionists themselves; (iv) by the Company Law Board. The
board of directors may call a general meeting of the members at any time by giving not
less than 21 days notice. A shorter notice may, however, be held valid if consent is accorded
thereto by members of the company holding 95% or more of the voting rights (s.171). The
board of directors must convene a general meeting upon request or requisition if the
following conditions are satisfied (s.169):
The requisitionists must be such number of members who, at the date of the deposit of the
requisition, are the holders of 1/10th of total voting power. Thus, in case of a company
having a share-capital they should hold at least 1/10th of such of the paid-up capital that
carries right to vote in regard to that matter. Preference shareholders have voting power
only as regards matters relating to the preference shareholders. They have no voting right
and therefore, no right to requisition in respect of other matters. If the company does not
have a share capital, they should at least hold 1/10th of the total voting power of the
company in regard to that matter. The requisition must state the objects of the meeting,
i.e., it must set out the matters for the consideration of which the meeting is to be called.
Further, requisition must have been deposited at the registered office of the company. The
requisition must be signed by the requisitionists. In case all the aforesaid conditions are
satisfied, the board of directors must within 21 days of the receipt of the requisition call
the meeting giving at least 21 days notice fixing the meeting within 45 days of the receipt
of the requisition.
Where the resolution proposed is a special resolution then the requirements of s.189(2) must be
complied with, viz., it should be so described and explanatory statement be annexed.

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