NOTICES OF
MEETINGS OF THE MEMBERS
Every company, limited by shares, and every company, limited by guarantee and having a share capital, shall within a period of not less than one month nor more than six months from the date at which the company is entitled to commence business, hold a General Meeting of, the members of the company which shall be called 'the statutory meeting'. The Board of Directors shall, at least twenty-one days before the day on which the meeting is held, forward a report called 'the statutory report' to every member of the company. But, if the statutory report is forwarded later than this time, it shall be deemed to have been duly forwarded if it is agreed to by all the members entitled to attend and vote at the meeting. A statutory report is to be prepared in Form No. 22 of the Companies (Central Government's) General Rules & Forms, 1956.
Statutory meeting is a
provision for the first meeting of the members and the management at the early
stage of a company's operation. In a sense, this is the first General Meeting
of a public limited company to be held within six months from the date at which
the company is entitled to commence business for limited purposes.
Provisions of section 165
have no applicability to a private company which has become a public company by
operation of law under section 43A. But the provisions of this section apply to
public companies registered under Part IX of the Act. Section 165 does not
apply to a Government company by reason of an exemption Notification GSR 378(E)
dated 16-7-1985.
The members of the company
present at the meeting shall be at liberty to discuss any matter relating to
the formation of the company or arising out of the statutory report, whether
previous notice has been given or not; but no resolution may be passed of which
notice has not been given in accordance with the provisions of this Act.
Default in not holding the statutory meeting as per section 165 is punishable
with a fine of up to Rs. 5,000/- and this fine will be imposed on every
director or other officer of the company who is in default.
RUSHABH MANAGEMENT &
INFOSYS
Anand
388001
Date
the _____2003
Notice is hereby given that
in pursuance of section 165 of the Companies Act, 1956, the 'Statutory Meeting'
of the Company will be held on ____the ___2003,____at_____a.m./p.m. at the
registered office of the Company at Anand 388001 to consider and adopt the
'Statutory Report' made up to the ____2003____which is enclosed, and to
consider all other businesses which are incidental and consequential thereto.
A member entitled to attend
and vote at the meeting is entitled to appoint a proxy to attend and vote
instead of himself and a proxy need not be a member of the company.
BY ORDER OF THE BOARD
For RUSHABH MANAGEMENT &
INFOSYS
(XYZ)
Secretary.
Annual
General Meeting (S. 166)
Every company shall in each
year hold in addition to any other meetings a General Meeting, as its Annual
General Meeting and shall specify the meeting as such in the notice calling it.
The notice of every Annual General Meeting shall state the time of the meeting,
which should be during the business hours, the date of the meeting, which
should not be a public holiday, and shall be held either at the registered
office of the company or at some other place within the same city, town or
village in which the registered office of the company is situated.
Notice Annual General
Meeting
RUSHABH MANAGEMENT &
INFOSYS
Anand
388001
Dated
the ___2003
NOTICE
Notice is hereby given that
the Annual General Meeting of the Company will be held at the registered office
of the Company at Anand 388001 on____the_____2003____, at____ a.m./ p.m. for
transacting the following business
1. To consider and adopt the
audited profit and loss account of the company for the period from the ____2001
____to ____,2003 ____and the
balance-sheet as at the ____2003____together with the Directors'Report thereon.
2. To declare dividends.
3. To appoint a Director in
place of Mr. XYZ retiring by rotation and being eligible for re-appointment.
4. To appoint Auditors and
fix their remuneration
BY ORDER OF THE BOARD
For RUSHABH MANAGEMENT &
INFOSYS
(XYZ) Secretary
NOTES (to be added to the notice as footnote)
(1) A member entitled to
attend and vote at the meeting is entitled to appoint a proxy to attend and
vote in his stead. A proxy need not be a member of the company. A blank form of
proxy is enclosed and if intended to be used, it should be returned to the
company not less than forty-eight hours before the Annual General Meeting duly
completed.
(2) The dividends, if declared, will be paid on or
after the ___2003_____to the members so entitled, whose names appear in the
register of members of company as on the 2003
(3) The register of members
and the share transfer book will remain closed from the____to____2003 (both
days inclusive) in terms of the provisions of section 154 of the Companies Act,
1956.
(4) Particulars of unpaid, dividend, if any is given
in the annexed statement.
Comments
on the notes to be added to the notice
NOTE (1): Section 176 of the
Companies Act made it a statutory provision to include in every notice calling
a meeting of a company which has a share capital, a statement with reasonable
prominence that a member entitled to attend and vote is.entitled to appoint a
proxy, or where allowed, one or more proxies, to attend and vote instead of the
concerned member, and that such proxy need not be a member of the company. If
default is made in compliance with this provision with respect to the notice of
any meeting, every officer of the company who is in default shall be punishable
with fine which may extend to five thousand rupees.
NOTE (2) : The note of this
nature is usually added to give a definite indication as to when the
shareholders may expect to receive the dividend warrant. There exists no
statutory provision to add a note in regard to payment of dividend and
circulate it along with the notice of and Annual General Meeting but it is
usually done as a good secretarial practice.
Pursuant to section 207 of
the Act, a time limit of thirty" days has been prescribed from the date of
declaration of dividend by t he members at an Annual General Meeting either to
pay the amount of dividend or to post the warrant in respect thereof to all the
shareholders entitled to the payment of dividend. If default is made then every
director of the company shall, if he is knowingly a party to the default, be
punishable with simple imprisonment for a term which may extend to three
years" and shall also be liable to fine of Rs. 1,000/- for every day
during which such default continues and the company shall be liable to pay
simple interest at the rate of 18% per annum during the period for which such
default continues.
NOTE (3) : The note should
be framed depending on the subsisting provisions of the Income-tax Act, 196 1,
and rules made there under.
NOTE (4) : Giving a notice
of the book closing dates (register of members, register of share transfer) is
a statutory requirement. It has become customary to notify the closing date of
the register of members as a note to the notice of the meeting, apart from
notifying through press such closing dates pursuant to section 154 of the
Companies Act, 1956.
Intimation of Holding of
Annual General
Meeting
The Secretary,
No____ Dated
____
Dear Sir,
Sub: Intimation regarding
holding of Annual General Meeting
Kindly refer to our letter No ____ dated_____
intimating that our Annual General Meeting will be held on the We regret that due to an
oversight, we mentioned ______instead of ______Which has been fixed as the date
for holding Annual General Meeting. The time and place of the meeting remains
unchanged.
Inconvenience is regretted.
Yours faithfully,
for XYZ Limited Secretary
Intimation of Holding of
Annual General Meeting
(Another Format)
The Secretary,
No____ Dated_____
Dear Sir
Sub: Intimation regarding holding of Annual General
Meeting
In
continuation of our letter No ____dated____ we write this to inform you that we
shall be holding our Annual General Meeting on ____the____ at ____A.M. at the
Registered Office at
It may be added that we do not propose to close the
transfer books.
Assuring you of our best attention always.
Yours Faithfully,
For XYZ Limited,
Secretary
Length
of notice for calling a General Meeting (S, 171/53)
A notice is invalid if not
given in time as prescribed under section 171 of the Act. A General Meeting of
a company, either public or private, may be called by giving not less than
twenty-one days' notice in writing. Not less than twenty-one days has been
interpreted by Courts of law as clear twenty-one days, that is, excluding both
the dates on which the notice is served and the date of the meeting, (Nagappa
Chettiar v. Madras Race Club, ILR (1949) Mad 808 : (1949) 1 Mad L J 662) and
each of the twenty-one days must be a calendar day. Articles of a company may
provide for a longer period but cannot provide for a shorter period for giving
notice. A private company, unless a subsidiary of a public company, may have
its own regulations regarding the length of notice.
Simultaneously, attention should also be given to the provisions of section 53 of the Act in regard to service of document on members by a company. Where a document is sent by post, service thereof shall be deemed to be effective by properly addressing, prepaying, posting the notice of a meeting and at the expiration of forty- eight hours after the letter containing the same is posted. As there is a statutory made of delivering a document by post and a provision deeming such delivery, the place where such posting is done in the place of performance of the statutory duty and the duty stands discharged as soon as the document is posted. H.V Jayaram v. ICICI, (2000) 99 Com Cases 241 (SC). Thus, the notice of a General Meeting, if issued through the medium of post office, which in almost all cases so done, should be given with clear twenty-three days, pursuant to the provisions of section 171 read with section 53 of the Companies Act, 1956.
