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 CS LLM Arjun Chhabra
(Law Maven)
Mo: 62 62 62 143 8 / 9552 52 143 8

MOST IMPORTANT QUESTIONS FOR CA INTER CORPORATE

& OTHER LAWS
CHAPTER 7 – MANAGEMENT & ADMINISTRATION
Five Star Four Star 3 Star 2 Star
✓ Sec 103 Quorum ✓ Sec 102 ✓ Sec 105 Chairman ✓ Sec 109 Poll
✓ Sec 101 Notice Explanatory ✓ Sec 118 Minutes ✓ Sec 121 Report of
✓ Sec 96 AGM statement ✓ Sec 119 Inspection AGM
✓ Sec 100 EGM ✓ Sec 115 Resolution of minutes
✓ Sec 105 Proxy special notice ✓ Sec 94 Register of
✓ Sec 92 Annual ✓ Sec 106 Restriction member
return on voting rights
✓ Sec 108 read with
rule 20 E voting
✓ Sec 114 OR v SR
Important Sections
✓ Sec 103 Quorum ✓ Sec 106 Restriction on voting rights
✓ Sec 101 Notice ✓ Sec 108 read with rule 20 E voting
✓ Sec 96 AGM ✓ Sec 114 OR v SR
✓ Sec 100 EGM ✓ Sec 105 Chairman Sec 105 Chairman
✓ Sec 105 Proxy ✓ Sec 118 Minutes
✓ Sec 92 Annual return ✓ Sec 119 Inspection of minutes
✓ Sec 102 Explanatory statement ✓ Sec 94 Register of member
✓ Sec 115 Resolution special notice ✓ Sec 109 Poll
✓ Sec 121 Report of AGM
Quorum
Question 1A
Explain the provisions of the Companies Act, 2013 relating to quorum for general meeting of a public
company having total 30 members, of which, two members are bodies corporate and one member is
the President of India.
Whether the representatives appointed by body corporate and President of India to participate in the
general meeting shall be counted for quorum and can such representatives cast vote at that general
meeting?
Answer
According to section 103(1)(a)(i) of the Companies Act, 2013, unless the articles of the company
provide for a larger number, in case of public company, if the number of members as on the date of
meeting is not more than one thousand, five members personally present shall be the quorum for a
meeting of the company.

In the instant case, the quorum for the public company will be 5 members personally present.

In the said company, two members are bodies corporate and one member is the President of India.

Only members present in person and not by proxy are to be counted. Hence, proxies whether they
are members or not will have to be excluded for the purposes of quorum.

As per section 113 of the Companies Act, 2013, if a company is a member of another company, it
may authorize a person by resolution to act as its representative at a meeting of the latter company,

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(Law Maven)
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then such a person shall be deemed to be a member present in person and counted for the purpose of
quorum and shall be entitled to vote.

As per section 112 of the Companies Act, 2013, the President of India, if he is a member of a
company, may appoint such a person as he thinks fit, to act as his representative at any meeting of
the company. A person so appointed shall be deemed to be a member of such a company and thus
considered as member personally present and shall be entitled to vote.
Question 1B
(a) KMN Ltd. scheduled its annual general meeting to be held on 11th March, 2018 at 11:00
A.M. The company has 900 members. On 11th March, 2018 following persons were present by 11:30
A.M.
(1) P1, P2 & P3 shareholders
(2) P4 representing ABC Ltd.
(3) P5 representing DEF Ltd.
(4) P6 & P7 as proxies of the shareholders

(i) Examine with reference to relevant provisions of the Companies Act, 2013, whether quorum was
present in the meeting.
(ii) What will be your answer if P4 representing ABC Ltd., reached in the meeting after 11:30 A.M.?
(iii) In case lack of Quorum, discuss the provisions as applicable for an adjourned meeting in terms
of date, time & place.
(iv) What happens if there is no Quorum in the Adjourned meeting?
Answer
(a) According to section 103 of the Companies Act, 2013, unless the articles of the company provide
for a larger number, the quorum for the meeting of a Public Limited Company shall be 5 members
personally present, if number of members is not more than 1000.

(i)

(1) P1, P2 and P3 will be counted as three members.

(2) If a company is a member of another company, it may authorize a person by resolution to act as
its representative at a meeting of the latter company, then such a person shall be deemed to be a
member present in person and counted for the purpose of quorum. Hence, P4 and P5 representing
ABC Ltd. and DEF Ltd. respectively will be counted as two members.

(3) Only members present in person and not by proxy are to be counted. Hence, proxies whether they
are members or not will have to be excluded for the purposes of quorum. Thus, P6 and P7 shall not
be counted in quorum.
In the light of the provision of the Act and the facts of the question, it can be concluded that the
quorum for Annual General Meeting of KMN Ltd. is 5 members personally present. Total 5 members
(P1, P2, P3, P4 and P5) were present. Hence, the requirement of quorum is fulfilled.

(ii) The section further states that, if the required quorum is not present within half an hour, the
meeting shall stand adjourned for the next week at the same time and place or such other time and
place as decided by the Board of Directors.

Since, P4 is an essential part for meeting the quorum requirement, and he reaches after 11:30 AM
(i.e. half an hour after the starting of the meeting), the meeting will be adjourned as provided above.

(iii) In case of lack of quorum, the meeting will be adjourned as provided in section 103.

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(Law Maven)
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(Law Maven)
Mo: 62 62 62 143 8 / 9552 52 143 8
In case of the adjourned meeting or change of day, time or place of meeting, the company shall give
not less than 3 days' notice to the members either individually or by publishing an advertisement in
the newspaper.

