The company, Fateh Limited, engaged in the business of electronics manufacturing, has a paid-up share capital of 12.50 crore and a shareholder base…

CA Intermediate · Corporate and Other Laws · RTP · September 2025
The company, Fateh Limited, engaged in the business of electronics manufacturing, has a paid-up share capital of 12.50 crore and a shareholder base comprising 3,500 members. The company's equity shares are listed on a recognized stock exchange, and it has a history of strong shareholder participation in general meetings. On 10th May, 2025, the Board of Directors issued a notice convening the Annual General Meeting (AGM) to be held on Saturday, 13th June, 2025 at 11:00 AM at the company's registered office in Mangalore, for considering ordinary and special business items, including approval of the financial statements and appointment of a new independent director. On the scheduled date, however, the required quorum, was not present. Consequently, the meeting was adjourned to the same time and place on the next Saturday, i.e., 20th June, 2025. In connection with the meeting and its adjournment, the company's compliance officer has raised the following queries for legal clarification: (i) If only two members (in person) are present at the adjourned meeting on 20th June, 2025, will the meeting be validly held and its business transacted? (ii) Assume that on 13th June, 2025, 16 members (in person) were present, but due to disorderly conduct by a few shareholders during the proceedings, the Chairman exercised his discretion and adjourned the meeting to 20th June, 2025. On that date, only three members (in person) attended the adjourned meeting. Would such a meeting be valid in terms of quorum requirements? The company has approached you to analyse both scenarios with reference to the provisions of the Companies Act, 2013.

Suggested Answer and Working Notes:

(a) According to section 103 of the Companies Act, 2013, in case of a public company, unless the articles of the company provide for a larger number, if the number of members is more than 1000 but upto 5000, then the quorum shall be 15 members personally present. If the quorum is not present within half-an-hour from the time appointed for holding a meeting of the company: (a) 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; or (b) the meeting, if called by requisitionists under section 100, shall stand cancelled: Provided that in case of an adjourned meeting or of a change of day, time or place of meeting under clause (a), the company shall give not less than three days' notice to the members either individually or by publishing an advertisement in the newspapers (one in English and one in vernacular language) which is in circulation at the place where the registered office of the company is situated. Quorum not present at the adjourned meeting also: Where quorum is not present in the adjourned meeting also within half an hour, then the members present shall form the quorum. In the given question, the quorum for the given company having 3500 members shall be 15 members personally present. (i) Where quorum is not present in the adjourned meeting (i.e. 20th June, 2025) also within half an hour, then the two members present shall form the quorum. In this case, the meeting held with 2 members shall be deemed to be validly held and the business transacted thereat shall also be deemed to be validly done. (ii) The meeting held on 13th June, 2025 had 16 members present. Hence, the quorum was present. However, the meeting was adjourned due to unruly behaviour of some members and not for want of quorum. In the meeting held on 20th June, 2025, only 3 members in person were present. In such a case, these 3 members shall not constitute the quorum and hence, shall stand further adjourned.

Topics: Management & Administration

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