Page 318 - DMGT407Corporate and Business Laws

Unit 13: Meeting of Directors and Shareholders

may call a general meeting of the members at any time by giving not less than 21 days Notes
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 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 fixing 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.
The requisitioned meeting must be held within 3 months of the date of the deposit of the
requisition. Further, where two or more persons hold any shares or interest in an company
jointly, a requisition, or a notice calling a meeting, signed by one or some only of them
shall, for the purposes of this section, have the same force and effect as if it had been signed
by all of them.
Any reasonable expenses incurred by the requisitionists, as aforesaid, shall be repaid to
them by the company and the same shall be recouped from directors at fault.
Meeting by the requisitionists must be held in the same manner as nearly as possible, in
which the meetings are to be called by the Board. However, where the registered office is
not made available to them for holding the meeting, they may hold the meeting elsewhere
[R. Chettair v. M. Chettair (1951) 21 Comp. Cas. 93].

Powers of the Company Law Board (s.186). If for any reason it is impracticable to call a
meeting of the company, other than an AGM, the Company Law Board may direct the
calling of the meeting: (a) on its own motion; (b) on an application of any director; (c) on
an application of any member entitled to vote at that meeting.

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