General Meetings: formula sheet

Key formulas

Gap between two AGMs (section 96(1))

Maximum gap between two AGMs = 15 months

Applies to every company other than a One Person Company. The Registrar may extend the time for an AGM (not the first) by up to 3 months for a special reason.

First AGM (section 96(1), first proviso)

First AGM within 9 months from the close of the first financial year

If the first AGM is held in this way, no AGM is needed in the year of incorporation.

Later AGMs (section 96(1), first proviso)

Within 6 months from the close of the financial year

For example, for the year ended 31 March, the AGM falls due by 30 September.

Time and place of AGM (section 96(2))

Business hours = 9 a.m. to 6 p.m.; not a National Holiday; registered office or a place in the same city, town or village

An unlisted company may hold its AGM anywhere in India if all members consent in advance, in writing or by electronic mode.

Requisition for EGM (section 100(2))

Requisitionists hold ≥ 1/10 of paid-up voting share capital (or ≥ 1/10 of total voting power if no share capital)

Counted on the date the company receives the requisition.

Board's timeline on requisition (section 100(4))

Board must proceed to call the meeting within 21 days, for a day not later than 45 days from receipt

If it fails, requisitionists may call and hold the meeting within 3 months from the date of the requisition.

Producer company AGM (section 378ZA)

First AGM within 90 days of incorporation; gap between AGMs ≤ 15 months; notice ≥ 14 days; quorum = 1/4 of members unless articles say more

Requisition for EGM is by one-third of members entitled to vote.

Gap between two AGMs

Maximum gap = 15 months (Section 96(1))

Applies to every company other than a One Person Company. Both this limit and the six-month limit must be met.

First AGM (company)

Within 9 months from the close of the first financial year

If held in this way, no AGM is needed in the year of incorporation.

Subsequent AGM

Within 6 months from the close of the financial year

Any other AGM, not the first.

Registrar's extension

Extension ≤ 3 months, for special reason

Not available for the first AGM of a company. Under Section 378ZA the same rule applies to a Producer Company, except its first AGM.

Time and day

Between 9 a.m. and 6 p.m., not a National Holiday

National Holiday means a day declared as such by the Central Government.

Place of AGM

Registered office, or another place in the same city, town or village

An unlisted company may hold it anywhere in India if all members consent in advance in writing or by electronic mode.

Producer Company first AGM

Within 90 days from the date of incorporation (Section 378ZA(2))

Different from the nine-month rule for other companies.

Producer Company notice and quorum

Notice ≥ 14 days in writing; quorum = one-fourth of total members, unless articles provide a larger number (Section 378ZA(7), (9))

Filing of proceedings with the Registrar within 60 days of the AGM (Section 378ZA(10)).

Board's power to call

Board may call an EGM whenever it deems fit (Section 100(1))

The EGM must be held at a place within India. The exception is a wholly owned subsidiary of a company incorporated outside India.

Requisition threshold (company with share capital)

Requisitionists must hold ≥ 1/10 of the paid-up share capital that carries the right of voting, on the date the requisition is received

Count only voting paid-up capital, and count it on the date of receipt, not the date of signing.

Requisition threshold (company without share capital)

Requisitionists must hold ≥ 1/10 of the total voting power of all members having a right to vote, on the date of receipt

Section 100(2)(b).

Form of requisition

Set out the matters for consideration + signed by the requisitionists + sent to the registered office

Section 100(3). A requisition missing any of these is not a valid requisition.

Board's time limits

Within 21 days of receiving a valid requisition, the Board must proceed to call a meeting for a day not later than 45 days from the date of receipt

Section 100(4).

Requisitionists' right to call

If the Board does not act, requisitionists may call and hold the meeting within 3 months from the date of the requisition

They must call and hold it in the same manner as the Board would (Section 100(5)).

Expenses

Reasonable expenses are reimbursed by the company and deducted from Section 197 fees or remuneration of the directors in default

Section 100(6).

Members' resolution at a meeting (Section 111)

Requisition deposited at the registered office not less than 6 weeks before the meeting for a resolution notice, or not less than 2 weeks before for any other requisition

The requisitionists must have the number of members required under Section 100. A sum reasonably sufficient for expenses must be deposited. Penalty for default is ₹25,000 on the company and every officer in default.

Period of notice (section 101(1))

Notice ≥ 21 clear days, in writing or by electronic mode

Clear days exclude the day of giving notice and the day of the meeting.

Shorter notice: AGM

Consent of not less than 95% of members entitled to vote

Consent may be in writing or by electronic mode.

Shorter notice: other general meeting, company with share capital

Majority in number of members entitled to vote AND they represent ≥ 95% of the paid-up share capital giving a right to vote at the meeting

Both tests must be met.

