Understanding Section 101 of Companies Act, 2013

“Decoding Section 101 of Companies Act 2013: Notice for General Meetings – Key requirements for notifying shareholders about AGMs and EGMs.”

Section 101 of the Companies Act 2013 deals with the notice of general meetings to be given by the company to its shareholders. A general meeting may be an Annual General Meeting (AGM) or an Extraordinary General Meeting (EGM).

The section lays down the following provisions with regard to the notice of the meeting:

1. The notice shall be in writing: The notice of the meeting shall be given to every member of the company in writing, either in hard copy or in electronic mode, as per the member’s preference.

2. Time period for giving notice: As provided in sub-section (1) of section 101, a general meeting may be called by giving not less than 21 clear days’ notice in writing or through electronic mode in such manner as may be prescribed.

As provided in para 1.2.6 of secretarial standard-2, for the purpose of reckoning 21 days clear notice, the day of sending the notice and the day of Meeting shall not be counted. Further in case the company sends the notice by post or courier, an additional two days shall be provided for the service of notice. In respect of companies registered under section 8 of the Act, the length of notice was shortened to 14 days vide the notification no. G.S.R. 466 (E) dated 05.06.2015.

3. Contents of the notice: The notice of the meeting shall specify the place, date, day, and time of the meeting, and the business to be transacted at the meeting. In the case of a special resolution, the notice shall also contain the text of the resolution.

4. Shorter notice: In case of an EGM, the company may give shorter notice, with the approval of at least majority in number and ninety-five percent of such part of the paid-up share capital of the company as gives a right to vote at the meeting.

5. Service of notice: The notice of the meeting may be served by hand delivery, by post or by electronic means to the registered email address of the member.

Sub-section (4) of section 101 provides that an accidental omission to give notice to, or the non-receipt of notice by, any member or other person to whom it should be given, shall not invalidate the proceedings of the meeting.

It was held in Maharaja Exports v. Apparels Exports Promotions Council [(1986) 60, Comp. Case 353 (Delhi)] That “The ‘accidental omission’ means that the omission must be not only not designed but also not deliberate. This expression implies absence of intention or deliberate design. The word ‘or’ appearing in this sub-clause is of great significance. The company has only to prove on record that they have sent the notice to its members on the addresses furnished by them. The non-receipt of the notice under no circumstances shall invalidate the holding of the meeting or the proceedings thereof.”

It is important to understand the legal implications of this section when calling a general meeting. This section has been cited in several cases, such as the case of K.V.R.K. Raju v. K.V.R.K. Raju & Ors. ^[1], where the court held that the notice of the meeting must be given in accordance with Section 101 of the Companies Act 2013. In this case, the court also held that the notice must be in writing and must be served to all the members of the company.

In addition to the legal implications of this section, it is also important to understand the practical implications of this section. For example, when calling a general meeting, it is important to ensure that the notice is given in accordance with the requirements of Section 101 of the Companies Act 2013. This includes ensuring that the notice is given in writing and is served to all the members of the company.

It is important for companies to ensure that the notice of the meeting is given in compliance with the provisions of the Companies Act 2013. Any non-compliance with the notice requirements may render the proceedings of the meeting invalid. Therefore, it is crucial for the company to give adequate notice to its members and comply with the other requirements specified in the section.

This section applies to a private company unless its articles provide otherwise. This exemption was given by the notification no. G.S.R. 464 (E) dated 05.06.2015. Hence, the articles of the private company may exclude the applicability of this section and make its own regulations as regards the notice of a meeting.

Sources:

1. https://indiankanoon.org/doc/145079/