(iv) Where quorum is not present in the adjourned meeting also within half an hour, then the members
present shall form the quorum.
Question 1C
The Articles of Association of Ajad Ltd. require the personal presence of 7 members to constitute
quorum of General Meetings. The company has 965 members as on the date of meeting. The
following persons were present in the extra-ordinary meeting to consider the appointment of
Managing Director:
(i) A, the representative of Governor of Uttar Pradesh.
(ii) B and C, shareholders of preference shares,
(iii) D, representing Y Ltd. and Z Ltd.
(iv) E, F, G and H as proxies of shareholders.
Can it be said that the quorum was present in the meeting?
Answer
According to section 103 of the Companies Act, 2013, unless the articles of the company provide for
a larger number in case of a public company, five members personally present if the number of
members as on the date of meeting is not more than one thousand, shall be the quorum.

In this case the quorum for holding a general meeting is 7 members to be personally present (higher
of 5 or 7). For the purpose of quorum, only those members are counted who are entitled to vote on
resolution proposed to be passed in the meeting.

Again, only members present in person and not by proxy are to be counted. Hence, proxies whether
they are members or not will have to be excluded for the purposes of quorum.

If a company is a member of another company, it may authorize a person by resolution to act as its
representative at a meeting of the latter company, then such a person shall be deemed to be a member
present in person and counted for the purpose of quorum Where two or more companies which are
members of another company, appoint a single person as their representative then each such company
will be counted as quorum at a meeting of the latter company.

Further the President of India or Governor of a State, if he is a member of a company, may appoint
such a person as he thinks fit, to act as his representative at any meeting of the company. A person
so appointed shall be deemed to be a member of such a company and thus considered as member
personally present.

In view of the above there are only three members personally present.
‘A’ will be included for the purpose of quorum. B & C have to be excluded for the purpose of quorum
because they represent the preference shares and since the agenda being the appointment of
Managing Director, their rights cannot be said to be directly affected and therefore, they shall not
have voting rights. D will have two votes for the purpose of quorum as he represents two companies
‘Y Ltd.’ and ‘Z Ltd.’ E, F, G and H are not to be included as they are not members but representing
as proxies for the members.

Thus, it can be said that the requirements of quorum has not been met and it shall not constitute a
valid quorum for the meeting.

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 CS LLM Arjun Chhabra
(Law Maven)
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Question 1D
PQ Limited is a public company having its registered office in Mumbai. It has 3680 members. The
company sent notice to all its members for its Annual general Meeting to be held on 2nd September
2019 (Monday) at 11 :00 AM at its registered office. On the day of meeting there were only 12
members personally present upto 11:30 AM. The Chairman adjourned the meeting to same day in
next week at the same time and place.

On the day of adjourned meeting only 10 members were personally present. The Chairman initiated
the meeting after 11:30 AM and passed the resolutions after discussion as per the agenda of the
meeting given in the notice. Comment whether the AGM conducted after adjournment is valid or not
as per the provisions of section 103 of Companies Act 2013 by explaining the relevant provisions in
this regard.

What would be your answer in the above case, if PQ Limited is a private company?
Answer
According to section 103 of the Companies Act, 2013, unless the articles of the company provide for
a larger number, in case of a public company, fifteen members personally present may fulfil the
requirement of quorum, if the number of members as on the date of meeting is more than one
thousand but up to five thousand.

If the specified quorum is not present within half-an-hour from the time appointed for holding a
meeting of the company, the meeting shall stand adjourned to the same day in the next week at the
same time and place, or to such other date and such other time and place as the Board may determine.

If at the adjourned meeting also, a quorum is not present within half-an-hour from the time appointed
for holding meeting the members present shall be the quorum.

In the instant case, there were only 12 members personally present on the day of meeting of PQ
Limited upto 11:30 AM. This was not in compliance with the required quorum as per the law. In the
adjourned meeting also, the required quorum was not present but in the adjourned meeting, the
members present shall be considered as quorum in line with the provisions of section 103.
Hence, the AGM conducted by PQ Limited after adjournment is valid.

As per the provisions of section 103(1)(6), in case of a private company, two members personally
present, shall be quorum for the meeting of a company. Therefore, in case, PQ Limited is a private
company., then only two members personally present shall be the quorum for AGM and there was
no need for adjournment.
Question 1E
Examine the validity of the following with reference to the relevant provisions of the Companies
Act, 2013: The Board of Directors of Shrey Ltd. called an extraordinary general meeting upon the
requisition of members. However, the meeting was adjourned on the ground that the quorum was not
present at the meeting. Advise the company.
Answer
According to section 100 (2) of the Companies Act 2013, the Board of directors must convene a
general meeting upon requisition by the stipulated minimum number of members.

As per Section 103 (2) (b) of the Companies Act, 2013, if the quorum is not present within half an
hour from the appointed time for holding a meeting of the company, the meeting, if called on the
requisition of members, shall stand cancelled. Therefore, the meeting stands cancelled and the stand
taken by the Board of Directors to adjourn it, is not proper.

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(Law Maven)
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 CS LLM Arjun Chhabra
(Law Maven)
Mo: 62 62 62 143 8 / 9552 52 143 8
Notice
Question 2A
Madurai Ltd. issued a notice for holding of its Annual general meeting on 7 th November 2018. The
notice was posted to the members on 16th October 2018. Some members of the company allege that
the company had not complied with the provisions of the Companies Act, 2013 with regard to the
period of notice and as such the meeting was valid. Referring to the provisions of the Act, decide:
(i) Whether the meeting has been validly called?
(ii) If there is a shortfall, state and explain by how many days does the notice fall short of the statutory
requirement?
(iii) Can the delay in giving notice be condoned?
Answer
According to section 101(1) of the Companies Act, 2013, a general meeting of a company may be
called by giving not less than clear twenty-one days' notice either in writing or through electronic
mode in such manner as may be prescribed.

