INDIA Law and Practice Contributed by: C R Dua, Sanjeev Kaul, Abhinav Rastogi and Ashish Malkotia, Dua Associates
EGM. Please see 2.3 Procedure and Criteria for Call- ing a General Meeting . 2.2 Notice of Shareholders’ Meetings An AGM or EGM can be called by providing at least 21 clear days’ notice, either in writing or electronically. An AGM is called by giving not less than 21 clear days’ notice, either in writing or through electronic means. An AGM or EGM may also be convened at shorter notice with the consent (in writing or electronically) of: • not less than 95% of the members entitled to vote thereat, in the case of an AGM; and • the majority of members representing at least 95% of the paid-up share capital eligible to vote at the meeting, in the case of an EGM. 2.3 Procedure and Criteria for Calling a General Meeting Shareholders cannot independently call and hold an AGM; it is the responsibility of the board to convene the AGM each year within a specified timeframe. An EGM can be called by the board whenever deemed necessary or upon the written request of sharehold- ers who collectively hold at least 10% of the paid-up share capital with voting rights. This request must be submitted at least 21 days before the proposed date of the EGM. The notice should state the matters to be discussed at the meeting and should be signed by those making the request. The board is required to convene the EGM within the specified timeframe. If the board fails to do so, the shareholders who made the request have the right to call and hold the EGM themselves within three months from the date of req - uisition. Additionally, under certain circumstances, the tribunal may also convene an EGM or AGM. 2.4 Information and Documents Relating to the Meeting All shareholders of a company are entitled to receive notice of general meetings, and have the following basic information and inspection rights: • to receive the audited annual financial statements along with the auditor’s report and the directors’ report thereon;
shareholders, the provisions of the agreement shall be incorporated in the articles. Articles constitute a contract between each member and the company, and between the members inter se. Furthermore, the provisions of the Act have effect notwithstand- ing anything to the contrary contained in any such agreement, and any provision contained in such an agreement shall, to the extent to which it is repugnant to the provisions of the Act, become or be void, as the case may be. In respect of public companies (where shares are freely transferrable), even the Act now recognises that any contract or arrangement between two or more persons in respect of the transfer of securities shall be enforceable as a contract. 2. Shareholders’ Meetings and Resolutions 2.1 Types of Meeting, Notice and Calling a Meeting A number of matters prescribed under the Act are required to be transacted only at a general meet- ing of the shareholders. All general meetings except the annual general meeting (AGM) are referred to as extraordinary general meetings (EGMs). AGM Every company is required to hold an AGM each year. In addition to other matters that are reserved for mem- bers under the law or the company’s articles, the AGM must handle ordinary business matters. These ordi- nary business matters include: • reviewing the financial statements and reports from the directors and auditors; • declaring any dividends; • appointing directors to replace those who are retir- ing; and • deciding on the appointment and remuneration of the auditors. EGM All matters other than the ordinary business matters to be transacted at an AGM can be transacted at an
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