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Unit 10: Share Capital

4. A meeting beyond statutory time cannot be said to be void or illegal. If the Tribunal Notes
does not extend the date of holding the AGM u/s 167, the Directors shall be subjected to
increasing penalty but the meeting shall be a valid meeting. Otherwise, the position in law
would become impossible.
5. The Board of Directors has the power to cancel or postpone a meeting convened, though it
cannot be exercised except for bona fide and proper reasons.

10.4.1 Extraordinary Meeting (EGM) – S. 169

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 of their own accord; (ii) by the Directors
on requisition; (iii) by the requisitionists themselves; (iv) by the Tribunal. 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 satisfi ed (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
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.
If the Board of Directors does not or fails to call the meeting as aforesaid (i.e., within 21 days
fi xing the date of the meeting within 45 days of the deposit of a valid requisition), the meeting
may be called: by the requisitionists themselves: (a) In case of a company having share capital, by
one or more requisitionists as represent: (i) a majority in value of the paid-up share capital held
all the requisitionists; or (ii) at least 1/10th of the paid-up share capital carrying voting rights
in respect of that matter, whichever is less; or (b) in case of a company not having share capital,
by one or more requisitionists who represent at least 1/10th of the total voting power of the
company in regard to the matter of the requisition.
Where the Articles, in accordance with the provisions of s.180, provide that members who have
not paid calls on their shares would not be entitled to vote, them they can not requisition a
meeting, nor vote it and if they do so the proceedings would be invalid.

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