Also, it is to be noted that 21 clear days mean that the date on which notice is served and the date of
meeting are excluded for sending the notice.

Further, Rule 35(6) of the Companies (Incorporation) Rules, 2014, provides that in case of delivery
by post, such service shall be deemed to have been effected - in the case of a notice of a meeting, at
the expiration of forty eight hours after the letter containing the same is posted.

Hence, in the given question:

(i) A 21 days’ clear notice must be given. In the given question, only 19 clear days’ notice is served
(after excluding 48 hours from the time of its posting and the day of sending and date of meeting).
Therefore, the meeting was not validly called.
(ii) As explained in (i) above, notice falls short by 2 days.
(iii) The Companies Act, 2013 does not provide anything specific regarding the condonation of delay
in giving of notice. Hence, the delay in giving the notice calling the meeting cannot be condoned.
Question 2B
Best Limited has decided to conduct its Annual General Meeting on 28th September 2021. They
have sent the notice of the meeting on 9th September 2021 (for which they have taken consent from
90% of the members entitled to vote thereat). Comment on the validity of notice of the Annual
General Meeting, as per the provisions of the Companies Act, 2013.
Answer
Section 101 of the Companies Act, 2013 states that to properly call a general meeting notice of at
least 21 clear days, before the meeting, should be given to all the members, legal representative of
any deceased member or the assignee of insolvent members, the auditors and directors, in writing or
electronic mode or other prescribed mode.

Generally, general meetings need to be called by giving at least a notice of 21 clear days.

However, a general meeting may be called after giving shorter notice than that specified in this sub-
section if consent, in writing or by electronic mode, is accorded thereto in the case of an annual
general meeting, by not less than ninety-five per cent. of the members entitled to vote thereat.

In the given question, the Annual General Meeting (AGM) was called by giving less than 21 days
clear days notice. Also, consent for calling the meeting at a shorter notice period was given by only
90% members (i.e. less than 95% members). Hence, such meeting cannot be said to be validity called.

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(Law Maven)
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(Law Maven)
Mo: 62 62 62 143 8 / 9552 52 143 8
Annual General Meeting
Question 3A
Neemrana Infotech Ltd. was incorporated on 1.4.2017. No General Meeting of the company has
been held so far. Explain the provisions of the Companies Act, 2013 regarding the time limit for
holding the first annual general meeting of the Company and the power of the Registrar to grant
extension of time for the First Annual General Meeting.
Answer
According to Section 96 of the Companies Act, 2013, every company shall be required to hold its
first annual general meeting within a period of 9 months from the closing of its first financial year.
Also, if a company holds its first annual general meeting as aforesaid, it shall not be necessary for
the company to hold any annual general meeting in the year of its incorporation:

It also provide that the Registrar may, for any special reason, extend the time within which any annual
general meeting, other than the first annual general meeting, shall be held, by a period not exceeding
three months.

In the given case, taking the first financial year of Neemrana Infotech Ltd is for the period 1st April
2017 to 31st March 2018, the first annual general meeting of the company should be held on or
before 31st December, 2018.

According to section 99, if any default is made in holding a meeting of the company in accordance
with section 96, the company and every officer of the company who is in default shall be punishable
with fine which may extend to one lakh rupees and in the case of a continuing default, with a further
fine which may extend to five thousand rupees for every day during which such default continues.
Question 3B
EFG Ltd. was incorporated on 1.4.2017. No General Meeting of the company has been held till
30.4.2019. Discuss the provisions of the Companies Act, 2013 regarding the time limit for holding
the first annual general meeting of the Company and the power of the Registrar to grant extension
of time for the First Annual General Meeting.
Answer
According to Section 96 of the Companies Act, 2013, every company shall be required to hold its
first annual general meeting within a period of 9 months from the date of closing of its first financial
year.

The first financial year of EFG Ltd is for the period 1st April 2017 to 31st March 2018, the first
annual general meeting (AGM) of the company should be held on or before 31st December,
2018.

The section further provides that the Registrar may, for any special reason, extend the time within
which any annual general meeting, other than the first annual general meeting, shall be held, by a
period not exceeding three months.

Thus, the first AGM of EFG Ltd. should have been held on or before 31st December, 2018. Further,
the Registrar does not have the power to grant extension to time limit for the first AGM.
Question 3C
Rijwan Limited, a listed company, is in the business of garment manufacturing and has its registered
office at 123, N Tower, Commercial Beta Complex, Biwadi, Rajasthan. The company has called its
6th Annual General Meeting at 3 PM on 22nd August, 2019 at Ansal Plaza, Bhiwadi. Some of the

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members of the company have opposed to calling of the meeting at Ansal Plaza. The company has
approached you to advise them in this regard.
Suppose, Rijwan Limited is an unlisted company and wants to call their 6th AGM at Jaipur, will your
answer differ.
Answer
According to section 96(2) of the Companies Act, 2013, every annual general meeting shall be called
during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday
and shall be held either at the registered office of the company or at some other place within the city,
town or village in which the registered office of the company is situate.

Provided that annual general meeting of an unlisted company may be held at any place in India if
consent is given in writing or by electronic mode by all the members in advance.

Thus, in the first case, the company is rightful in calling the Annual General meeting at Ansal Plaza.

In the second scenario, in case of an unlisted company, annual general meeting may be held at any
place in India if consent is given in writing or by electronic mode by all the members in advance.
Hence, if consent is given in writing or by electronic mode by all the members in advance, the AGM
can be called at Jaipur, otherwise not.
Question 3D
Examine the validity of the following statements in respect of Annual General Meeting (AGM) as
per the provisions of the Companies Act, 2013:

(i) The first AGM of a company shall be held within a period of six months from the date of closing
of the first financial year.