Shareholders, consent for
shorter notice
THE COMPANIES ACT, 1956
FORM NO. 22A
Consent by shareholders for
shorter notice
[Pursuant to section 17](2)]
To
The Board of Directors
Of _______
I
_______Son of _____resident of_____ holding equity/preference shares ____of
Rs____ in the company in my own name hereby give consent, pursuant to section
171(2) of the Companies Act, 1956, to hold the Annual/Extraordinary General
Meeting on ____at a shorter notice.
Signature ____________
Name ______________
(In Block Capitals)
Dated the____ day of____2003
Notice
of meeting through press advertisement
It is customary for a
company to advertise in a newspaper the notice of a meeting either in a concise
form or giving the full text of the notice. Such advertisement serves legal
requirement to the extent that no member can put a plea of non-receipt of any
notice of a meeting. Such publication of notice amounts to giving a public
notice.
A General Meeting may be
convened at a shorter notice than provided above in the event of the members
agreeing to waive their right to receive such notice, under section 171(2).
As per paragraph 1.2.6 of Secretarial Standard-2 in the case of listed companies with more than 5000 members an abridged version of the Notice, listing the items of business and the day, date, time and venue of the general meeting should be published in a newspaper having a wide circulation within such States of India where more than 1000 members reside.
Notice of Annual General
Meeting though press advertisement
RUSHABH MANAGEMENT &
INFOSYS
Registered Office:
Anand
388001
Dated
the ____2003
Notice is hereby given the
Ninth Annual General Meeting will be held on Friday, the 27th September, 2003
at 10.00 A.M. at the Registered Office of the Company. Pursuant to Section 154
of the Companies Act, 1956, the Register of Members and Share Transfer Books of
the Company will remain closed from 24th September 2003 to 27th of September
2003 (both days inclusive).
By Order of the Board
(XYZ)
Secretary
Place : Anand 388001
Date: _____2003
Notice of Annual General
Meeting though press advertisement
(Another Format)
RUSHABH MANAGEMENT &
INFOSYS
Registered Office:
Anand 388001
Dated the____2003
Notice is hereby given the
Seventh Annual General Meeting of Wadhwa and Company Limited will be held on
Saturday, 28th day of September, 2003 at 3.00 p.m. at the Registered Office of
the Company to transact the business as per notices being mailed to the members
separately.
Pursuant to Section 154 of
the Companies Act, 1956, please be informed that the Register of Members and
the Share Transfer Books will be closed on 28-92003.
By Order of the Board (XYZ)
Secretary Place: Anand
Date: 31st July, 2003
Public Notice of Annual
General Meeting
(Another Format)
RUSHABH MANAGEMENT &
INFOSYS
Registered Office:
Anand 388001
Dated the _____2003
NOTICE
Notice is hereby given that
the Third Annual General Meeting of RUSHABH MANAGEMENT & INFOSYS. will be
held at the Registered Office of the company on Monday the 30th September, 2003
at 10.30 hrs. to transact the ordinary business mentioned in the Notice
convening the said Annual General Meeting that is being posted to the members
individually, at their registered addresses.
A member entitled to attend
and vote is entitled to appoint a proxy to attend and vote instead of himself
and a proxy need not be a member. Notice is also hereby given pursuant to
Section 154 of the Companies Act 1956 that the Register of Members and the
Share Transfer Books of the Company will remain closed from 24th September,
2003 to 30th September, 2003 (both days inclusive).
By
Order of the Board Sd/-
Date: 4th September, 2003
Public Notice of Annual
General Meeting
(Another Format)
RUSHABH MANAGEMENT &
INFOSYS
Registered Office:
Dated the____2003
NOTICE
Notice is hereby given that
the Twentieth Annual General Meeting of the Company is scheduled to be held at
the registered office of the Company on Monday the 30th September 2003 at 10.
15 a.m. to transact the Ordinary and Special Business mentioned in the Notice
convening the Annual General Meeting which, together with the Explanatory
Statement under Section 173(2) of the Companies Act, 1956, has been posted to
the Members of the Company to their registered addresses.
Notice under Section 154 of
the Companies Act, 1956 is also hereby given that the Register of Members and the
Share Transfer Books of the Company will remain closed from 25th September 2003
to 30th September 2003 (both days inclusive).
By Order of the Board S.R.
Secretary
Date: 4th September, 2003
Note : A member entitled to attend and vote is
entitled to appoint a proxy to attend and vote in his stead and the proxy need
not be a member. The Proxy form duly stamped and executed should be lodged with
the Company not less than 48 hours before the meeting.
Public Notice Change of
Venue of Meeting
XYZ Limited
Registered Office:
CHANGE OF VENUE OF MEETING
The_____ Annual General Meeting which was scheduled
to be held on____ at_____ at the Registered Office Now it will be held at
____at the same date and same time.
For
XYZ Limited
Date: Company
Secretary
Public Notice of Annual
General Meeting to consider delisting
RUSHABH MANAGEMENT &
INFOSYS
Registered Office:
Anand
388001
Dated
the ____2003,_____
NOTICE
Notice is hereby given that
the 31st Annual General Meeting of members of the Company will be held on
Friday, the 27th September, 2003 at 4.00 p.m. at the registered office of the
company to transacted the business specified in the Notice, inter-alia to
consider passing a Special Resolution for Voluntary Delisting of Company's
Equity Shares (old) from The Stock Exchange, Mumbai and Bangalore Stock
Exchange Limited. The said Notice has been posted to all the members to their
registered addresses with the Company. The reasons that have prompted the Board
to recommend delisting of shares are:
1. Company has to refund
large amount of deposits and downsize itself, and for that purpose cut down and
reduce all possible expenses which are disproportionate to the benefits
accruing to the Company and its shareholders.
2. There has been no trading
for long periods in The Stock Exchange, Mumbai and Bangalore Stock Exchange.
Mumbai and Bangalore Stock Exchange reported last trading on 22nd April 1999
and 24th May, 2000.
3. Company's shares will
continue to be listed on National Stock Exchange of India, which is an all
India Stock Exchange and on Mangalore Stock Exchange, which is the Regional
Stock Exchange. With the extension of the National Stock Exchange terminals in
all the cities, investors have access to online dealings in the Company's
securities from all over the country. Therefore, delisting of equity shares
from the Stock Exchange, Mumbai and Bangalore Stock Exchange Ltd. will not in
any way adversely affect the investors as the shares can be traded through
National Stock Exchange terminals.
By Order of the Board (XYZ)
Secretary
Date: 28-8-2003
Notice
in regard to ordinary and special business (S. 173)
Provisions of section 173 of
the Act mould the contents of a notice according to the nature of business to
be transacted in a General Meeting, which are of two types, namely, ordinary
and special business.
In the case of an Annual
General Meeting, all businesses to be transacted at the meeting shall be deemed
special, with the exception of business relating to
(i) the consideration of the
accounts, balance-sheet and the reports of the Board of Directors and Auditors;
(ii) the declaration of a
dividend;
(iii) the appointment of Directors in place of those
retiring; and
(iv) the appointment of and the fixing of the
remuneration of the Auditors.
Any other business proposed
to be transacted in an Annual General Meeting is to be termed as a special
business and there shall be annexed to the notice of the meeting a statement
setting out all material facts concerning each such item of business,
including, in particular, the nature of the concern or interest, if any,
therein of every Director and the Manager, if relevant. If any document is
connected with the resolution, the place where it can be inspected must also be
mentioned in this statement. This statement is known as the Explanatory
Statement.