Shorter notice: other general meeting, no share capital

Members having ≥ 95% of the total voting power exercisable at the meeting

Counted by voting power, not number of members.

Members with limited voting rights

Counted only for the resolutions on which they can vote

Second proviso to section 101(1).

Contents of notice (section 101(2))

Place + date + day + hour + statement of business

All five must appear.

Persons to receive notice (section 101(3))

Members (and legal representative or assignee) + auditor(s) + every director

Omission of a person on this list is the usual exam trap.

Special business at AGM (section 102(2)(a))

All business is special except financial statements and reports, dividend, retiring directors' appointment, auditors' appointment and remuneration

At other meetings all business is special.

Interest in another company (proviso to section 102(2))

Disclose shareholding of promoter, director, manager, KMP if ≥ 2% of paid-up share capital of that other company

Applies where the item relates to or affects that other company.

Penalty (section 102(5))

Higher of ₹50,000 or 5 × benefit accruing

Applies to promoter, director, manager or KMP in default. Benefit is also held in trust and compensated to the company under section 102(4).

Quorum of a public company (s.103(1)(a))

Members ≤ 1,000: 5 | 1,001 to 5,000: 15 | > 5,000: 30 (members personally present)

Articles may provide a larger number. Members are counted as on the date of the meeting.

Quorum of a private company (s.103(1)(b))

2 members personally present

Again, articles may fix a larger number.

Quorum absent for half an hour (s.103(2))

Adjourned to same day next week, same time and place, or as the Board decides; requisitioned meeting stands cancelled

Not less than 3 days' notice of an adjourned meeting or changed day, time or place.

Adjourned meeting without quorum (s.103(3))

Members present = quorum

Applies if quorum is missing within half an hour at the adjourned meeting also.

Proxy rights (s.105(1))

Proxy: may attend and vote on a poll only; no right to speak; acts for ≤ 50 members

Proxy need not be a member. Number of shares is as prescribed.

Proxy deposit period (s.105(4))

Maximum deposit period = 48 hours before the meeting

A longer period in the articles is treated as 48 hours.

Proxy inspection (s.105(8))

From 24 hours before the meeting to its conclusion, on 3 days' written notice

Member entitled to vote may inspect proxies lodged during business hours.

Demand for poll (s.109(1)(a))

Company with share capital: members holding ≥ 1/10 of total voting power or shares with paid-up ≥ ₹5,00,000

Chairman may also order a poll on his own motion. Poll on other questions taken within 48 hours of demand.

Ordinary resolution (s. 114(1))

Votes in favour > Votes against

Notice duly given. Casting vote of the Chairman, if any, is included in the count. Only votes of entitled members who vote are counted.

Special resolution (s. 114(2))

Votes in favour ≥ 3 × Votes against

Also needs the notice to specify the intention to propose it as a special resolution, and the notice to be duly given.

Default mode of voting (s. 107(1))

Show of hands, unless poll demanded under s. 109 or voting is electronic

The Chairman's declaration and the minute entry are conclusive evidence of the result on a show of hands (s. 107(2)).

Demand for poll, company with share capital (s. 109(1)(a))

Voting power ≥ 1/10 of total, OR shares with paid-up sum ≥ ₹5,00,000 (or higher prescribed amount)

Demand is by members present in person or by proxy, where allowed. The Chairman may also order a poll on his own motion. Timing is before or on the declaration of the show-of-hands result.

Demand for poll, company without share capital (s. 109(1)(b))

Voting power ≥ 1/10 of total

Members present in person or by proxy, where allowed.

Timing of poll (s. 109(3), (4))

Adjournment or Chairman: forthwith. Other questions: within 48 hours of demand

The Chairman fixes the time within the 48 hours. A demand may be withdrawn at any time by those who made it (s. 109(2)).

Voting rights on a poll (s. 47)

Equity vote ∝ share in paid-up equity capital; preference vote ∝ share in paid-up preference capital

Preference holders vote only on matters directly affecting their rights, winding up, or repayment or reduction of capital. If preference dividend is unpaid for two years or more, that class votes on all resolutions.

Special notice (s. 115)

Members holding ≥ 1% of total voting power, or shares with aggregate paid-up sum not exceeding the prescribed amount (up to ₹5,00,000)

Applies only where the Act or the articles require special notice of the resolution.

Postal ballot (s. 110(2))

Requisite majority by postal ballot = deemed passed at a general meeting

Not for ordinary business, or business on which directors or auditors have a right to be heard.

Time to record minutes (s.118(1))

Minutes entered in the minute book within 30 days of the end of the meeting or postal ballot resolution

Pages must be consecutively numbered. Applies to general, class, creditors', Board and committee meetings.

