Page 206 - DCOM106_COMPANY_LAW

Unit 12: Company Meetings and Proceedings

Notes

Case Study Winding up Company

alomon carried on business as a leather merchant. He sold his business for a sum of
£ 30,000 to a company formed by him along with his wife, a daughter and four sons.
SThe purchase consideration was satisfied by allotment of 20,000 shares of £ 1 each
and issue of debentures worth £ 10,000 secured by floating charge on the company’s assets
in favour of Mr. Salomon. All the other shareholders subscribed for one share of £ 1 each.
Mr. Salomon was also the managing director of the company. The company almost
immediately ran into difficulties and eventually became insolvent and winding up
commenced. At the time of winding up, the total assets of the company amounted to
£ 6,050; its liabilities were £ 10,000 secured by the debentures issued to Mr. Salomon and £
8,000 owing to unsecured trade creditors.

The unsecured sundry creditors claimed the whole of the company’s assets, viz. £ 6,050 on
the ground that the company was a mere alias or agent for Salomon.
Question

Do you agree to the claims of the unsecured trade creditors? Comment. (Hint: Yes Please
follow the case).

12.7 Summary

The Board of directors should also get a report, called the statutory report, sent to each
member along with the notice of the meeting.
The statutory report is required to be certified as correct by at least two directors, one of
whom shall be the managing director, where there is one.
The meeting may adjourn and the adjourned meeting has the same powers as the original
meeting.
The Company Law Department has expressed the view that the Registrar can grant
extension of time, for special reasons, up to a maximum period of 3 months, even if such
extension allows the company to hold its AGM beyond the calendar year.
Whether AGM can be called on a public holiday. Section 166(2), inter alia, provided that,
every AGM shall be called on a day that is not a public holiday.

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.

12.8 Keywords

Agenda: The word ‘agenda’ indicates the business to be transacted at a meeting.
Motion: The term ‘motion’ indicates a proposition made at a meeting by any member. Such a
motion may be passed without any change or modification.
Proxies: In the case of a company, every member of the company entitled to attend and vote at
a meeting has the right to appoint another person, whether a member or not, to attend and vote
for him.

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