The norm that is followed is
that any resolution which, pursuant to any section of the Companies Act is
required to be passed as a Special Resolution, or as an ordinary resolution,
must be notified as a special business with necessary Explanatory Statement,
pursuant to section 173(2) of the Act, if it does not belong to the four items
mentioned hereinabove. Thus, a special business may have to be passed by an
ordinary resolution or by Special Resolution if such a specific provision exists
in the Companies Act, 1956. When a resolution is passed without disclosing
material facts in the Explanatory Statement the in violation of the requirement
of section 173, it is a void resolution and an agreement on the strength of a
void resolution if permitted would defeat the provisions of law. YS. Spinners
Ltd. v. Official Liquidator, Hubica Mills Ltd., (2000) 100 Com Cases 547 (Guj).
Special business-Explanatory Statement
Any business notified to be
transacted, with the exception of the items covered by section 173(l)(a) of the
Act, in any Annual General Meeting or in any business notified to be transacted
in an Extraordinary General Meeting must be accompanied by an Explanatory
Statement, as discussed hereinbefore.
It is the usual practice of the company to include such notice in the body of the 'notice' of the Annual General Meeting under special business item(s) annexing therewith necessary Explanatory Statement, as required under section 173(2) of the Companies Act, 1956.
To appoint Mr.______ a Director of the company, who vacates his seat at this Annual General Meeting and if thought fit, to pass the following ordinary resolution of which the prescribed notice has been received by the company, the candidate having filed with the company his consent to act as a Director, if appointed:
"RESOLVED that Mr. ______be and is hereby appointed a Director of the company, whose period of office shall be liable to determination by retirement of directors by rotation."
Explanatory Statement under Section 173(2) of the
Companies Act, 1956
Mr. _______was appointed as additional Director of the company with effect from the____2003___and vacates his seat at this Annual General Meeting, pursuant to section 260 of the Companies Act, 1956 and Articles of Association of the company. A notice under section 257 of the said Act has been received from a member signifying his intention to propose the name of Mr. VKW for appointment as a Director of the company. Mr. VKW has filed with the company his consent to act as a Director.
The Directors recommend his
appointment as a member of the Board in the interest of the company.
Earlier, we have discussed
the implication of a 'special notice' for the removal of a. Director and also
the importance of a notice under section 257 of the Companies Act, 1956,
proposing to pass a resolution for the appointment of a Director retiring,
being an additional Director, by virtue of section 260 of the said Act.
Similarly, if a Director was appointed to fill up a casual vacancy and has to
be retired, the only way for his reappointment is to get a notice served on the
company under section 257 and propose his appointment under special business as
shown in Form above. A notice under section 257(l) is of a recommendatory
nature.
Not only Directors appointed
by the Board under section 260 or 262 as additional Director or Directors to
fill the casual vacancy, an alternate Director, if to be re-appointed or a
nominee Director appointed either by a block of shareholders or by any
financial institution or other body or by the Central Government under section
408, it seeks to be re-appointed on the Board at a General Meeting, it must be
done under a notice being served on the company as per section 257 of the
Companies Act, 1956. The implication is that none of these Directors is a
Director retiring by rotation and enjoys an inherent right to be re-appointed
pursuant to the provisions of the Companies Act. The preceding form dealt with
a notice under section 257 in connection with the appointment of a Director
vacating the office under section 260 of the Act. In the next form a notice of
appointment of a Director at an Annual General Meeting who is 'Vacating his
seat under section 262 of the Act has been given.
Form of special business (as
ordinary resolution to be included in the notice of Annual General Meeting)
To appoint a Director in place of Mr. ____who was appointed as a Director under article of the Articles of Association of the company read with section 262 of the Companies Act, 1956, in the casual vacancy arising from the resignation of Mr. ____and who holds office of a Director up to the date of this Annual General Meeting, and to consider and if thought fit to pass the following resolution of which the prescribed notice has been received by the company in terms of section 257 of the Companies Act, 1956, the candidate having filed his consent to act as a Director, if appointed:
"RESOLVED that Mr. _____be and is hereby
appointed as a Director of the company whose period of office shall be liable
to determination by the retirement of Directors by rotation."
Explanatory Statement
Mr. ____who was appointed a Director of the company on the___2000 ____,to fill in the casual vacancy caused by the resignation of Mr. ____ in terms of the Companies Act and the Articles of Association of the company, vacates office at this Annual General Meeting as Mr. _____in whose place he was appointed, would have retired by rotation at this meeting had he continued to be a Director of the company. A notice has been received by the company from a member under section 257 of the Companies Act, 1956, proposing the appointment of Mr. ____as a Director of the company at this meeting. Mr. _____offers himself for appointment as a Director at this meeting having filed his consent with the company to act as Director. Mr.______ is an eminent Advocate and has ' wide knowledge and experience of corporate management. Your Directors, therefore, feel that it will be in the interest of the company to re-appoint him as a Director of the company and accordingly recommend his re-appointment. None of the Directors of the company is interested in the resolution except Mr. ____who is proposed for re-appointment, as Director.
Right
of persons other than retiring Directors to stand for Directorship (S. 257)
Section 257 permits a person
(other than a Director retiring by rotation) to stand for directorship at any
General Meeting which may be held in future.
A person (other than a
Director retiring by rotation) is eligible, even though he is not a member of
the company, to serve a notice under section 257 of the Companies Act, 1956,
intending to propose him as a candidate for the office of a Director of a
company. Length of such notice should be at least fourteen days before the date
of the proposed General Meeting and the notice at the earliest can be given
only after the General Meeting is called by the direction. S. Pazhamalai v.
Arun Sugar Ltd., (1984) 55 Comp, Cases 500 (Mad). The notice so given should be
accompanied by a deposit of Rs. 500.00.
Notice Contesting election
as a Director
Dated the____2003_____
To M/s. RUSHABH MANAGEMENT & INFOSYS,
Anand 388001
Dear Sirs,
I, XYZ, at present residing at Calcutta, being an
industrialist of repute, hereby give notice of my intention to propose at the
ensuing Annual General Meeting of the company my name as a Director of your
company, and to move the following resolution (as an ordinary resolution):
"RESOLVED that Mr. XYZ
of Calcutta, be and is hereby appointed as a Director of the company whose
period of office shall be liable to determination by the retirement of
Directors by rotation."
Yours faithfully,
(XYZ)
In the usual course, the
company is to give notice to its members of the intention of Mr. XYZ to move a
resolution proposing him to be appointed a Director in the Annual General
Meeting. If the notice of Mr. XYZ is received earlier, this can be accommodated
in the notice of the Annual General Meeting under special business with or
without comment or recommendation of the Directors and if it is received later,
then the company should give notice of this resolution to the members by
advertisement in a newspaper, like this
Circulation of notice for
contesting election as a Director
RUSHABH MANAGEMENT &
INFOSYS
Anand
388001
Date
the ___2003____
NOTICE
Notice is hereby given that
in terms of section 257(IA) of the Companies Act, 1956, the Company has
received a notice from Mr. XYZ of 1, Scot Lane, Calcutta 700001, proposing
himself to be appointed as a Director at the ensuing Annual General Meeting to
be held at the registered office of the company at on____the____2003___at____a.m.
A member entitled to attend
and vote at the meeting is entitled to appoint a proxy to attend and to vote
instead of himself and the proxy need not be a member.
By Order of the Board
(C D E)
Secretary.
No Explanatory Statement of this notice is necessary as the notice which is in compliance with the provisions of section 257(1A) is only a communication of intention of a person desiring to be appointed to the office of a Director of the company.
In earlier paragraphs,
discussion was held in regard to requirement of notice under section 257(l) of
the Companies Act, 1956, to appoint a Director at an General Meeting who was
earlier appointed by the Board of Directors, pursuant to either section 260 or
262 of the Act. It is admitted that a Director retiring by rotation has a
distinctive eligibility to be re-appointed at an Annual General Meeting, in
preference to any candidate for directorship. Opportunity is afforded to any
person who is not a retiring Director by rotation to be eligible within the
frame of section 257 of the Act, to give notice to the company for appointment
to the office of Director at any General Meeting in place of a Director
retiring by rotation or otherwise. It so happens that the management of the
company has to resort to ask the members present at an Annual General Meeting to
choose, mostly by ballot, one/ two candidate(s) out of few contesting for the
same vacancies.