(ii) The Registrar may, for any special reason, extend the time within which the first AGM shall be
held.

(iii) Subsequent (second onwards) AGMs should be held within 6 months from closing of the
financial year.

(iv) There shall be a maximum interval of 15 months between two AGMs.

Answer
(i) According to section 96 of the Companies Act, 2013, first annual general meeting of the company
should be held within 9 months from the closing of the first financial year Hence, the statement that
the first AGM of a company shall be held within a period of six months from the date of closing of
the first financial year is incorrect.

(ii) According to proviso to section 96(1), the Registrar may, for any special reason, extend the time
within which any annual general meeting, other than the first annual general meeting, shall be held,
by a period not exceeding three months. Thus, the Registrar cannot extend (for any reason) the time
period within which the first AGM shall be held. Given statement is incorrect.

(iii) According to section 96, subsequent AGM (i.e. second AGM onwards) of the company should
be held within 6 months from the closing of the financial year. Hence, the given statement is correct.

(iv) According to section 96, the gap between two annual general meetings should not exceed 15
months. Hence, the given statement is correct, that there shall be a maximum interval of 15 months
between two AGMs.

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 CS LLM Arjun Chhabra
(Law Maven)
Mo: 62 62 62 143 8 / 9552 52 143 8
Question 3E
ABC Limited is an unlisted company, having its registered office at Kolkata. The Annual General
Meeting was held at Goa on 1st July 2021 at 3.00 PM and concluded at 8.00 PM. Consent of all the
members to conduct AGM at Goa were received by 24th June 2021 by Email.
Examine the validity of the meeting as per the provisions of the Companies Act, 2013.
Answer
Section 96(2) of the Companies Act, 2013, states that every annual general meeting shall be called
during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday
and shall be held either at the registered office of the company or at some other place within the city,
town or village in which the registered office of the company is situated.

Provided that annual general meeting of an unlisted company may be held at any place in India if
consent is given in writing or by electronic mode by all the members in advance.

In the given question, ABC Limited is an unlisted company and consent of all members to conduct
the AGM at Goa has been received in advance (24th June, 2021). Also, the meeting was started well
within the prescribed time i.e. at 3.00 PM. Hence, the meeting was validly called.
Proxy
Question 4A
A company received a proxy form 54 hours before the time fixed for the start of the meeting. The
company refused to accept the proxy form on the ground that the Articles of the company provided
that a proxy form must be filed 60 hours before the start of the meeting. Define proxy and decide
under the provisions of the Companies Act, 2013, whether the proxy holder can compel the company
to admit the proxy in this case?
Answer
Section 105 of the Companies Act, 2013 deals with the provisions of proxy for meetings.

Section 105(1) of the Act provides that any member of a company entitled to attend and vote at a
meeting of the company shall be entitled to appoint another person as a proxy to attend and vote at
the meeting on his behalf.

Further, Section 105(4) of the Act provides that a proxy received 48 hours before the meeting will
be valid even if the articles provide for a longer period.

In the given case, the company received a proxy form 54 hours before the time fixed for start of the
meeting. The Company refused to accept proxy on the ground that articles of the company provides
filing of proxy before 60 hours of the meeting. In the said case, in line with requirement of the above
stated legal provision, a proxy received 48 hours before the meeting will be valid even if the articles
provide for a longer period. Accordingly, the proxy holder can compel the company to admit the
proxy.
Question 4B
A General Meeting was scheduled to be held on 15th April, 2019 at 3.00 P.M. As per the notice the
members who are unable to attend a meeting in person can appoint a proxy and the proxy forms duly
filled should be sent to the company so as to reach at least 48 hours before the meeting. Mr. X, a
member of the company appoints Mr. Y as his proxy and the proxy form dated 10-04-2019 was
deposited by Mr. Y with the company at its registered Office on 11-04- 2019. Similarly, another
member Mr. W also gives two separate proxies to two individuals named Mr. M and Mr. N. In the
case of Mr. M, the proxy dated 12-04-2019 was deposited with the company on the same day and

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the proxy form in favour of Mr. N was deposited on 14-04- 2019. All the proxies viz., Y, M and N
were present before the meeting.

According to the provisions of the Companies Act, 2013, who would be the persons allowed to
represent as proxies for members X and W respectively?
Answer
A Proxy is an instrument in writing executed by a shareholder authorizing another person to attend
a meeting and to vote thereat on his behalf and in his absence. As per the provisions of Section 105
of the Companies Act, 2013, every shareholder who is entitled to attend and vote has a statutory right
to appoint another person as his proxy. t is not necessary that the proxy be a member of the company.
Further, any provision in the articles of association of the company requiring instrument of proxy to
be lodged with the company more than 48 hours before a meeting shall have effect as if 48 hours had
been specified therein. The members have a right to revoke the proxy's authority by voting himself
before the proxy has voted but once the proxy has voted the member cannot retract his authority.

Where two proxy instruments by the same shareholder are lodged of in such a manner that one is
lodged before and the other after the expiry of the date fixed for lodging proxies, the former will be
counted.

Thus, in case of member X, the proxy Y will be permitted to vote on his behalf as form for appointing
proxy was submitted within the permitted time.

However, in the case of Member W, the proxy M (and not Proxy N) will be permitted to vote as the
proxy authorizing N to vote was deposited in less than 48 hours before the meeting.
Question 4C
Sirhj, a shareholder, gives a notice for inspecting proxies, five days before the meeting is scheduled
and approaches the company two days before the scheduled meeting for inspecting the same. What
is the legal position relating to his actions as per the provisions of the Companies Act, 2013?
Answer
Under section 105 (8) of the Companies Act, 2013 every member entitled to vote at a meeting of the
company, or on any resolution to be moved thereat, shall be entitled during the period beginning
twenty-four hours before the time fixed for the commencement of the meeting and ending with the
conclusion of the meeting. to inspect the proxies lodged, at any time during the business hours of the
company, provided not less than three days' notice in writing of the intention so to inspect is given
to the company.

