Meeting of Shareholders

The following points highlight the five main criteria required during meeting of shareholders. The criteria are: 1. Quorum 2. Voting 3. Resolutions 4. Copies to be Filed with the Registrar 5. Minutes Books.

Meeting of Shareholders: Criteria # 1. Quorum:

The quorum for the general meetings of the company is five persons personally present for public companies and two for private companies. But the Articles can fix a higher number.

Meeting of Shareholders: Criteria # 2. Voting:

At first, voting is by show of hands. In this case, every member present has one vote. But the Chairman or five members present in person or by proxy or members representing 10% of the paid-up capital or member(s) holding shares of not less than Rs. 50,000 may demand a poll in the case of a public company.

In a private company, poll may be demanded by one member present in person or by proxy if not more than seven such members are personally present, and by two such members present in person or proxy, if more than seven such members are personally present. The voting shall be in accordance with the voting rights attached to each share. Only at a poll, proxies will be used.

Meeting of Shareholders: Criteria # 3. Resolutions:

The Companies Act recognizes three types of resolutions: ordinary, special and a resolution requiring special notice. An ordinary resolution is one which is passed by a simple majority of votes cast on a show of hands or on a poll in favour of the resolution at a general meeting.

A special resolution is one (1) in regard to which the intention to propose the resolution as a special resolution is specifically mentioned in the notice of the meeting, and (2) which is passed if the votes cast for it are not less than three times the votes cast against it.

A resolution requiring special notice is an ordinary resolution which may be passed by the members at a general meeting by a simple majority but a notice of the intention to move the resolution (which requires special notice) has to be given to the company not less than 14 days before the meeting at which it is to be moved (excluding the day on which the notice is served and the day of the meeting) and the company must (upon receipt of such a notice) immediately give notice to the members of the intention to move such a resolution.

Sections 225 and 284 of the Companies Act mention four matters which require passing of a resolution with special notice. The Articles of the company may provide for additional matters in respect of which special notice is required.

Meeting of Shareholders: Criteria # 4. Copies to be Filed with the Registrar:

Printed or type-written copies of the following resolutions and agreements must be filed with the Registrar within 30 days of the passing of the resolution:

(1) Special resolutions;

(2) Resolutions agreed to by all members or classes of members;

(3) A resolution of the Board or an agreement appointing or re-appointing a managing director;

(4) Resolutions or agreements agreed to by all the members of any class of shareholders but which would not have been effective but for such agreement and all resolutions or agreements which effectively bind all the members of any class of shareholders though not agreed to by all of them; and

(5) Resolutions authorizing directors to act under clauses (a), (d) and (e) of sub-section (1) of Section 293;

(6) Resolutions approving the appointment of sole selling agents; and

(7) Resolution for voluntary winding up of the company.

Meeting of Shareholders: Criteria # 5. Minutes Books:

Every company must keep minutes containing a fair and correct summary of all proceedings of general meetings and Board meetings in books kept for that purpose. All appointments of officers made at any meetings must be included in the minutes.

In the case of Board meetings, the minutes must state the names of directors present and of those who may have dissented from any resolution passed at a meeting. The minutes of the general meeting are to be kept open for inspection by members.