The effectiveness of notices
under either section 257 or 284 of the Companies Act, 1956, is negative in the
case of Director(s) appointed under section 408 of the Act. Notwithstanding
anything contained in the Act, under section 408, the Central Government
reserves power to appoint any number of Directors as the Central Government
may, by order in writing, specify as being necessary to effectively safeguard
the interest of the company, or its shareholders or in public interest to hold
office as Directors of the company for any period not exceeding three years on
any one occasion. Pursuant to subsection (3) of section 408, the Directors
appointed by the Central Government do not come for the purpose of reckoning
two- thirds or any other proportion of the total number of Directors of the
company liable to retire by rotation. Thus, one-third of the total number of
Directors liable to retire by rotation out of two-thirds of them (if not
otherwise laid down in the articles of the company) shall be reckoned without
the persons appointed as Directors (if any) by Central Government by virtue of
section 409.
The purpose of notices under
section 257(l) is for affording right of persons, other than a retiring
Director, to stand for directorship. If the notice is served by the candidate
for the directorship himself, he need not be a member of the company. On the
other hand, if a notice of appointment of a Director in a General Meeting is
given by any person other than the candidate himself, such notice should be
given by some member who should have, quite evidently, voting right at a
General Meeting. Thus, although the provision for giving notice has been made
by some member(s), it is thought proper that such member(s) should have voting
rights to be exercised at the Annual General Meeting. In other words a
preference shareholder, although a member of the company, cannot give a notice
to appoint his candidate as a Director in any Annual General Meeting.
Provisions of 'special
notice' under section 284 of the Act is general and apply in the case of
removal of all Directors of any category either whole-time or managing or a
nominee Director or a Director not retiring by rotation, except that two types
of Directors, such as : (a) Directors appointed by the Central Government under
section 408; and (b) the Directors of a company appointed in accordance with
the principle of proportional representation whether by the single transferable
vote or otherwise, will be outside the realm of section 284 read with section
190 of the Companies Act, 1956.
Extraordinary General
Meeting
RUSHABH MANAGEMENT &
INFOSYS
Anand
388001
Dated
the ___2003
NOTICE
Notice is hereby given that an Extraordinary General Meeting of the members of the Company will be held at the registered office of the Company on____the____2003___at____a.m./p.m. to consider and, if thought fit, with or without modification to pass the following resolution proposed as a Special Resolution:
"RESOLVED that ____________
__________________________
BY ORDER OF THE BOARD
(XYZ)
Secretary.
NOTES: (1)The Explanatory
Statement, pursuant to section 173(2) of the Companies Act, 1956, with regard
to the Special Resolution mentioned above is enclosed.
(2)A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of himself and the proxy need not be a member. A blank form of proxy is enclosed which, if used, should be returned to the company duly completed not later than forty-eight hours before the commencement of the meeting.
Adjourned Extraordinary
General Meeting
RUSHABH MANAGEMENT &
INFOSYS
Anand 388001
Dated the___2003
NOTICE
Notice is hereby given that
the Extraordinary General Meeting of the members of the Company, earlier
notified to be held on ___the____, 2003____ at ____a.m./p.m. and was adjourned
without transaction of any business thereof will be held on ___the
____2003,____ at___ a.m./p.m. at the registered office of the Company to
transact the business as was set forth in the notice dated the ___2003___convening
the Extraordinary General Meeting on the___2003___
BY ORDER OF THE BOARD
(XYZ)
Secretary.
NOTE: A member entitled to attend and vote at the meeting may appoint a
proxy to attend and vote in his stead. A proxy need not be a member of the
company. A blank form of proxy is enclosed which, if used, should be returned
to the company duly completed not later than forty- eight hours before the
commencement of the meeting.
Calling
of Extraordinary General Meeting on requisition (S. 169)
The Board of Directors of a
company shall immediately proceed to convene an Extraordinary General Meeting
of the company when requisitioned there for by such members of the company
holding in the aggregate not less than one-tenth of the paid- up capital of the
company carrying the right of voting in regard to that matters as on the date
of the requisition in the case of a company having a share capital and by such
number of members as have at the date of deposit of the requisition not less '
than one tenth of the total voting power of all the members having at the said
date a right to vote in regard to that matter in case of company not having a
share capital.
The requisition shall set
out the matters for the consideration of which the meeting is to be called and
that such requisition, duly signed by the requisitionists, shall be deposited
at the registered office of the company.
On receipt of a valid
requisition, the Board of Directors has to proceed duly to call a meeting of
the members within twenty-one days from the date of the deposit of such
requisition for the consideration of those matters on a day not later than
forty-five days from the date of the deposit of such requisition. On the expiry
of the period of forty-five days, an Extraordinary General Meeting may be called
(i)by the requisitionists
themselves;
(ii)by such of the
requisitionist: (a) in the case of a company having a share capital as
represent either a majority in value of the paid-up share capital held by all
of them or hold not less than one-tenth of paid-up share capital of the
company, whichever is less: (b) in the case of a company not having a share
capital, as represent not less than one'-tenth of the total voting power of all
the members of the company.
Calling of an Extraordinary
General Meeting on requisition
RUSHABH MANAGEMENT &
INFOSYS
Anand
388001
Dated
the ___2003
NOTICE
Notice is hereby given that
an Extraordinary General Meeting of the members of the Company will be held at
the registered office of the
Company on____the___2003____at a.m./p.m. to consider the following matters
in regard to which the company has received a valid requisition from the
members thereof under section 169 of the Companies Act, 1956, and, if thought
fit, to pass the following resolution as a Special Resolution:
"RESOLVED that the
Articles of Association of the company be amended in the manner so as to delete
existing article XY and be replaced by a new article XY as hereunder:
"XY. The Board may, if
it thinks fit, receive from any member willing to advance the same, all or any
part of the money due upon the share held by him beyond the sums actually
called for, and upon the money so paid or satisfied in advance, or so much
thereof as from time to time exceeds the amount of the calls then made upon the
shares in respect of which such advance has been made, the company may pay
interest at such rate not exceeding eleven per cent per annum as the member
paying such sum in advance and the Board agrees upon. Money so paid in excess
of the amount of calls shall not rank for dividends. The Board may at any time
repay the amount so advanced upon giving to such member not less than three
months' notice in writing."
BY ORDER OF THE BOARD
(XYZ)
Secretary
NOTES: (a) The requisition signed by the requisite number of members as per section 169 of the Companies Act, 1956, dated the ___2001___has been kept at the registered office of the company for inspection by any member of the company on any working day during the business hours of the company.
(b)A statement of material
facts in elaboration of the matter as set out has been reproduced along with
the matter for which requisition has been made.
(c)A member entitled to attend
and vote at the meeting is entitled to appoint a proxy to attend and vote
instead of himself and the proxy need not be a member. A form of proxy is
enclosed and, if intended to be used, should be returned to the company duly
completed not less than forty-eight hours before the aforesaid meeting.
Adjourned Annual General
Meeting
RUSHABH MANAGEMENT &
INFOSYS
Dated
the _____2003.____
NOTICE
Notice is hereby given that
the adjourned Annual General Meeting of the members of the Company will be held
at the registered office of the Company on ____the____2003___at ____a.m./p.m.
to consider and transact the following business:
1. To consider
and adopt the profits and loss account of the company for the year ended 2003 the
balance-sheet as at that date and the Directors' and Auditors' reports thereon.
2. To declare dividends
recommended by the Board of Directors of the company.
3. To approve the
re-appointment of the Auditors of the company.
BY ORDER OF THE BOARD
(XYZ)
Secretary.
NOTES: (1)A member entitled to attend and vote at the meeting is entitled to appoint a proxy to vote in his stead and a proxy need not be a member of the company.
(2)It was found from
Government sourcer, administering the functions under the Companies Act, that
of late there has been quite a substantial increase in the applications to the
Registrar of Companies for the extension of time pursuant to the second proviso
to section 166 of the Companies Act, 1956, for the holding of Annual General
Meeting within the period of time so extended by the Registrar. It may be
mentioned that under the aforesaid provision, the Registrar may, for any
special reason, extend the time within which any Annual General Meeting (not
being the first Annual General Meeting) shall be held, by a period not
exceeding three months. See Company Law Board Circular, following the Calcutta
High Court decision in Ajay Kumar Karnani's case.
