Page 319 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes For the aforesaid meeting, the Company Law Board may give directions in respect of the place,
date and the manner in which the meeting be held and conducted. It may also give such ancillary
or consequential directions as it thinks expedient, including a direction that one member present
in person or proxy shall be deemed to constitute a meeting.

Example: Superclean Industries Pvt Ltd. is a company in which there are three
shareholders and all of them are directors of the company. Mr Superman holds 60 percent of the
paid up share capital while the balance 40 percent of shares is held equally by the remaining two
directors. Because of some rift among them, the two directors holding 40 percent share capital
have aligned and started preventing the holding of any meetings of the company. The articles of
the company provide for a minimum of two directors/members as quorum for board meetings
as well as general meetings.
Mr Superman is a majority shareholder, but he is helpless, as no meeting can be held because of
no quorum. He would apply to CLB under s. 186 for convening of the general meeting. The CLB,
if satisfied, will order a meeting to be held with the presence of one member as sufficient
quorum. Mr Superman, being the majority shareholder is entitled to exercise his statutory right
to participate in the decision-making process, which cannot be frustrated by the quorum
requirement. [Opera Photography Ltd. Re, 1989 B CLC 763 CLD].

Did u know? Class Meetings
When it is proposed to alter, vary or affect the rights of particular class of shareholders
(e.g., where accumulated dividends on cumulative preference shares is to be cancelled)
and it is not possible to obtain the consent in writing, of the holders of 3/4ths of the issued
shares of that class, a meeting of the holders of those shares may be called. Such a meeting
is commonly known as a ‘class meeting’. It should be noted that all resolutions in a class
meeting must be passed as special resolutions. The holders of at least 10 per cent of the
issued shares of that class who did not consent in favour of the resolution may apply to the
Court within 21 days to have the resolution cancelled and where such application is made,
the resolution shall not have effect unless and until it is confirmed by the Court.

Self Assessment

Fill in the blanks:
8. EGM is convened for transacting some ……………………business that may arise in between
two AGMs.
9. All business transacted at extra ordinary meetings is called ………………..business.

13.4 Matters Relating to General Meetings

Notice of the meeting (s.171). Every member of the company is entitled to a notice of every
general meeting. A notice of not less than 21 days must be given in writing to every member.
However, a shorter notice for AGM will be valid if all members entitled to vote give their
consent. In case of other meetings, a shorter notice will be valid if consent is given by members
holding at least 95 per cent of the paid-up capital carrying voting rights, or representing at least
95 per cent of the voting power.
The notice may be given to members either personally, or sending by post to him at his registered
address. A notice of a meeting may also be given by advertising the same in a newspaper
circulating in the neighborhood of the registered office of the company.

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