In the given case, Sirhj has given proper notice.

However, such inspection can be undertaken only during the period beginning 24 hours before the
time fixed for the commencement of the meeting and ending with the conclusion of the meeting. So,
Sirhj can undertake the inspection only during the above mentioned period and not two days prior to
the meeting.
Annual Return
Question 5A
Due to heavy rains and floods Chennai Handloom Limited was unable to convene annual general
meeting upto 30th September, 2017. The company has not filed the annual financial statements,
or the annual return as the directors of the company are of the view that since the annual general
meeting did not take place, the period of 60 days for filing of annual return is not applicable and
thus, there is no contravention of Section 92 of the Companies Act, 2013. Discuss whether the
contention of directors is correct.

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(Law Maven)
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Answer
As per the provisions of Section 92(4) of the Companies Act, 2013, every company shall file with
the Registrar a copy of the annual return, within 60 days from the date on which the annual general
meeting is held or where no annual general meeting is held in any year, within 60 days from the
date on which the annual general meeting should have been held, together with the statement
specifying the reasons for not holding the annual general meeting, with such fees or additional fees
as may be prescribed within the time as specified, under section 403.

In the given question, even in the case of not holding of Annual General Meeting, the company shall
file with the Registrar a copy of the annual return along with a statement specifying the reasons for
not holding the annual general meeting within 60 days from the date on which the annual general
meeting should have been held. Hence, the contention of directors is not correct.
Question 5B
As per the provisions of the Companies Act, 2013, every company is required to file with the
Registrar of Companies, the Annual Return as prescribed in section 92, in Form MGT -7. Explain
the particulars required to be contained in it.
Answer
a) The address of registered office of the company, its principal business activities, and the
particulars of its holding, subsidiary and associate companies
b) Its shares, debentures and other securities and shareholding pattern
c) * * * [Omitted]
d) Its members and debenture-holders, and changes in the members and debenture-holders since the
close of the previous FY
e) Its promoters, directors and key managerial personnel, and changes in directors and key
managerial personnel since the close of the previous FY
f) Meetings of members or a class thereof, and of the Board and its various committees, and
attendance details
g) Remuneration of directors and key managerial personnel (In case of private companies, which
are small companies, aggregate amount of remuneration drawn by directors is to be disclosed)
h) Penalty or punishment imposed on the company, directors or officers and details of compounding
of offences and appeals made
i) Matters relating to certification of compliances and disclosures
j) Details with respect to shares held by the Foreign Institutional Investors
k) Such other matters as may be prescribed.
Explanatory statement
Question 6A
Om Limited served a notice of General Meeting upon its members. The notice stated that the
following resolutions will be considered at such meeting:
(i) Resolution to increase the Authorised share capital of the company.
(ii) Appointment and fixation of the remuneration of Mr. Prateek as the auditor.
A shareholder complained that the amount of the proposed increase and the remuneration was not
specified in the notice. Is the notice valid under the provisions of the Companies Act, 2013?
Answer
(a) Under section 102(2)(b) of the Companies Act, 2013, in the case of any meeting other than an
Annual General Meeting, all business transacted thereat shall be deemed to be special business.

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Further, under section 102(1), an explanatory a statement setting out the following material facts
concerning each item of special business to be transacted at a general meeting, shall be annexed to
the notice calling such meeting., namely: -
(a) the nature of concern or interest, financial or otherwise, if any, in respect of each items, of:
(i) every director and the manager, if any;
(ii) every other key managerial personnel; and
(iii) relatives of the persons mentioned in sub-clauses (i) and (ii);

(b) any other information and facts that may enable members to understand the meaning, scope and
implications of the items of business and to take decision thereon.

The information about the amount is also a material fact that may enable members to understand the
meaning and implication of items of business to be transacted and to take decision thereon.

Section 102 also prescribes ordinary businesses for which explanatory statement is not required.

Part (i) of the question relating to increase in the Authorized Capital falls under special business and
hence in the absence of amount of proposed increase of share capital, the notice will be treated as
invalid.

Part(ii) is an ordinary business and hence explanatory statement is not required. However,
considering the two resolutions mentioned in the question are to be passed in the same meeting,
notice of the meeting is invalid.

Thus, the objection of the shareholder is valid since the details on the item to be considered are
lacking.

The information about the amount is a material fact with reference to the proposed increase of
authorized share capital and remuneration of Mr. Prateek as the auditor.

The notice is, therefore, not a valid notice under Section 102 of the Companies Act, 2013.
Question 6B
M. H. Company Limited served a notice of general meeting upon its shareholders. The notice stated
that the issue of sweat equity shares would be considered at such meeting. Mr. A', a shareholder of
the M. H. Company Limited complains that the issue of sweat equity shares was not specified fully
in the notice. Is the notice issued by M. H. Company Limited regarding issue of sweat equity shares
valid according to the provisions of the Companies Act, 2013? Explain in detail.
Answer
Provision same as above

Thus, the objection of the member is valid since the complete details about the issue of sweat equity
should be sent with the notice. The notice is, therefore, not a valid notice under Section 102 of the
Companies Act, 2013.
Question 6C
Zorab Limited served a notice of General Meeting upon its members. The notice stated that a
resolution to increase the share capital of the Company would be considered at such meeting. A
shareholder complained that the amount of the proposed increase was not specified in the notice. Is
the notice valid?