The finalisation of accounts
sometimes is held up for various reasons and the Directors are not in a
position to present incomplete accounts before the members at the Annual
General Meeting of the company held even within the extended time.
The possible way to deal
with such a situation is to issue 'notice' of ordinary business including the
consideration of the accounts, balance sheet and the reports of the Board of
Directors and the Auditors thereon in the usual manner and if the accounts are
not even ready within the extended period of time sanctioned by the Registrar
to adjourn the business of consideration of the accounts and declaration of
dividends etc. and carry on the rest of the items of business for which the
notice of the Annual General Meeting was given. It must be noted that the
consideration of accounts etc. can only be transacted either at the Annual
General Meeting of the company or at any adjournment thereof, as an adjourned
meeting is considered as a continuation of the original meeting and only such
business as is left incomplete at the original meeting can be dealt with for
which notice was properly given as required by sections 172 and 173, of the
Companies Act, 1956.
Appointment
of an Auditor (S. 224)
Provisions of section 224 of
the Companies Act, 1956, was extended by the Companies (Amendment) Act, 1974,
to limit for the first time the number of company audits that an Auditor can
conduct.
Regulatory norm under section 224(1A) is that:
(a) Every company, before an
Auditor or retiring Auditor is proposed to be reappointed either at a Board
Meeting or at an Annual General Meeting, should obtain a written certificate
from the proposed Auditor or the retiring Auditor each time to the effect that
the appointment or re-appointment, if made, will be in accordance with the
statutory limits of the audits of the companies as per sub-section (IB) of
section 224 of the Act; and
(b) Every company shall
within seven days of the appointment or re-appointment of such Auditor give
intimation thereof to every Auditor so appointed.
Companies (Amendment) Act,
2000 has inserted a proviso after the third proviso to sub-section (1B) of
section 224 providing that the provisions of that sub-section will not apply to
a private company on and after the commencement of said Amendment Act.
Pursuant to section 224(IA),
every person appointed as the Auditor of a company to hold office from the
conclusion of the one Annual General Meeting until the conclusion of the next
Annual General Meeting shall, within thirty days of the receipt from the
company of the intimation of his appointment inform the Registrar in writing
that he has accepted or refused to accept the appointment. The prescribed form
of notice of intimation to the Registrar of Companies is Form No. 23B of the
Companies (Central Government's) General Rules & Forms, 1956, and is given
hereunder:
Notice by auditor
Registration No. Nominal
of company_____ capital
Rs ______
THE COMPANIES ACT, 1956.
NOTICE BY AUDITOR
[Pursuant to section
224(1A)]
I/We _____hereby give notice to the Registrar of
Companies,_____ pursuant to section 224(IA) of the Companies Act, 1956 that
I/we have received intimation dated the ____day
of____2001___from______Limited/Private Limited of my/our having been appointed
as Auditor(s) for the year ____and that I/we have accepted/refused to accept
the appointment as Auditor(s) of the company.
_______
Signature
Dated the ___day of____2003
Appointment
of Auditor by Special Resolution (S. 224A)
Exception to the provisions
of section 173 relating to ordinary and special business and Explanatory
Statement, however, has been made by insertion of a new section 224A by the
Companies (Amendment) Act, 1974, according to which in a company in which not
less than twenty-five per cent of the subscribed share capital is held by
public financial institution or Government companies or State or Central
Government or by a nationalised bank or an insurance company whether singly or
in combinations thereof appointment or re-appointment at each Annual General
Meeting of an Auditor or Auditors must be made by a Special Resolution.
Question often arises if such resolution should be notified under special
business with Explanatory Statement or could be grouped under ordinary business
as it forms an ordinary business pursuant to clause (a) of sub-section (1) of
section 173. No clarification has so far been received from the department of
Company Affairs in this regard. Keeping the spirit of the provisions of section
173 it is suggested that the appointment of an Auditor or Auditors be made by a
Special Resolution under an ordinary business without annexing any Explanatory
Statement thereto.
In regard to 'Special
Resolution' the statutory requirements to notice has been inserted in section
189 of the Act. In sub-section (2)(a) of the section, it was stated that in the
event of a Special Resolution, the intention to propose the resolution as a
Special Resolution has to be duly specified in the notice calling the General
Meeting or other intimation given to the members of the resolution. It is,
therefore, imperative that in' the case of a notice of passing of a Special
Resolution, the intention to propose the resolution as a 'Special Resolution'
should be clearly stated, otherwise the notice is vitiated and the resolution
will be invalid due to non-compliance of statutory requirement.
The tricky point in section
224A is that the twenty-five per cent of the holding of shares has been the
measuring stick which comprises of either preference or equity shares
irrespective of the fact that the former has no voting right. In other words,
if the financial institutions, like the L.I.C. or the Unit Trust or the General
Insurance Companies, who generally hold preference shares and if their combined
holding in preference shares only amount to twenty-five per cent of the
subscribed capital of a company, the appointment or re-appointment of the
Auditor of such company will be done pursuant to the provisions of this section
by a Special Resolution.
In sub-section (2) of the
section, provision is made to the effect that if company omits to observe the
provisions or fails to pass at its Annual General Meeting any Special
Resolution appointing an Auditor(s), it shall be deemed that no Auditor(s) had
been appointed by the company at its Annual General Meeting, and thereupon the
provisions of sub-sections (3) and (4) of section 224 of the Act shall be
applicable requiring the company to notify the fact to the Central Government
within seven days of the Central Government's power under sub-section (3) of
section 224 becoming exercisable and if a company falls to give such a notice,
the company, and every officer of the company who is in default will be
punishable with fine of up to Rs. 5,000/-.
Appointment of auditor by
Special Resolution
RUSHABH MANAGEMENT &
INFOSYS
Anand
388001
Dated
the _____2003
NOTICE
Notice is hereby given that
the Annual General Meeting of the Company will be held at the registered office
of the Company on___the____2003____at____a.m./ p.m. for the following purposes:
1. To consider and adopt the
profit and loss account of the company for the period from the
____2003___to___2003 and the
balance-sheet as at___2003____together with the Directors' and Auditors' report
thereon.
2. To declare dividends.
3. To appoint a Director in
place of Mr. XYZ retiring by rotation and being eligible for re-appointment.
4. To appoint Auditors and
to fix their remuneration and, in this connection, to consider, and, if thought
fit, to pass with or without modification, the following resolution as a
Special Resolution:
"RESOLVED that,
pursuant to the provisions of section 224A of the Companies Act, 1956, M/s. XYZ
& Company Limited, the Chartered Accountants, be and are hereby appointed
the Auditors of the company to hold office from the conclusion of this meeting
till the conclusion of the next Annual General Meeting of the company and the
Board of Directors be and is hereby authorised to fix their remuneration for
the said period."
By Order of the Board
(XYZ)
Secretary.
NOTE: A member entitled to attend and vote at the meeting is entitled to
appoint a proxy in his stead and the proxy need not be a member of the company.
No Explanatory Statement is
needed to be attached to this notice as there is no special business. Special
Resolution passed for appointment of Auditors in this particular case comes
under ordinary business.
Appointment
of Auditor and notice to the Central Government
[S. 224(4)]
A retiring Auditor of
company has an inherent right to be re-appointed at the Annual General Meeting
by whosoever authority appointed. The exceptions to this provision are if the
retiring Auditor suffers from any of the following maladies:
(i) He is not qualified for
re-appointment;
(ii) He has given the
company notice in writing of his unwillingness to be re- appointed;
(iii) A resolution has been
passed at the said Annual General Meeting appointing somebody instead of him or
providing expressly that he shall not be re- appointed;
(iv) Where notice has been
given (discussed hereinafter) of an intended resolution to appoint some person
or persons in the place of retiring Auditor, and by reason of the death,
incapacity or disqualification of that person or of all those persons involved
in the process of removal etc. of the retiring Auditor, the resolution cannot
be proceeded with.
Where at an Annual General
Meeting, no Auditor is appointed, the Central Government may appoint a person
to fill the vacancy.
The company shall within
seven days of the Central Government's power to appoint an Auditor, becoming
exercisable, give notice of that fact to that Government.
