Quorum For General Meeting Under Companies Act 2013

     

Quorum For General Meeting Under Companies Act 2013

Section 103 of the Companies Act, 2013 provides that:—

(a)  in case of a public company,—

(i) 5 members personally present if the number of members as on the date of meeting is not more than 1,000;

(ii) 15 members personally present if the number of members as on the date of meeting is more than 1,000 but up to 5,000;

(iii)30 members personally present if the number of members as on the date of the meeting exceeds 5,000;

will be the quorum

(b) in the case of a private company, 2 members personally present, shall be the quorum for a meeting of the company.

Articles of Association of a company may provide for larger number of members personally present as quorum, rather than members stated in section 103 who shall be personally present in case of public and private company respectively but it cannot be less than the minimum number of quorum required for the meeting.

It should be noted that only the members personally present will be counted for the purpose of quorum. As a general rule, proxies will not be counted for the purpose of quorum. An exception is provided in section 113.

Corporate Representatives : Section 113 provides that a corporate member of a company may by a resolution of its Board of directors authorize a person to attend a general meeting of the company in which it is a member. Such representative shall be deemed to be a member personally present and where necessary he can appoint a proxy to attend the meeting.

Presence in two capacities : if a person is present in two capacities i.e., one as a member and one as a representative of the company member, he shall be counted as two members present in person for the purpose of counting the quorum.

Presence of Preference Shares : The holders of preference shares cannot be counted for quoru, unless they have the right to participate in the meetings due to their dividend not having been paid for the period stated in section 47 of the Act.

Circumstances under which one person will be treated as quorum

In certain circumstances the law recognises that one person will constitute the quorum. For example,

1.   if all the shares of a particular class are held by one member then his presence will constitute the quorum for a meeting of the members of that class.

2.   When a meeting is convened by the Tribunal under section 97 or 98, they may direct that one member present in person or by proxy shall constitute a quorum.

3. The single individual representing five member companies is to be treated as five members personally present for the purpose of quorum. Even if no other shareholder is present, his presence is to be taken to satisfy the requirements of quorum for a valid meeting of the company though this case is not covered by the exceptions provided in sections 97 and 98 of the Companies Act, 2013.

But in other cases, one member present in person shall never be the quorum even if he gets proxies from all the members holding shares of that class.

Quorum For Adjourned Meeting :

According to Sub – section (2) of Section 103 of the Companies Act, 2013, if the quorum is not present within half-an-hour from the time appointed for holding the general 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 of Companies Act, 2013, shall stand cancelled.

If at the adjourned meeting also, a quorum is not present within half-an-hour from the time appointed for holding meeting, the Members present, being not less than two in number, will constitute the Quorum.

Related Post :

Quorum For Board Meeting Under Companies Act 2013

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