Company Law and Practice · General Meetings

Notice of General Meetings and Explanatory Statement

Updated 11 October 2026 · Fact-checked

A general meeting needs at least clear 21 days' notice (section 101), stating place, date, day, hour and business, sent to members, auditors and directors. Shorter notice needs consent from the prescribed members. Special business needs an explanatory statement under section 102 disclosing material facts and interests.

Understand Notice of General Meetings and Explanatory Statement

A general meeting decides matters that belong to the members. Members can decide only if they know when and where the meeting is and what will be discussed. Notice and the explanatory statement give them that information.

Section 101 sets the base rule: a general meeting is called by not less than clear twenty-one days' notice, in writing or through electronic mode. "Clear" days exclude the day the notice is given and the day of the meeting. The notice must specify the place, date, day and hour and contain a statement of the business to be transacted.

The notice must go to every member, the legal representative of a deceased member or the assignee of an insolvent member, the auditor or auditors, and every director. A short list, but exams test it often.

Section 102 deals with special business. At an AGM, all business is special except: consideration of financial statements and the reports of the Board and auditors; declaration of dividend; appointment of directors in place of those retiring; and appointment of, and fixing remuneration of, auditors. At any other meeting (such as an EGM), all business is special. An explanatory statement of material facts must be annexed to the notice for each item of special business.

The statement protects members from hidden interests. It must disclose the nature of concern or interest, financial or otherwise, of every director, manager, other key managerial personnel (KMP) and their relatives. It must also give any other information that helps members understand the meaning, scope and implications of the item.

Key rules to remember

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).

How to solve Notice of General Meetings and Explanatory Statement questions

Use this order for any problem on notice or explanatory statement. It keeps your answer in the ICSI pattern: provision, facts, conclusion.

1Identify the meeting: AGM or another general meeting (EGM). This decides the shorter notice consent threshold and which items are special business.
2Check the notice period. Count 21 clear days, leaving out the day of giving notice and the day of the meeting.
3If the notice is short, test the consent: 95% of members entitled to vote for an AGM; for other meetings the majority-in-number plus 95% of paid-up capital test (or 95% of voting power if no share capital).
4Check contents: place, date, day, hour and statement of business.
5Check recipients: members, auditors and directors. For an omission, apply section 101(4): accidental omission or non-receipt does not invalidate the proceedings.
6Sort the business into ordinary and special. For special items, check that an explanatory statement with interests of directors, KMP and relatives is annexed.
7Write the conclusion: valid or invalid, and any consequence such as holding the benefit in trust or the penalty under section 102(5).

Quickest way: The 21-95-Special check

When to use it: Use this when a short fact-based question gives dates, percentages and an agenda, and you have only a few minutes.

21: count clear days from notice to meeting, excluding both days.
95: if fewer than 21 days, compute consent percentage and match it with the meeting type.
Special: tick each agenda item against the four ordinary AGM items; everything else needs an explanatory statement.
Write the section numbers (101, 102) in your conclusion line.

Common mistakes in Notice of General Meetings and Explanatory Statement

Counting 21 days including the date of notice or the date of the meeting.
Students treat "21 days" as a simple date difference.
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.
Students remember "95%" and stop there.
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).
Leaving out the auditor or directors when listing who gets notice.
Students think notice goes only to members.
Fix: Remember the three groups under section 101(3): members (with legal representative or assignee), auditors, directors.
Saying any omission to send notice invalidates the meeting.
Students overlook section 101(4).
Fix: An accidental omission, or non-receipt, does not invalidate the proceedings. A deliberate omission is a different matter and your answer should say so.
Treating all AGM business as special, or all EGM business as ordinary.
The rule is reversed or half remembered.
Fix: At an AGM only items outside the four ordinary ones are special. At any other meeting all business is special.
Omitting relatives or KMP from the disclosure of interest.
Students recall only directors.
Fix: Section 102(1)(a) covers directors, manager, other KMP and relatives of these persons.

Worked examples

Example 1

Alpha Textiles Limited, with share capital, sends notice on 5 March for an EGM to be held on 24 March. Members holding 96% of the paid-up voting capital, and a majority in number of voting members, consent in writing to shorter notice. Is the meeting validly called?

Show the solution

Count clear days: exclude 5 March and 24 March. Days from 6 to 23 March are 18 days. This is less than 21.
The meeting is an EGM, so the consent route for other general meetings applies.
The test needs members who are a majority in number of those entitled to vote and who represent at least 95% of the paid-up voting capital. Here both are met: majority in number, and 96% is above 95%.
Consent was given in writing, which section 101(1) permits.

Answer: The notice period is only 18 clear days, but shorter notice is allowed because the required consent was obtained. The meeting is validly called under the proviso to section 101(1).

Example 2

At the AGM of Beta Foods Limited the agenda has: (a) adoption of financial statements, (b) declaration of dividend, (c) re-appointment of a retiring director, (d) appointment of Mr. Rao, a director's brother, as a consultant. Which items need an explanatory statement, and what must it contain?

Show the solution

The meeting is an AGM. Under section 102(2)(a), items (a), (b) and (c) fall in the excluded ordinary categories: financial statements and reports, dividend, and appointment of directors in place of those retiring.
Item (d) is outside those categories, so it is special business.
An explanatory statement of material facts must be annexed to the notice for item (d).
It must state the nature of concern or interest, financial or otherwise, of every director, the manager if any, other KMP and their relatives. The director whose brother is proposed has an interest and it must be shown.
It must also give other facts that help members understand the meaning, scope and implications of the item.
Where a document is to be considered, the statement must say when and where it can be inspected (section 102(3)).
If non-disclosure gives a benefit to the person concerned, they hold it in trust for the company and compensate it (section 102(4)).

Answer: Only item (d) is special business and needs the explanatory statement, disclosing interests of directors, KMP and their relatives and other material facts. Default attracts a penalty of the higher of ₹50,000 or five times the benefit under section 102(5).

Exam tips

Write the section number with every rule: 101 for notice, 102 for the explanatory statement.
Show your day count in numbers when a date problem is given. Marks are often for the working.
Always state whether the meeting is an AGM or an EGM before applying consent thresholds.
In omission questions, quote the rule in section 101(4) and state whether the omission was accidental.
Close with a clear conclusion line: valid or invalid, and the consequence.

Practice questions from General Meetings

Notice of General Meetings and Explanatory Statement in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Notice of General Meetings and Explanatory Statement: frequently asked questions

What is the minimum notice for a general meeting under section 101?

Not less than clear twenty-one days' notice, given in writing or through electronic mode. Clear days exclude the day of giving notice and the day of the meeting.

Can a general meeting be held at shorter notice?

Yes, if consent is given in writing or by electronic mode. For an AGM, not less than 95% of members entitled to vote must consent. For other meetings, the majority-in-number and 95% paid-up capital test applies, or 95% of voting power if there is no share capital.

What is the effect of omission to give notice to a member?

Under section 101(4), an accidental omission to give notice to a person entitled to it, or non-receipt of the notice, does not invalidate the proceedings of the meeting.

What is special business and why does it need an explanatory statement?

At an AGM, special business is everything except financial statements and reports, dividend, appointment of retiring directors, and appointment and remuneration of auditors. At other meetings all business is special. The statement under section 102 gives members the material facts and discloses the interests of directors, KMP and relatives.

What happens if the explanatory statement is not properly disclosed?

A promoter, director, manager or KMP who gains a benefit through non-disclosure holds it in trust for the company and must compensate it. Default also attracts a penalty of ₹50,000 or five times the benefit, whichever is higher.