The notice should be
addressed to the Regional Director of the Department of Company Affairs,
Ministry of Law, Justice of Company Affairs, by the companies falling within
the jurisdiction of the Regional Director concerned.
As per the Citizen's Charter
of the Department of Company Affairs, Schedule II, Serial No. 3, the
appointment should be made within 45 days. [Press Note No. 9199, dated
9-81999].
Notice to Central Government
regarding appointment of an Auditor
RUSHABH MANAGEMENT &
INFOSYS
Anand 388001
Dated the____2003
To
The Regional Director,
Dear Sir,
Pursuant to the provisions
of section 224(4) of the Companies Act, 1956, notice is hereby given of the
fact that at the last Annual General Meeting of the Company held
on____the____2003_____a.m./p.m. at the registered office of the Company, the
members present resolved not to re-appoint the retiring Auditor of the Company.
As there had been no other person qualified to be an Auditor of the Company
proposed to be appointed at the said Annual General Meeting in the place of the
retiring Auditor, the position of the Auditor of the Company lies vacant to be
filled up by you in terms of section 224(3) of the Companies Act, 1956.
Yours faithfully,
BY ORDER OF THE BOARD
For RUSHABH MANAGEMENT &
INFOSYS
Director.
Notice to Central Government
regarding appointment of an Auditor
RUSHABH MANAGEMENT &
INFOSYS
Dated the ____2003
To
The Regional Director,
Dear Sir,
We regret to inform you that
the retiring Auditor(s) of the Company who had been proposed to be re-appointed
by a Special Resolution in terms of section 224A of the Companies Act at its
Annual General Meeting held on the_____2003
_____at_____ a.m./p.m. and its adjournment thereof held on_____ the_____2003
_____at____ a.m./p.m. (both held at the registered office of the company) could
not be re-appointed, as the members failed to pass the said Special Resolution
in either of the meetings with required majority.
The Company has not received
notice from any of its members proposing any person qualified to be an Auditor
of the Company to be appointed or to replace the retiring Auditor. It,
therefore, shall be deemed that no Auditor(s) had been appointed by the Company
at its Annual General Meeting as aforesaid.
Pursuant to the provisions of section 224(4) of the Companies Act, 1956,
notice is hereby given of the aforesaid fact with a request to appoint a person
or persons as the Auditor(s) of the Company to fill the vacancy and also to fix
remuneration there for and hold such position up to the conclusion of the next
Annual General Meeting of the company.
Yours faithfully,
For RUSHABH MANAGEMENT &
INFOSYS
Director.
Re-appointment
of an Auditor other than a retiring Auditor
Similar notice to the
Central Government is required to be served in the event of death or
disqualification of the retiring Auditor resulting in the resolution proposing
reappointment of the Auditor falling through and the position of the Auditor of
the company being not filled up.
Provisions of sub-section
(4) of section 224 is similarly applicable requiring the company to give notice
to the Central Government of fill up the vacancy of the office of the Auditors
of the company to be made who will hold such post up to the conclusion of the,
next Annual General Meeting of the company.
Notice to Central Government
regarding appointment of an Auditor
RUSHABH MANAGEMENT &
INFOSYS
Dated
the ____2003
To
The Regional Director,
Dear Sir,
We regret to inform you that
the retiring Auditor of the Company who had been proposed to be re-appointed at
the last Annual General Meeting of the Company held on
____the___2003____at___a.m./p.mexpired on the___2003___ the Company had not
been able to arrange to propose any other qualified person to hold the position
of the Auditor of the Company before the aforesaid date of the Annual General
Meeting, resulting a vacancy in the office of the Auditor of the Company.
Pursuant to the provisions
of section 224(4) of the Companies Act, 1956, notice is hereby given of the
aforesaid fact with a request to appoint a person or persons as the auditor(s)
of the Company to fill the vacancy and also to fix remuneration there for to
hold such position up to the conclusion of the next Annual General Meeting of
the Company.
Yours faithfully,
For RUSHABH MANAGEMENT &
INFOSYS
Director.
Special
notice for the appointment or removal of Auditor(s) (S. 225)
'Special notice' is required
as per section 190 for the appointment of an Auditor other than the retiring
Auditor and similarly for providing expressly that a retiring Auditor shall not
be re-appointed under section 225 of the Companies Act, 1956. Such a notice is
also required for removing the first Auditor(s) under section 224(5) and for
removing Auditor(s) before the expiry of his (their) term of office under
section 224(7) as provided by section 225(4). The implication of a 'special
notice' for the removal of Director under section 284 of the Act has been discussed
earlier. Here, the procedure and form of different notices required to
implement the 'special notice' applicable for appointment or removal of
Auditor(s) is given.
The notice so given should
conform to the requirements set out in S. 190 of the Act. The right given is
not an individual right.
Special notice for
appointment of Auditors
Dated the ____2003
To
M/s. RUSHABH MANAGEMENT & INFOSYS,
Dear Sirs,
I, XYZ, a member of the
Company, hereby give you a 'special notice' within the meaning of section 190
of the Companies Act, 1956, that at the ensuing Annual General Meeting of the
Company notified to be held on the_____2003
____at___ a.m./ p.m., I intend to move the following resolution as an ordinary
resolution for the removal of M/s. XYZ & Company Limited, the Chartered
Accountants, the Auditors of the Company who are retiring at the said Annual
General Meeting of the Company and to appoint M/s. BCD & Company, the
Chartered Accountants of ____Calcutta, as the statutory Auditors of the Company
in place of the said retiring Auditors:
"RESOLVED that M/s. XYZ
& Company Limited, the Chartered Accountants, the retiring Auditors of the
Company shall be and hereby not re-appointed at the said Annual General Meeting
and in their stead M/s. BCD & Company, the Chartered Accountants of
_____Calcutta, be and they are hereby appointed Auditors of the Company from
the conclusion of the said Annual General Meeting until the conclusion of the
next Annual General Meeting of the Company, at a remuneration as may mutually
be decided by the Board of Directors in negotiation with the said M/s. BCD
& Company, the Chartered Accountants."
Yours faithfully,
(XYZ)
Appointment
of Joint Auditors (S. 224)
Subject to the provisions of sub-section (113), at any Annual General Meeting, a retiring Auditor, by whatsoever authority, appointed, shall be re-appointed unless he is not disqualified for re-appointment etc. on such other grounds as enumerated in sub-section (2) of section 224 of the Act. There exists no provision in the Companies Act, 1956, in regard to appointment of a Joint Auditor to act along with the retiring Auditor to be reappointed at the Annual General Meeting. Keeping in mind the spirit of sections 224 and 225, it appears that for the appointment of a joint statutory Auditor also, a special notice as per section 190 from a member under section 225 is to be served on the company on the following lines.
Special notice for appointment
of Joint Auditors
Dated the _____2003
To
M/s. RUSHABH MANAGEMENT & INFOSYS,
Dear Sirs,
Being a member of your
Company having a registered address at 1, Scot Lane, Kolkata 700 001, I hereby
give you a 'special notice' 'within the meaning of section 190 of the Companies
Act, 1956, of my intention to move at the forthcoming
Annual General Meeting of
the company to be held on ____the ____2003____at_____a.m./p.m., the following
resolution as an ordinary resolution for the appointment of M/s. BCD &
Company, the Chartered Accountants of____ Calcutta as the Joint Auditors of the
company along with M/s. XYZ & Company, the retiring Auditors of the
Company:
" RESOLVED that M/s. BCD
& Company, the Chartered Accountants, be and are hereby appointed as the
Joint Auditors of the company, together with M/s. XYZ & Company, the
Chartered Accountants, the retiring Auditors of the company, from the
conclusion of this Annual General Meeting till the conclusion of the next
Annual General Meeting at such remuneration as may be mutually agreed upon
between the said M/s. BCD & Company and the Board of Directors of the
Company."