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Answer
Provision same as above

Thus, the objection of the shareholder is valid since the details on the item to be considered are
lacking. The information about the amount is a material fact with reference to the proposed increase
of share capital. The notice is, therefore, not a valid notice under Section 102 of the Companies Act,
2013.
Resolution requiring special notice
Question 7A
Members of ZA Ltd. holding less than 1% of total voting power want the company to give a special
notice to move a resolution for appointment of an auditor other than retiring auditor. Explain whether
members have complied with relevant provisions of the Companies Act, 2013 in making their
request.
Answer
Resolutions requiring special notice [Section 115]

Section 115 of the Companies Act, 2013 states that where any provision of this Act specifically
requires or Articles of Association of a company so require that a special notice is required for
passing any resolution, then the notice of the intention to move such resolution shall be given to the
company by such number of members holding not less than 1% of the total voting power, or holding
shares on which such aggregate sum not exceeding Rs. 5,00,000/- has been paid-up.

As per rule 23, A special notice required to be given to the company shall be signed, either
individually or collectively by such number of members holding not less than one percent of total
voting power or holding shares on which an aggregate sum of not less than 5,00,000 rupees has been
paid up on the date of the notice.

Further, Section 115 of the Act specifies that special notice is required to appoint as auditor a person
other than a retiring auditor under Section 140 of the Act.

According to the given facts in the question, there is non-compliance of requirement of section 115
as stated above i.e. the notice of the intention to move such resolution as to appointment of auditor
other than retiring auditor was given by members of ZA Ltd. holding less than 1% of the total voting
power.
Question 7B
Abhiyogic Ltd. having 1,000 members with paid-up capital of R 1 crore, decided to hold its Annual
General Meeting (AGM) on 21st August, 2022, and it received a notice on 2nd July, 2022, from its
60 members holding paid-up capital of 7 lakhs, in aggregate, for a resolution to be passed at the
AGM for appointing Vedya & Co., as its auditor from F.Y. 2022-23 onwards, instead of its existing
auditor, Chepal & Co. which was originally appointed for 5 years term and had completed its 4 years
term.
Such a notice for resolution was forthwith send by the company to Chepal & Co. which gave its
representation in writing to the company along with a request for its notification to the members of
the company, but it was received too late (3 days before the meeting) by the company.
In the context of aforesaid facts, please answer to the following question(s)

(a) Whether the said notice was given by adequate number of members within the prescribed time
limit to Abhiyogic Ltd.?

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(b) Whether the company was bound to send to its members such representation made by Chepal &
Co. and if it could not have been send, then in such case, what was the responsibility(ies) of the
company?
Answer
(a) As per section 140(4) of the Companies Act, 2013, resolution for appointment of an auditor other
than the retiring auditor at an Annual General Meeting requires special notice. As per Section 115 of
the Companies Act, 2013, read with rule 23 of Companies (Management and Administration) Rules,
2014:

Where, by any provision contained in this Act or in the Articles of Association of a company, special
notice is required for passing any resolution, then the notice of the intention to move such resolution
shall be given to the company by such number of members holding not less than 1% of the total
voting power, or holding shares on which such aggregate sum not exceeding five lakh rupees, as may
be prescribed, has been paid-up.

The afore-mentioned notice shall be sent by members to the company not earlier than 3 months but
at least 14 days before the date of meeting at which the resolution is to be moved, exclusive of the
day on which the notice is given and the day of the meeting.

Here, Abhiyogic Ltd. is having 1,000 members with paid-up capital of Rs. 1 crore, and it received a
notice from its 60 members holding paid-up capital of Rs. 7 lakhs, in aggregate, on 2nd July, 2022
for a resolution to be passed at the AGM to be held on 21st August, 2022.

As the members who gave the notice hold more than 5 lakhs in the paid-up capital of the company,
they were eligible to give such notice.
Further, the notice should have been given not earlier than 3 months but at least 14 days before the
date of meeting - 21st August, 2022, and the notice was given on 2nd July, 2022 i.e. within the
prescribed time limit.

Thus, it can be said that the said notice was made by adequate number of members within the
prescribed time limit to Abhiyogic Ltd.

(b) As per Section 140(4) of the Companies Act, 2013:

Where notice is given of a resolution appointing as auditor a person other than a retiring auditor and
the retiring auditor makes with respect thereto representation in writing to the company (not
exceeding a reasonable length) and requests its notification to members of the company, the company
shall, unless the representation is received by it too late for it to do so,-

(1) in any notice of the resolution given to members of the company, state the fact of the
representation having been made; and

(2) send a copy of the representation to every member of the notice of the meeting is sent, whether
before or after the receipt of the representation by the company to whom notice of the meeting is
sent, whether before or after the receipt of the representation by the company.

However, in the present case, Abhiyogic Ltd. received the representation made by Chepal & Co. too
late and accordingly it was not bound to send such representation to its members even though it was
requested by Chepal & Co. to do so.

Further, as per Section 140(4) of the Companies Act, 2013, if a copy of the representation is not sent
as aforesaid because it was received too late or because of the company's default, the auditor may

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(without prejudice to his right to be heard orally) require that the representation shall be read out at
the meeting such a copy of representation thereof shall be filed with the Registrar.

Accordingly, Abhiyogic Ltd., apart from giving to right to be heard orally to Chepal & Co. shall also
made the representation read out at the AGM, if so required by Chepal & Co., and shall also file such
representation with the Registrar, respectively.
Restriction on voting rights
Question 8
'X' a member of LKM Ltd. is holding 250 shares, which are partly paid. The company held its general
meeting where voting right was denied to ‘X' claiming he has not paid the calls on the shares held
by him. Examine the validity of company’s denial to 'X' with reference to the relevant provisions of
the Companies Act, 2013, assuming that Articles of association of the Company do not restrict the
voting right of such members.
Answer
Restriction on voting rights [Section 106 of the Companies Act, 2013] According to the said Section:
(1) Notwithstanding anything contained in this Act, the articles of a company may provide that no
member shall exercise any voting right in respect of any shares registered in his name on which any
calls or other sums are presently payable by him have not been paid, or in regard to which the
company has exercised any right of lien.

