Page 316 - DMGT407Corporate and Business Laws

Unit 13: Meeting of Directors and Shareholders

obligation to hold the meeting. The proper course shall be to hold the meeting and then Notes
adjourn it to a suitable date for considering the accounts. The adjourned meeting must,
however, be held within the maximum time limit allowed under s.166.
6. The combined reading of Ss.166 and 210 requires compliance with the following: (a) There
must be one meeting held in each calendar year. (b) Not more than 15 months must elapse
between one general meeting and another. (c) The period of 15 months may be extended
to 18 months by the Registrar. (d) Except in the case of the first AGM, the accounts must
relate to a period beginning with the day immediately after the period for which they
were submitted and ending with a day which must not precede the day of the meeting by
more than 6 months; or 6 months and the extension granted by the Registrar, i.e., a
maximum period of 9 months.

7. The company must give twenty-one days notice to all the members of the company and
the auditor. A shorter notice may be held valid if consent is accorded to by all the members
entitled to vote at the meeting (s.171). Such a consent may be given before the meeting is
held or after the resolutions are passed. A copy of directors’ report on the company’s
position for the year together with copy of the audited accounts and auditors’ report must
accompany the notice. Also a proxy form must be attached with the notice, on which it
shall be specifically mentioned that a member entitled to vote is entitled to appoint Proxy,
and Proxy need not be a member of the company.
The notice must specify the place and the day and hour of the meeting and shall contain a
statement of the business to be transacted thereat [s.172(1)].
If the time of holding the meeting and other essential particulars required by the section
are not specified in the notice, the meeting will be invalid and all resolutions passed
thereat will be of no effect.
The notice must be given to every member, legal representative of a deceased member or
assignee of an insolvent member and to auditor or auditors [s.172(2)].
8. If default is made in holding the meeting, the Central Government may, on the application
of any member of the company, call or direct the calling of the meeting. If the company
fails to hold the meeting either originally or when directed to do so by the Central
Government, then the company and every officer of the company who is default shall be
punishable with fine up to ` 50,000; and in the case of a continuing default, with a further
fine of ` 2500 per day during the continuance of default (s.168).

13.2.1 Certain Typical Issues in Respect of AGM

1. Whether AGM can be called on a public holiday. Section 166(2), inter alia, provides that
every AGM shall be called on a day that is not a public holiday. The Department of
Company Affairs has opined that it is a mandatory provision.

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Caution Bank holidays (for purposes of closing) though declared as public holidays under
the Negotiable Instruments Act, 1881 shall not be treated as public holidays for the aforesaid
purpose. Thus, 31st March and 30th Sept. shall not be considered as public holidays.
In the following cases, however, AGM may be held on a public holiday: (i) Section 2(38)
provides that if any day is declared by the Central Government to be a public holiday after
the issue of the notice convening such a meeting, it shall not be deemed to be a public
holiday in relation to the meeting. (ii) Where a public company or its subsidiary has by its
articles fixed the time of its AGM and the day turns out to be a public holiday [Proviso (a)

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