Yours faithfully,
(XYZ)
Action
on receipt of a notice proposing appointment of an Auditor (S.224)
On receipt of notice of such resolution, the company shall forthwith send a copy thereof to the retiring Auditor. The company is to circulate to the members a reply or a representation made by the retiring Auditor against the proposal for replacement or addition of statutory Auditors. The members should also simultaneously receive a copy of the proposal for the replacement or addition of the statutory Auditors along with representation of the retiring Auditors, if any, so that the members are aware of the entire process and prepare themselves to exercise their rights in the forthcoming Annual General Meeting either to adopt such a resolution or to reject it. The procedure that a company usually follows in this regard is to circulate the notice to the members in the form of an agenda to the Annual General Meeting and give a copy of the annual accounts in which also is accommodated the notice as aforesaid to the retiring Auditor with a covering letter drawing his attention to such notice of appointment of an Auditor or Joint Auditor. In practice, none of Auditors forward their representation to the company which would be contrary to the proposal initiated by the members. The company's requirement of informing the members of the receipt of notice etc. (for the appointment of a Joint Auditor) assumes the following form which is included in the agenda of the notice for the Annual General Meeting of the company.
Appointment
of joint Auditors to be proposed under special business as ordinary resolution
To appoint 'Joint Auditors'
and to fix their remuneration and to consider and, if thought fit, to pass with
or without modification., the following resolution of which a ,special notice',
as required under section 225 of' the Companies Act, 1956, has been received
from a member and which will be proposed as an ordinary resolution:
"RESOLVED that M/s. BCD
& Company, the Chartered Accountants, be and are hereby appointed as the
joint statutory Auditors of the company to work with the existing statutory
Auditors M/s. XYZ & Company, the Chartered Accountants, from the conclusion
of this Annual General Meeting till the conclusion of the next Annual General
Meeting at such remuneration as may mutually be agreed upon. between M/s. BCD &
Company and the Board of Directors of the company."
Although the appointment of
Joint Auditors comes within the purview of 'special notice' within the meaning
of Section 190 of the Companies Act, 1956, since the above notice has been put
in regular agenda, a form of Explanatory Statement, pursuant to the provisions
of section 173(2), has to be given in the following form: Explanatory Statement
pursuant to section 173(2) of the Companies Act appointing joint statutory
Auditors
The company has received a
notice from a member under section 225 of the Companies Act, 1956, proposing
the name of M/ s. BCD & Company, the Chartered Accountants, to be appointed
as the Joint Auditors of the company along with the existing Auditors M/s. XYZ
& Company, the Chartered Accountants, from the conclusion of this Annual
General Meeting until the conclusion of the next Annual General Meeting.
The special notice given by
the member is circulated in resolution form by the management of the company
thinking that appointment of Joint Auditor could be in line with the modern
management technique and for increasing the efficiency of the operation of the
company through stricter surveillance.
M/s. XYZ & Company, the
Chartered Accountants, and the retiring Auditors of the company have been duly
informed with a copy of the aforesaid notice and the company has so far not
received any representation to the contrary to the proposed resolution.
Earlier, a specimen of
notice was given for the placement of the existing Auditor by appointing
another Auditor in his place and the form of 'special notice' required for
that. A draft of another form of notice is given hereunder proposing not to
appoint the existing statutory Auditor and the consequential action that
requires to be initiated by the company.
Special notice by a member
for removal of an Auditor
Dated
the _____2003
To
M/s.
RUSHABH MANAGEMENT & INFOSYS,
Dear Sirs,
I, XYZ, a member of your Company having registered
address at 1, Scot Lane, Kolkata 700 001, do hereby give a 'special notice'
within the meaning of section 190 and under section 225(l) of the Companies
Act, 1956, of my intention to move the under mentioned resolution at the
ensuing Annual General Meeting of the Company proposing not to appoint M/s. XYZ
& Company, the Chartered Accountants, as the statutory Auditors of the
Company at the said Meeting:
"RESOLVED that M/s. XYZ
& Company, the Chartered Accountants, the Statutory Auditors of the
Company, who will be retiring at the ensuing Annual General Meeting of the
Company shall not be and hereby re-appointed as Statutory Auditors of the
Company and that the Statutory Auditors be appointed by the Central Government
to fill Lip the vacancy in terms of sub-section (3) of section 224 of the
Companies Act, 1956."
Yours faithfully,
(XYZ)
On receipt of the notice,
the company shall immediately give its members notice of the resolution in the
same manner as it gives notice of the meeting or if that is not practicable
shall give them notice thereof either by advertisement in a newspaper having an
appropriate circulation or in any other mode allowed by the articles not less
than seven days before the meeting and also give notice to the Government
within such seven days. This provision should be read with the contents of
section 225 of the Companies Act, 1956 under sub-section (2) of which a company
on receipt of notice of such a resolution, shall forthwith send a copy thereof
to the retiring Auditor. The general practice that is followed is to address a
'notice' by the company to its members and the retiring Auditors simultaneously
in the following form:
Special notice by a member
expressing not to re-appoint retiring Auditor -
RUSHABH MANAGEMENT &
INFOSYS
Dated
the ____2003
To,
The
Members,
and
M/s.
XYZ & Company, Chartered Accountants.
Dear Sirs,
This is to notify you, in
terms of section' 225(2) read with section 190 of the Companies Act, 1956, that
the Company has received a 'special notice' pursuant to section 225(l) of the
Act, from a member of the Company, a true copy of which is enclosed, proposing
to pass a resolution in the forthcoming Annual General Meeting signifying his
intention that M/s. XYZ & Company, the Chartered Accountants, being the
Statutory Auditors of the Company, shall not be reappointed at the said Annual
General Meeting to be held at the registered office of the Company on
_____the_____2003____at
___a.m./p.m.
BY ORDER OF THE BOARD
(X Y Z)
Secretary.
Notice
of unwillingness of re-appointment by the Auditor
An Auditor may serve notice,
in writing, of his unwillingness to be re-appointed as the Auditor of the
company. By virtue of the provisions of sub- section (2)(b) of section 224 of
the Companies Act, 1956, unless such notice is given by an Auditor, he becomes
automatically eligible for re-appointment by the members thereof at the
forthcoming Annual General Meeting.
Although he becomes so
eligible, but he does not become automatically eli0ble for reappointment unless
a specific resolution to the effect is passed in the meeting.
Due to old age, dissolution
of partnership or for other statutory constraints, it may not be possible for
an outgoing Auditor to seek re-appointment, but such unwillingness of
reappointment of Auditor has to be notified by the said retiring Auditor to the
company in the following form:
Unwillingness for
re-appointment as auditor
Dated
the _____2003
To
M/s. RUSHABH MANAGEMENT & INFOSYS,
Dear Sirs,
Please be notified in terms
of sub-section (2)(b) of section 224 of the Companies Act, 1956, that for
reasons beyond our control we are unwilling to be reappointed as the Statutory
Auditors of your Company any more after the conclusion of the ensuing Annual
General Meeting to be held on _____the____2003 ____at_____ a.m./p.m.
Yours faithfully,
For and on behalf of XYZ
& Company
(C D E) Partner.
Representation
by the retiring Auditor(s) [S. 225 (3)]
Pursuant to the provisions of sub-section (3) of section 225 of the Companies Act, 1956, a retiring Auditor, to whom a special notice of a resolution of a member, either proposing that he should not be re-appointed or that he be replaced by another Auditor has been circulated is entitled to make a representation, in writing, to the company (not exceeding a reasonable length) and request their notification to members of the company, and the company shall, unless the representations are received by it too late for it to notify so
(i)in any notice of the
resolution given to the members of the comp4ny, state the fact of the
representations having been made, and
(ii)send a copy of the
representations to every member of the company to whom notice of meeting is
sent, whether before or after the receipt of the representations by the
company, and if the copy of the representations are not sent, as aforesaid,
because they were received too late or because of the company's default, the
Auditor may (without prejudice to his right to be heard orally) require that
the representations shall be read out at the meeting.
Copies of such
representations should not be sent to the members or read out at the meeting if
the Court, on application made to it, satisfied that it will give needless
publicity of defamatory matter. Such application to the Court may be made by
the company or any other aggrieved person.
The circulation by the
company of the representation may be made without any comment or observation so
that the members who will be considering appointment of the Auditor may come to
a logical conclusion of the matter.