(2) A company shall not, except on the grounds specified in sub-section (1), prohibit any member
from exercising his voting right on any other ground.

In the given question, Mr. X (member) holding 250 shares of LKM Ltd. has not paid certain calls on
the shares. The company has denied his voting rights in the general meeting though the Articles of
association of the company does not contain any restriction in the voting rights of such members.

On examination of the above provisions of the Act and the facts of the case, LKM Ltd.’s denial to
‘X’ for exercising his voting rights is not valid.
E Voting
Question 9A
If a member of a listed company who has casted his vote through electronic voting can attend general
meeting of the company and change his vote subsequently and can he appoint a proxy?
Answer
According to Rule – 20(4)(iii)(C) of the Companies (Management and Administration) Rules, 2014,
the notice of the meeting shall clearly state that the members who have cast their vote by remote e-
voting prior to the meeting may also attend the meeting but shall not be entitled to cast their vote
again.
In the instant case, a member of a listed company who has casted his vote through electronic voting
can attend general meeting of the company but cannot change his vote subsequently and is not
permitted to appoint a proxy.
Question 9B
Explain the provisions of e-voting in an annual general meeting in the following cases as per the
Companies Act, 2013:
(i) A and his wife B' has joint Demat Account in Alfa Investment Ltd. in such a case, who will cast
the vote in e-voting system?
(ii) AGM is going to be held on 07-09-2020. Then what will be the e- voting period and the time of
closing?

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Answer
Joint shareholders must concur in voting unless the articles provide to the contrary.

The voting in case of joint shareholders is done in the order of seniority, which is determined on the
basis of the order in which their names appear in the register of members/ shareholders. The joint-
holders have a right to instruct the company as to the order in which their names are to appear in the
register.

As per Rule 21 of the Companies (Management and Administration) Rules, 2014, the Scrutinizers
shall arrange for Polling papers and distribute them to the members and proxies present at the
meeting; in case of joint shareholders, the polling paper shall be given to the first named holder or
in his absence to the joint holder attending the meeting as appearing in the chronological order in the
folio.

Thus, in the given case, 'A' or his wife 'B', whosoever names appears first in chronological order in
the register of members/ shareholders shall be entitled to vote.

Time period for e-voting: The facility for remote e-voting shall remain open for not less than three
days and shall close at 5.00 p.m. on the date preceding the date of the general meeting.

Thus, if the Annual General Meeting is going to be held on 7.9.2020, the facility for remote e- voting
shall open on 4.9.2020 and close at 5.00 p.m. on 6.9.2020.
Ordinary Resolution V Special Resolution
Question 10
Difference between ordinary resolution and Special resolution Ordinary Resolution
Answer
1. Ordinary
(a) The notice of the GM has been duly given.
resolution -
Conditions (b) The votes cast in favour of the resolution are required to exceed the votes
cast against the resolution.
2. Special
(a) The notice of the GM has been duly given.
resolution -
Conditions (b) The intention to propose the resolution as a special resolution has been duly
specified in the notice of GM or other intimation given to the members.
(c) The votes cast in favour of the resolution are required to be not less than 3
times the votes cast against the resolution.
3. Manner of Votes may be cast by way of -
casting votes (a) show of hands;
(b) poll;
(c) electronically; or
(d) postal ballot.

Votes may be cast by -

(a) members present in person; or
(b) proxies (where proxies are allowed)

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Maintenance of the Register of Members & Inspection
Question 11
M/s. Techno Ltd. maintains its Register of Members at its registered office in Mumbai. A group of
members residing in Kolkata want to keep the register of members at Kolkata.
(i) Explain with provisions of Companies Act, 2013, whether the company can keep the Registers
and Returns at Kolkata.
(ii) Does Mr. Ranjit, Director (but not a shareholder) of the company have the right to inspect the
Register of Members?
Answer
Maintenance of the Register of Members etc.: As per section 94(1) of the Companies Act, 2013, the
registers required to be kept and maintained by a company under section 88 and copies of the annual
return filed under section 92 shall be kept at the registered office of the company:

Provided that such registers or copies of return may also be kept at any other place in India in which
more than one-tenth of the total number of members entered in the register of members reside, if
approved by a special resolution passed at a general meeting of the company.

So, Techno Ltd. can also keep the registers and returns at Kolkata after compliance with the above
provisions, provided more than one-tenth of the total number of members entered in the register of
members reside in Kolkata.

(ii) As per section 94(2) of the Companies Act, the inspection of the records, i.e. registers and
indices, and annual return can be done by members, debenture- holders, other security holders or
beneficial owners of the company.
Accordingly, a director Mr. Ranjit, who is not a shareholder of the company, has no right to inspect
the Register of Members of company, as per the provisions of this section.
Minutes
Question 12A
Veena Ltd. held its Annual General Meeting on September 15, 2018. The meeting was presided over
by Mr. Mohan Rao, the Chairman of the Company's Board of Directors. On September 17, 2018,
Mr. Mohan Rao, the Chaiman, without signing the minutes of the meeting, let India to look after his
father who fell sick in London. Referring to the provisions of the Companies Act, 2013, state the
manner in which the minutes of the above meeting are to be signed in the absence of Mr. Mohan Rao
and by whom?
Answer
Section 118 of the Companies Act, 2013 provides that every company shall prepare, sign and keep
minutes of proceedings of every general meeting, including the meeting called by the requisitionists
and all proceedings of meeting of any class of shareholders or creditors or Board of Directors or
committee of the Board and also resolution passed by postal ballot within thirty days of the
conclusion of every such meeting concerned. Minutes kept shall be evidence of the proceedings
recorded in a meeting.

