A company intends to hold its Annual General Meeting (AGM) on shorter notice due to urgent business requirements. However, some shareholders argue…

Under normal circumstances, companies must provide shareholders with a statutory notice period before conducting an AGM. However, as per Section 101 of the Companies Act, 2013, an AGM can be convened on shorter notice if a specific percentage of shareholders approve it. In this case, the approval is determined by the number of shareholders rather than the number of shares they hold. Conditions for Holding an AGM on Short Notice: An AGM may be conducted on shorter notice only if at least 95% of the members entitled to vote consent in writing or through electronic means.Unlike other general meetings (such as an EGM), where both the number of members and their shareholding percentage are considered, AGMs strictly require 95% approval from shareholders, irrespective of the number of shares they own. Hence, this provision ensures that an AGM or other general meetings can be held on only when a majority of shareholders agree, thereby preventing any unfair advantage to a small group of shareholders or the board of directors. It strikes a balance and flexibility to deal with urgent company matters as well as to protect the shareholder rights. Thus, in the case of an AGM, the argument of larger shareholders having more influence is invalid, as the Companies Act prioritizes shareholder consensus over shareholding percentage for short-notice approvals.