RUSHABH MANAGEMENT & INFOSYS
Dated the ____2003
NOTICE
Notice is hereby given that
M/s. XYZ & Co. the existing Auditors made representation again their
removal proposed by special notice and accordingly circulation is made
herewith, pursuant to section 225(3) read with section 190(2) of the Companies
Act, 1956, of the said representation forwarded by M/s. XYZ & Company, the
Chartered Accountants, the outgoing statutory Auditors of the Company.
You have been duly notified on the ___2003____of the receipt of 'special notice' from a member of the company proposing to move a resolution under section 225(l) of the Companies Act, 1956, for the appointment of M/s. BCD & Company, the Chartered Accountants of _____Calcutta, to replace the retiring Auditors, M/s. XYZ & Company, in the ensuing General Meeting to be held on the ____2003 ___
In terms of provisions of
section 225(2) of the Companies Act, 1956, the said retiring Auditor was
notified about the proposed notice of such resolution and the retiring Auditor
has made in respect thereto a representation, in writing, to the
company. As required under
sub-section (3) of section 225 of the Act, a copy of such representation is
forwarded herewith to you for your consideration.
By Order of the Board
(X Y Z)
Secretary.
Just before, it was
indicated that the retiring statutory Auditor expressed his unwillingness to be
re-appointed and so the matter of communication of notices rest at that.
Provisions of sub-section (3)(a) of section 225 vest the responsibility on the
company, the act of notifying the members of the notice of resolution of removal
of a retiring Auditor and also to state the fact whether it is of receipt of a
representation from the retiring Auditor or not even though no representation
is received and only special notice is received by the company.
Replacement of retiring auditor
S. 225(2)-Notice pursuant to section 225(2)
RUSHABH MANAGEMENT & INFOSYS
Dated the ___2002____
NOTICE
Notice is hereby given,
pursuant to section 225(2), that the company has received a 'special notice'
under sub-section (1) of the said section, proposing to pass an ordinary
resolution for the replacement of the retiring Auditors M/s. ABC & Company,
the Chartered Accountants, by appointing M/s. BCD & Company, at the ensuing
Annual General Meeting of the Company to be held on ____the___2003___at___a.m./p.m.
A copy of the proposed
resolution of which due notice has been given to M/s. ABC & Company, the
retiring Auditors, is enclosed for your perusal.
Pursuant to sub-section
(3)(a) of section 225 of the Companies Act, 1956, we state that the Company has
not received any representation from the retiring Auditor(s) up to the date of
this notice and if received at a subsequent date, the Company will arrange
either the circulation of a copy of such representation to the members provided
there is sufficient time left for such circulation or reading out of the
representation at the very meeting.
BY ORDER OF THE BOARD
(X Y Z) Secretary.
Notice of a proposed resolution under
'special notice'
[S. 225(3) read with section 190(2)]
Under section 190(2), 'special notice' may also be notified through newspaper advertisement. Notice of intention to move a resolution under section 225(1) has to be given to the company not less than fourteen days before the meeting (both the dates of service or deemed service and the date of meeting being excluded). On the company's part, it has to give notice to the members either individually or by newspaper advertisement or as otherwise prescribed by the articles of the company not less than seven days before the meeting.
Special Notice through newspaper advertisement
RUSHABH MANAGEMENT &
INFOSYS
Dated
____
Notice of proposed
resolution under 'special notice' in terms of section 225(3) read with section
190(2) of the Companies Act, 1956.
Notice is hereby given that the Company has received a 'special notice' dated____the____2003 ___from a member proposing to pass an ordinary resolution at the next Annual General Meeting of the Company appointing M/s. BCD & Company, the Chartered Accountants, as the statutory Auditors of the Company in place of M/s. ABC & Company, the retiring Auditors of the Company.
By Order of the Board (X Y
Z)
Secretary
Disqualification of Auditors (S. 226(3))
Sub-section (3) of section
226 provides that certain persons will not be qualified for appointment as
auditor of a company and they are the following:
(i) a body corporate;
(ii) an officer or employee of the company?
(iii)a person who is a
partner, or who is in the employment, of an officer or employee of the company;
(iv)a person who is indebted
to the company for an amount exceeding Rs. 1,000/- or who has given any
guarantee or provided any security in connection with the indebtedness of any
third person to the company for an amount exceeding Rs. 1,000/-.
(v) a person holding any security of that company after a period of 1
year from the date of commencement of the Companies (Amendment) Act, 2000.
Demand for Poll
Dated:_____2002
To
The Chairman of the Board,
X and Co. Limited.
Dear Sir,
We, the undersigned, being
the holders of _____equity shares of Rs . ___each in the Company demand that a
poll be taken in respect of the following resolution, which was declared
carried on a show of hands (or which has been voted on by a show of hands).
"RESOLVED that .......................”
Signatures.
Notice of Poll
X AND COMPANY LTD.
(Registered Office ................)
Dated
2003
Notice is hereby given that
a poll will be taken on the following resolution, on____ the___ day of ___2002
between two hours of ___and ___at the ____Registered Office of the Company.
"RESOLVED that
....................
By order of the Chairman
Secretary.
Difference between removal of Director and
Auditor
The process of removal of a
Director under section 284 of the Companies Act, 1956, has also to be initiated
by a 'special notice' within the meaning of section 190 of the Act. This has
been discussed earlier with draft specimen notice. The part of notification of
representation by a Director sought to be removed and circulation of such
representation is more in the line, as discussed above in respect of removal of
a retiring Auditor. Difference between the provisions of sections 225 and 284
lies in filling the vacancy caused by removal of a Director. The sub-section
(5) of Section 284 makes the position quite clear stating:
"A vacancy created by
the removal of a Director under this section may, if he had been appointed by
the company in General Meeting or by the Board in pursuance of section 262 be
filled by the appointment of another Director in his stead by the meeting at
which he is removed, provided special notice of the intended appointment has
been given under sub-section (2).
A Director so appointed
shall hold office until the date up to which his predecessor would have held
office if he had not been removed as aforesaid.
Serving of a notice under
section 257 of the Companies Act, 1956, required to appoint a Director in the
casual vacancy or a Director retiring under section 260 of the Act has been
partially discussed and a form of notice under section 257(l) has been given
earlier.
Thus, 'special notice' under
section 190 is required under the following provisions of the Companies Act,
1956:
Purpose of giving special Notice
Section 257, as it stands,
permits a person to stand for directorship at any General Meeting which may be
held, and not necessarily only at an Annual General Meeting. So long as a
company is not having the maximum number of Directors fixed by its articles,
additional Directors may be appointed at General Meetings up to the maximum
limit.
1. To appoint an Auditor a person other than the
retiring Audit6r.
2. To provide expressly that the retiring Auditor
shall not be re-appointed .
3. To appoint any person other than the retiring
Director as the Director.
4. To remove Directors .
The object of giving special
notice of a resolution is to invite the special attention of the company and,
through the company, of the members to it, so that they may appreciate that
there is something special in it, which requires their attention.
In cases where the company
itself, that is, the Board of Directors, has to move a resolution either for
the removal of a Director or the removal of an Auditor or appointment of a new
Auditor in place of a retiring auditor, there is no question of any special
notice being given to the company. In such case, the company may give the
required special notice by including in it the notice of the meeting itself or
give a fourteen days' notice afresh to the shareholders as provided in section
190.
It should be noted that
where a candidate does not himself give notice of his candidature, and some
other person who is a member gives notice of his intention to propose him for
directorship at the meeting, and for some reason or other falls to propose him
at the meeting, then, unless the candidate himself has not less than fourteen
days before the meeting given the notice, as required by section 257, he will
not be eligible for appointment at the meeting.
But the language of the
section is such that it does not prohibit the company itself from appointing
him as a Director at the meeting, even though he has not complied with the
requirements of the section.
Though the word 'member' is
used, it would seem that a member holding preference shares only cannot give
the notice, as he has no right to vote on the resolution. Only a member having
a right to vote on the appointment of a Director can move a resolution for such
appointment.
As sub-section (2) does not cover sub-section (1A)
also, it may appear as though every private company is also required to
advertise the candidature for directorship. But subsection (1A) has to be read
as continuation of sub-section (1) and the whole section as not applying to
private companies which are not subsidiaries of public companies.
In any case sub-section (I A) of section 257 will
have to be complied with.