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CA Intermediate · Corporate and Other Laws · Management & Administration

Himalaya Textiles Ltd, an unlisted public company, wants to hold its annual general meeting at a shorter notice than 21 clear days. Its shareholders hold 96% of the paid-up share capital that gives voting rights. Which statement correctly states the legal position?

An AGM can be called at shorter notice if at least 95% of the members entitled to vote consent to it. Since 96% of the voting shareholders agree, Himalaya Textiles may validly hold the meeting at shorter notice; unanimity or ROC approval is not required.

  1. AA general meeting can be called at shorter notice only if consent is given by at least 95% of the members entitled to vote in the case of an AGMCorrect
  2. BA general meeting can be called at shorter notice only if all the members give consent in writing
  3. CShorter notice is permitted for an AGM only with the prior approval of the Registrar of Companies
  4. DShorter notice is never permitted for an AGM of a public company

Explanation

The Act allows a general meeting to be called at shorter notice if consent is given by members of an AGM holding at least 95% of the voting power (for a general meeting other than AGM, a majority in number of members holding at least 95% of paid-up capital with voting rights). Here 96% exceeds 95%, so shorter notice is valid. Requiring unanimity or ROC approval is not the rule.

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