16 December 2013
Hello, I am director of a private limited company. The company has paid up capital of 100000 (10000 shares)Out of which I hold 2000 Shares. Now I am London and the other promoters of the company who hold 80% shares has passed an extraordinary resolution at my back and have increased the authorized share capital to 300000. They don't know I have an account with MCA and I can check all the filed documents. Is it allowed without my authorization or signature?
16 December 2013
Thank You Ajay, If I want to ignore their move for how long do you think its practical and safe to ignore their move before pursuing it with a lawyer ?
16 December 2013
If you are well aware that it is happening on back of you which is not good as per legal provisions of Companies Act, 1956, then you will also considered as an officer in defaulted and you will also be equally liable with other director.
So firstly you mark a mail to other director for doing this and demand justification from other director.
If they not giving you proper answer, then you again made a mail and there after you also made a mail to MCA about this happening.
even in case of special resolution, 75% majority is required, which in this case if available with the promoter who increased the share capital. So if the minority shareholder did receive the notice for the meeting (which is not the case here), would the proceedings still be considered void?
75% voting is not required for special resolution but three times the number of votes cast against the resolution is required. So if minority shareholder are more than in voting then his votes play the main role.
Section 189(2) of the Act, provides that certain matters are deemed to have been passed at a general meeting as a special resolution only, if the votes cast in favour are at least three times the number of votes cast against the resolution, if any. A special resolution passed at a meeting attended only by the shareholders who were in arrears in respect of calls, has no legal effect The resolution shall be a special resolution if it fulfills the following conditions:— (a) The intention to move the resolution as 'special resolution' is specified in the notice for the meetings. (b) The text of the special resolution alongwith explanatory statement shall be given in the notice. (c) The required notice for convening the meeting has been given as provided under the Act. (d) The votes cast in favour of the resolution are at least three times the votes cast against, if any.
17 December 2013
thanks for the clarification sir. But even in that case, given that the shareholder has only 20% and the promoter has 80%, wont he be unable to stop the passing of the resolution as vote cast in favor shall be 4 times?
17 December 2013
It means, in case of listed company in which promoters have more than 74% of the shares then no need to take consent of more than 1% of other shareholders for passing SR.
17 December 2013
I believe yes. that is the reason investors ask for 26% of the shareholding so that they can ensure no averse resolution can be passed. Atleast thats what we advise our equity clients.
17 December 2013
I meant sir as you said you need three times the "against vote" to pass the special resolution, to avoid harmful resolutions by majority shareholders, the strategic investors insist on 26% shareholding. This helps as the majority shareholder fail to muster 3 times the 26%!!
17 December 2013
But in listed company shareholders are lived all over the world and most of them can not attend the meeting of shareholders.
Generally in listed company 200 to 300 shareholders are available in meeting there after the special resolution is passed. For passing SR voting in favour of special resolution should be three times against the vote cast, it does not matter of holding of their shares.
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