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CS Executive · Company Law and Practice · General Meetings

Zenith Textiles Ltd has a share capital. Shareholders holding paid-up voting capital of 12% sign a requisition setting out the matters and send it to the registered office asking for an EGM. What is the Board's obligation under the Companies Act, 2013?

The Board must call an EGM, because members holding at least one-tenth of the paid-up voting share capital on the date of receipt can requisition one. The 12% holding exceeds that threshold, and no director signature or Registrar approval is needed.

  1. ACall an EGM, because the requisitionists hold at least one-tenth of the paid-up voting share capitalCorrect
  2. BRefuse, because only holders of one-fourth of paid-up capital can requisition an EGM
  3. CCall an EGM only if the requisition is also signed by all the directors
  4. DCall an EGM only if the Registrar approves the requisition

Explanation

For a company with share capital, members holding not less than one-tenth of the paid-up share capital carrying voting rights on the date of receipt can requisition an EGM. At 12% the holding exceeds this threshold, so the Board must call the meeting. The one-fourth figure is wrong because it is not the statutory threshold.

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