Page 321 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes Section 174 provides that unless otherwise so provided in the Articles, in the case of a public
company, the quorum is five members personally present and in the case of a private company,
it is two members personally present. If Quorum is not present within ½ hour, the meeting shall
be adjourned to the same day next week at the same time and place. The Board may determine
some other time, day and place but it should be within the town, city or village of the registered
office.

Notes Quorum - Certain Typical Issues

1. Can a single member present constitute a valid quorum? A single member present
cannot by himself constitute a valid quorum except where the Act expressly so
provides (vide Ss.167 and 186). Thus, where the meeting is convened by Central
Government/Tribunal/s 167 or 186, it may give any directions including a direction
that a single member present in person or proxy shall constitute a valid meeting.
2. Presence of Preference Shareholders - whether to be counted for quorum. If business
proposed to be transacted at a general meeting does not include any item or resolution
proposed to be passed, which directly affect the rights of the preference shareholders,
their presence should not be taken into account for purpose of determining the
quorum, but where the subject matter includes any resolution in which the rights of
preference shareholders are directly affected, their presence should be taken into
account for the purpose of the quorum.

13.4.2 Voting (Ascertaining the Sense of the House)

Unanimity on all matters before a meeting is always not obtained. In the absence of unanimity,
the chairman wants to know the wishes of the persons present therein. This is known as
ascertaining the sense of the house and for this purpose; he has to put the matter before the house
to the members. There are various methods which can be adopted by the chairman to put the
matter to vote in order to ascertain the wishes of the members. They are as follows: (1) By
acclamation, (2) By voice vote, (3) By division, (4) By show of hands, (5) By ballot and (6) By poll.

1. By acclamation. When persons present in a meeting indicate their approval or disapproval
of the motion by clapping of hands, cheering or applause, it is known as voting by
acclamation. This method is adopted where there is a unanimous approval or disapproval.

Example: the motion of thanks to the chair is generally adopted by this method. But this
method should not be adopted if there is a sharp difference of opinion among the members on
the issue before them.

2. By voice vote. In this case, the Chairman puts the proposition before the meeting and
persons who are in favour of the proposition say ‘yes’ and those who are against it say ‘no’.
The Chairman hears both the voices ‘yes’ and ‘no’ and gives his decision after ascertaining
the numbers of ‘yes’ and ‘no’. At this stage, a member who is dissatisfied with the Chairman’s
decision on the basis of voice vote may demand a vote by show of hands.
3. By division. Under this method, the Chairman requests the members present in the meeting
to divide themselves into two blocks-one in favour of the proposal and another against it.
The Chairman, with the help of the Secretary, counts the number of persons in favour and
against the proposal and gives his verdict.

4. By show of hands. Under this method, the Chairman asks all those in favour of the
resolution to raise their right hand and when that number is noted, asks all those against

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