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Shorter Notice for Convening General Meetings of Shareholders

The provisions regarding convening of general meeting of shareholders after giving shorter notice is prescribed under the provisos to sub-section (1) of section 101 of the Companies Act, 2013.

Standard notice period (minimum)

A general meeting of the members of a company may be called by giving not less than clear 21 days' notice. Notice can be served either in writing or through electronic mode viz. email, etc. [Section 101(1)]

What is a Shorter Notice?


When the above condition of giving not less than clear 21 days' notice is not complied with for some reason and the company wants to call for a general meeting, shorter notice is served on the members.


Notice period is shorter than the requirement of clear 21 days.



When such situations may arise?

There are different circumstances wherein the company might have to serve shorter notice in order to conduct a general meeting.


Example:


1) Urgently the meeting has to be called to deal with some agendas to take approval of the shareholders, where such agendas/items of businesses are very important for the company to finalise at the earliest and the company can not wait for 21 days in this matter.


2) The due date of holding the annual general meeting is in the near future and there is no time to give 21 clear days' notice. The AGM date was finalised at the last moment.


3) The last date for taking approval of the shareholders as required is falling on such a date that it is in the near future and the company had forgotten/ignored/ was unaware to take approval earlier. And, as there is no time to give 21 clear days' notice.






Whose consent is required?


Type of Meeting
Type of Company
Consent by
Annual General Meeting (AGM)
All kinds of companies 
Not less than 95% of the members entitled to vote thereat
Any other general meeting viz. EGM, etc
Companies having a share capital
Members holding a majority in number of members entitled to vote and who represent not less than 95% of such part of the paid-up share capital of the company as gives a right to vote at the meeting
Companies having no share capital
Members having not less than 95% of the total voting power exercisable at that meeting

Provided that where any shareholder is entitled to vote only on some resolution(s) to be moved at a meeting and not on the others, those shareholders shall be taken into account for the above purposes in respect of the former resolution(s) and not in respect of the latter.



Format of Shorter Notice


It is inadvertent to mention that the consent has to be taken before the meeting begins.

The format of the consent letter to be obtained from the shareholders is available here.


Mode of taking consent for Shorter Notice


The consent from the shareholders can be obtained either in writing or by electronic mode.




Time Limit for calling general meeting with a shorter notice

There is no time limit prescribed for serving of such short notices. It can even be done on the same day when the general meeting is to be held. 

However, the Articles of Association of a company may specify a time limit for such shorter notice.



Case Laws

(1) In AIR 1928 PC 180 Parashuram Detaram Shamdasani v. Tata Industrial Bank Ltd., it was held that the shareholders knowing the work to be transacted at the meeting and remaining absent cannot subsequently complain about insufficiency of notice for convening the meeting.


(2) Shailesh Harilal Shan And Others, ... vs Matushree Textiles Limited And [1993] The Learned Judge stated that "In our judgment, the plaintiffs have not suffered any prejudice whatsoever by notice being of only 20 clear days instead of 21 clear days. The share holding of the plaintiffs is extremely negligible being 0.3% and it would be entirely unreasonable to invalidate the business transacted at the Annual General Meeting at the behest of these few shareholders and to the detriment of large body of shareholders who had unanimously approved the resolutions moved at the meetings.

Comments

  1. Now as the SS-1 & SS-2 both have been repealed and revised from October 2017 onwards. Can the Board Meeting and AGM can be held on same day? Also in the same Board Meeting the approval for venue, day, date & time be approved to conduct the AGM.

    ReplyDelete
    Replies
    1. Yes Shubham. As long as the 95% criteria is complied with, it can be done.

      Delete

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