Content of minutes (s.118(2)-(4))

Fair and correct summary + all appointments + (Board/committee only) directors present and dissenters for each resolution

Names of dissenting directors are required only for Board and committee meetings.

Matters the Chairman may exclude (s.118(5)-(6))

Defamatory OR irrelevant/immaterial OR detrimental to the company's interests

Absolute discretion, but only on these three grounds.

Evidentiary value (s.118(7)-(8))

Properly kept minutes = evidence; meeting deemed duly held until contrary is proved

The presumption is rebuttable, not conclusive.

Inspection and copies (s.119)

Kept at registered office; free inspection by members; minimum 2 hours per business day; copy within 7 working days on fee

Applies to general meeting and postal ballot minutes.

Penalty for default (s.118(11))

Company ₹25,000; every officer in default ₹5,000

Section 119(3) imposes the same amounts for refused inspection or copy not given in time, for each refusal or default.

Tampering with minutes (s.118(12))

Imprisonment up to 2 years and fine ₹25,000 to ₹1,00,000

Both imprisonment and fine apply.

One Person Company (s.122)

Member's resolution entered in the minute book under s.118, signed and dated by member; that date is the date of the meeting

A sole director's Board resolution is treated the same way.

Quick revision

• General meeting notice: not less than clear 21 days, in writing or by electronic mode (Section 101).
• Shorter notice for an AGM needs consent of not less than 95% of members entitled to vote.
• Shorter notice for another general meeting with share capital needs a majority in number of members entitled to vote, representing at least 95% of the voting paid-up capital.
• Notice must state place, date, day, hour and the business to be transacted.
• Notice goes to members, legal representatives of deceased members, assignees of insolvent members, auditors and every director.
• Accidental omission or non-receipt of notice does not invalidate the meeting's proceedings.
• Ordinary resolution: votes in favour, including any casting vote, exceed votes against (Section 114).
• Special resolution: intention specified in notice, and votes in favour at least three times those against.
• A resolution passed by requisite majority by postal ballot is deemed passed at a general meeting (Section 110).
• Minutes must be kept within 30 days of the meeting in consecutively numbered pages (Section 118).
• Minutes are evidence of the proceedings; until the contrary is proved the meeting is deemed duly held.
• Default on minutes: company penalty of ₹25,000 and each officer in default ₹5,000; tampering is punishable with imprisonment up to two years and fine.

Common mistakes

• Saying every company must hold an AGM. Fix: Write that every company other than a One Person Company must hold an AGM each year.
• Mixing up the 15-month gap with the 6-month limit. Fix: The 15-month rule limits the gap between two AGMs. The 6-month rule limits the time after the financial year end. Both must be satisfied.
• Applying only the fifteen-month gap and ignoring the six-month limit. Fix: Always run both clocks. The AGM must satisfy both limits.
• Saying the Registrar can extend the time for the first AGM. Fix: Remember the proviso says 'other than the first annual general meeting'. Extension is up to three months and only for later AGMs.
• Counting one-tenth of total share capital instead of voting paid-up capital. Fix: Always write: one-tenth of the paid-up share capital that carries the right of voting, as on the date of receipt.
• Saying the Board must hold the meeting within 21 days. Fix: The Board must proceed to call within 21 days, and the meeting date must be not later than 45 days from receipt.
• Counting 21 days including the date of notice or the date of the meeting. Fix: The word is "clear". Exclude both days. Notice given on 1 June allows a meeting no earlier than 24 June.
• Using one consent threshold for all meetings. Fix: AGM: 95% of members entitled to vote. Other meetings: majority in number representing at least 95% of voting paid-up capital (or 95% of voting power if no share capital).
• Counting proxies towards quorum. Fix: Section 103 requires members personally present. Proxies do not count.
• Saying a proxy can speak or vote on a show of hands. Fix: A proxy has no right to speak and votes only on a poll (section 105(1)).

Exam tips

• For 'distinguish' questions, use a point-by-point layout with at least five points. Add section numbers for AGM (96) and EGM (100).
• In dates problems, first fix the financial year end, then compute the 6-month and 15-month limits. State both.
• In requisition problems, do the one-tenth calculation in numbers first. A clear calculation earns marks even if the conclusion is simple.
• Mention class meetings briefly when asked for 'kinds of meetings'. Say they are meetings of one class of members, and do not quote a section you are unsure of.
• Learn the exceptions: One Person Company, the Registrar's 3-month extension and the unlisted-company place proviso. They are common short-note material.
• Write the section number first, then the rule, then the application. ICSI answers earn marks for this order.
• For date problems, show both clocks, six months and fifteen months, in two lines. This protects marks even if one date is wrong.
• Do not forget the exception for a One Person Company in any 'every company' answer.