How to Requisition an EGM: Section 100

Knowing how to requisition an EGM matters when a board is unwilling to put a question to shareholders. Section 100 of the Companies Act, 2013 gives members holding one tenth of the voting capital a right to compel an extraordinary general meeting, and it backs that right with a fallback: if the board does not act inside two fixed deadlines, the requisitionists can call and hold the meeting themselves, at the company's cost. This guide walks the process in order, with the thresholds and clocks as the section states them. It is not investment advice.

How to requisition an EGM, step by step

Step 1: Check the threshold on the right date. Section 100(2) measures the holding on the date of the receipt of the requisition, not on the date it was signed or posted. For a company having a share capital the test is members who hold not less than one tenth of such of the paid-up share capital of the company as on that date carries the right of voting. Note the qualifier: it is voting capital, not paid-up capital at large. For a company not having a share capital, the test is members having not less than one tenth of the total voting power of all the members having a right to vote on that date.

Step 2: Set out the matters. Section 100(3) requires the requisition to set out the matters for the consideration of which the meeting is to be called. A requisition that asks for a meeting without naming the business does not satisfy the sub-section.

Step 3: Sign it and deliver it to the registered office. The same sub-section requires the requisition to be signed by the requisitionists and sent to the registered office of the company. Delivery to any other address does not start the clock.

Step 4: Watch two deadlines, not one. Section 100(4) sets both:

• the Board must proceed to call a meeting within twenty-one days from the date of receipt of a valid requisition, and
• that meeting must be for a day not later than forty-five days from the date of receipt of the requisition

A board that calls a meeting on day 20 but sets it for day 60 has satisfied the first limb and failed the second.

Step 5: If the board misses either limb, call it yourself. The meeting may be called and held by the requisitionists themselves within a period of three months from the date of the requisition. Section 100(5) requires that meeting to be called and held in the same manner in which the meeting is called and held by the Board, so the notice rules in section 101 and the explanatory statement rule in section 102 apply unchanged.

Step 6: Claim the costs. Section 100(6) requires any reasonable expenses incurred by the requisitionists in calling a meeting under sub-section (4) to be reimbursed by the company, and the sums so paid to be deducted from any fee or other remuneration under section 197 payable to such of the directors who were in default in calling the meeting. The cost lands on the directors who did not act, not on the general body of shareholders.

The clocks in one table

The notice, and the shorter notice route

Section 101(1) requires not less than clear twenty-one days' notice, either in writing or through electronic mode in the prescribed manner.

The proviso allows a shorter notice if consent is given in writing or by electronic mode. For a meeting other than an annual general meeting, that consent must come from members of the company holding, if the company has a share capital, majority in number of members entitled to vote and who represent not less than ninety-five per cent of such part of the paid-up share capital as gives a right to vote, or, if the company has no share capital, not less than ninety-five per cent of the total voting power exercisable at that meeting. For an annual general meeting the test is not less than ninety-five per cent of the members entitled to vote.

Section 101(3) sets who gets the notice: every member, the legal representative of any deceased member or the assignee of an insolvent member, the auditor or auditors of the company, and every director. Section 101(4) then protects the meeting from an honest slip: any accidental omission to give notice to, or non-receipt by, any person entitled to it shall not invalidate the proceedings.

Every item at an EGM is special business

This is the trap in a requisitioned meeting. Section 102(2)(b) provides that in the case of any meeting other than an annual general meeting, all business shall be deemed to be special. So every item on the requisition needs a statement under section 102(1) annexed to the notice, setting out the material facts concerning it, including the nature of the concern or interest of every director, the manager, any other key managerial personnel and their relatives.

What is an explanatory statement under section 102 covers what that statement has to carry and what happens when it is thin.

Where the meeting is held

The proviso to section 100(1), inserted by Act 1 of 2018, section 27, with effect from 9 February 2018, requires an extraordinary general meeting of the company to be held at a place within India. The one exception on the face of the proviso is an EGM of the wholly owned subsidiary of a company incorporated outside India.

The related route: circulating a resolution instead

If the object is to put a resolution and a statement in front of members at a meeting that is already happening, section 111 is the cheaper instrument. It uses the same number of members as section 100, and on their written requisition the company must give notice of the resolution and circulate the statement.

Section 111(2) attaches two conditions:

• a copy of the requisition signed by the requisitionists must be deposited at the registered office not less than six weeks before the meeting where it requires notice of a resolution, and not less than two weeks for any other requisition
• a sum reasonably sufficient to meet the company's expenses in giving effect to it must be deposited or tendered with the requisition

Section 111(3) is the escape valve for the company: it is not bound to circulate a statement if, on the application of the company or any aggrieved person, the Central Government declares that the rights are being abused to secure needless publicity for defamatory matter. Section 111(5) makes a default a penalty of twenty-five thousand rupees on the company and on every officer in default.

Note the cost asymmetry against section 100. Under section 111 the requisitionists fund the circulation up front. Under section 100(6) the company reimburses them and recovers from the defaulting directors.

If a meeting is impracticable at all

Section 98 gives the Tribunal power, either on its own motion or on the application of any director or member entitled to vote, to order a meeting other than an annual general meeting to be called, held and conducted in such manner as it thinks fit, and to give ancillary or consequential directions. Its proviso allows a direction that one member present in person or by proxy shall be deemed to constitute a meeting, which is the answer to a deadlock where a quorum can never be assembled. A meeting called, held and conducted under such an order is deemed, for all purposes, to be duly called, held and conducted.

What is the National Company Law Tribunal covers the forum this application goes to.

The quorum trap

Section 103(2) treats the two kinds of meeting differently when a quorum fails to appear within half an hour of the appointed time. An ordinary meeting stands adjourned to the same day in the next week at the same time and place, or to another date, time and place the Board determines. A meeting called by requisitionists under section 100 stands cancelled.

There is no second sitting for a requisitioned meeting. If the members who signed the requisition do not turn out, the process ends and has to be started again.

What reaches the public record

For a listed company, a requisitioned EGM leaves a trail outside the company: the notice, the exchange announcement, and the voting results afterwards.

• What is a voting results filing covers the disclosure of how each resolution actually went.
• What is a postal ballot covers the route by which some business is transacted without a meeting at all.
• What are minutes of a general meeting covers the record the meeting leaves inside the company.
• What is material event disclosure covers the wider announcement obligation a listed company is under.

Flock reports the filings themselves, each stamped with its date and linked back to the exchange or regulator that published it. What any of it means for you is your call to make.