By virtue of Rule 25 of the Companies (Management and Administration) Rules, 2014 read with
section 118 of the Companies Act, 2013, each page of every such book shall be initialled or signed
and the last page of the record of proceedings of each meeting or each report in such books shall be
dated and signed by, in the case of minutes of proceedings of a general meeting, by the chairman of
the same meeting within the aforesaid period of thirty days or in the event of the death or inability
of that chairman within that period, by a director duly authorized by the Board for the purpose.

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Therefore, the minutes of the meeting referred to in the case of Veena Ltd. can be signed in the
absence of Mr. Mohan Rao, by any director, authorized by the Board in this respect.
Question 12B
In a General meeting of Alpha Limited, the chairman directed to exclude certain matters detrimental
to the interest of the company from the minutes, Mukesh, a shareholder contended that the minutes
of the meeting must contain fair and correct summary of the proceedings thereat. Decide, whether
the contention of Mukesh is maintainable under the provisions of the Companies Act, 2013?
Answer
Under Section 118 (5) of the Companies Act, 2013, there shall not be included in the Minutes of a
meeting, any matter which, in the opinion of the Chairman of the meeting
(i) is or could reasonably be regarded as defamatory of any person;
(ii) is irrelevant or immaterial to the proceeding; or
(iii) is detrimental to the interests of the company:

Further, under section 118(6) the chairman shall exercise absolute discretion in regard to the
inclusion or non-inclusion of any matter in the Minutes on the grounds specified in sub-section (5)
above.

Hence, in view of the above, the contention of Mukesh, a shareholder of Alpha Limited is not valid
because the Chairman has absolute discretion on the inclusion or exclusion of any matter in the
minutes for aforesaid reasons.
Question 12C
Mr. Laurel, a shareholder in Hardly Limited, a listed company, desires to inspect the minutes book
of General Meetings and to have copy of some resolutions. In the light of the provisions of the
Companies Act, 2013 answer the following
(i) Whether he can inspect the minutes book and to have copies of the minutes at free of cost?
(ii) Whether he can authorize his friend to inspect the minutes book on behalf of him by signing a
power of authority?
Answer
As per section 119 of the Companies Act, 2013, the books containing the minutes of the proceedings
of any general meeting of a company shall be open for inspection, during business hours, by any
member, without charge, subject to such reasonable restrictions as specified in the articles of the
company or as imposed in the general meeting.
Any member shall be entitled to be furnished, within seven working days after he has made a request
in that behalf to the company, and on payment of such fees as may be prescribed, with a copy of any
minutes.

Accordingly, following are the answers:

(i) As in given case, Mr. Laurel, in requirement with law, he can inspect the minutes book and so to
have soft copies of the same up to last three years.

(ii) As provision does not specify anything on authorizing any one else to inspect the minutes book.
Therefore, Mr. Laurel cannot authorize his friend to inspect the minutes book on behalf of him.
Report of AGM
Question 13
Pristine Limited, a listed public company, conducted its Annual General Meeting on 31st August,
2020. However, 10 days have passed since 31st August, 2020, but it has still not filed report on
Annual General Meeting. The Accountant of the company has approached you to advise them
whether Pristine Limited is required to file report on Annual General Meeting?

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Answer
According to Section 121, every listed public company shall prepare a report on each annual general
meeting including the confirmation to the effect that the meeting was convened held and conducted
as per the provisions of the Act and the rules made thereunder. A copy of the report is to be filed with
the Registrar in Form No. MGT. 15 within thirty days of the conclusion of AGM along with the
prescribed fee. If the company does not file such report on Annual General Meeting within 30 days
of the conclusion of the Annual General Meeting then the company and defaulting officers are liable
for prescribed penalties.

Since, Pristine Ltd. is a listed company, hence it has to file a copy of annual Report with the Registrar
within 30 days from 31st August, 2020.
Poll
Question 14
Examine the validity of the following decisions of the Board of Directors with reference of the
provisions of the Companies Act, 2013.

(i) In an Annual General Meeting of a company having share capital, 80 members present in person
or by proxy holding more than 1/10" of the total voting power, demanded for poll. The chairman of
the meeting rejected the request on the ground that only the members present in person can demand
for poll

(ii) In an annual general meeting, during the process of poll, the members who earlier demanded for
poll want to withdraw it. The chairman of the meeting rejected the request on the ground that once
poll started, it cannot be withdrawn.
Answer
Section 109 of the Companies Act, 2013 provides for the demand of poll before or on the declaration
of the result of the voting on any resolution on show of hands. Accordingly, law says that:

Before or on the declaration of the result of the voting on any resolution on show of hands, a poll
may be ordered to be taken by the Chairman of the meeting on his own motion, and shall be ordered
to be taken by him on a demand made in that behalf

(a) In the case a company having a share capital, by the members present in person or by proxy,
where allowed, and having not less than one-tenth of the total voting power or holding shares on
which an aggregate sum of not less than five lakh rupees or such higher amount as may be prescribed
has been paid-up; and

(b) in the case of any other company, by any member or members present in person or by proxy,
where allowed, and having not less than one tenth of the total voting power.

Withdrawal of the demand: The demand for a poll may be withdrawn at any time by the persons who
made the demand.

Hence, on the basis on the above provisions of the Companies Act, 2013:
(i) The chairman cannot reject the demand for poll subject to provision in the articles of company.
(ii) The chairman cannot reject the request of the members for withdrawing the demand of the Poll.

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