Key Provisions Relating to Notice of General Meetings


Key Provisions Relating to Notice of General Meetings

The object of the notice is to make aware the shareholders with the ‘Agenda’ of the meeting so that they may decide the matter intelligently. Notice of every meeting of the members of a company is required to be given in writing to every member, director, debenture trustee, deposit trustees and auditors of the Company. Section 101(2) provides that every notice of a meeting of a company shall specify the place, date, day and the hour of the meeting and shall contain a statement of the business to be transacted at such meeting.

Entitlement to Notice

Section 101(3) deals with the persons entitled to receive notice of a general meeting. It requires sending notice to the following in respect of each general meeting:—
(a) every member of a company;
(b) legal representative of any deceased member;
(c) the assignee of an insolvent member;
(d) the auditor or auditors of the company; and
(e) every director of the company.

The accidental omission to give notice to, or the non-receipt of notice by, any member or other person to whom it should be given shall not invalidate the proceedings at the meeting. There have been occasions when a company did not send notice due to an accidental omission. The non-receipt of the notice by certain members will not invalidate the proceedings of the meetings.

Where the persons entitled to notice are not served with the notice, the meeting is irregular and the proceedings thereat are invalid. If the proceedings of the subsequent meeting suffers from the infirmity of the previous meeting which was invalid due to non-service of notice, the subsequent meeting would be unauthorized and illegal. Omission to serve notice even on a single person may invalidate the meeting.

Authority to call General Meetings
A general meeting, whether an annual general meeting or an extraordinary general meeting, must be called under the authority of a resolution of the Board of directors subject to the provisions contained in the company's articles; if the managing director, manager, secretary or other officers call a meeting without such authority, it will not be effective unless the Board ratifies the same before the meeting is held.

The notice should state that 'By the orders of the Board'. The notice should be in writing. An oral notice has no value.

In case of a notice for the Board meeting, it should be issued on the instructions of the Chairman of the Board of directors of the company.

Duration of notice
Section 101 of the Companies Act, 2013 provides that a company shall give clear notice of not less than 21 days either in writing or through electronic mode, for calling a general meeting, whether annual general meeting or any other general meeting.

A period of 21 days is to be counted from the expiry of 48 hours after posting. The requirement of 21 days means 21 clear days, exclusive of the day when notice is served and the day when the meeting is held. The expression "not less than 21 days" means that there should be an interval of 21 clear days. The expression “twenty-one days’ notice” means twenty-one clear days notice exclusive of the day of service of the notice and of the day on which the meeting is to be held. An article, which provides for counting of days of service of a notice in any other manner is contrary to the provisions of the Act and must be disregarded.

The MCA vide Notification No. GSR 466(E) dated 05.06.2015 has provided exemption under section 101(1) and provided that a section 8 company may issue a notice at least not less than 14 days instead of 21 days. Therefore, a section 8 company can call its general meeting by giving clear notice of not less than 14 days instead of 21 days.

Shorter Notice
Proviso to section 101(1) of the Act, provides that a general meeting of a company can be called by giving shorter notice of less than 21 days, subject to it should be consented by members holding not less than 95% of the paid-up share capital, having a right to vote at the meeting. In the case of a company not having a share capital, the proposal must be approved by members holding not less than 95% of the total voting power. Sub-section (1) of section 101 is mandatory and consent means 'consent of members entitled to attend and vote' and 'not of members entitled to vote and present'.

Members shall give their consent for convening a general meeting by shorter notice. The consent shall be obtained from the members entitled to attend the meeting either before or at the time of the meeting.

Even though consent of shareholders to shorter notice for meeting at which a special resolution is passed, is not obtained prior to the meeting, the consent obtained thereafter would validate the resolution. Shareholders may validate by post consent a resolution passed at a meeting called on a shorter notice. The public trustee cannot give consent under section 171(2).

Procedure to Send Notice
Section 20(1) provides that a document may be served on a company or an officer thereof by sending it to the company or the officer at the registered office of the company by registered post or by speed post or by courier service or by leaving it at its registered office or by means of such electronic or other mode as may be prescribed. Here the “courier’’ means a person or agency which delivers the document and provides proof of its delivery.

Placement of Notice on Website
The notice of the general meeting of the company shall be simultaneously placed on the website of the company, if any and on the website as may be notified by the Central Government.

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