Quorum for AGM

Rk Gupta (90 Points)
Replied 22 November 2021

Agm can be conducted through proxies ,. see section 105
2. Yes meeting can be conducted with one mber if meting called has no quorum then automatically adjour and member present constitute quorum even if mber is one
3. if you meet crriteria for a/v meeting you can do that
4 no exception members or their proxies or authorised representative has to be present.
R K gupta

2 Like

kings22 (Shareholder) (166 Points)
Replied 23 November 2021

Hello Mr. Gupta -

Many Thanks for your response. It is really appreciated.

I came across this article - https://blog.ipleaders.in/heres-need-know-proxy-companies-act-2013/

This states that the proxy is not counted towards the quorum of the meeting (See section above the Rights and Restrictions of the Proxy). How do we conduct the meeting if none of the shareholders/.members are in India and the only one in India is not well.

Appreciate any insights and best way to conduct AGM in India in such circumstances.

Regards

Tony

Rk Gupta (90 Points)
Replied 23 November 2021

Dear mr tony
section 105is cleat
Any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person as a proxy to attend and vote at the meeting on his behalf: Provided that a proxy shall not have the right to speak at such meeting and shall not be entitled to vote except on a poll: Provided further that, unless the articles of a company otherwise provide, this sub- section shall not apply in the case of a company not having a share capital: Provided also that the Central

see section. it says
1 proxy can not speak. i.e can not deliberate. it is because shareholder give him authority and instruct whether to accept or reject authority. so he can apply hismimd
2 on poll he can vote but not on shw of hand
but section no where restrict proxy not to count for quorum
logically also if his presence for quorum is not counted them what is the logic of giving proxy
doctimaray meaning of proxy is to represent phycally any ant apply his own mind butto act as instrcted.
3 quorum is determined before meeting starts and restrictions are after .eeting starts
thus proxy is counted for quorum

2 Like

kings22 (Shareholder) (166 Points)
Replied 26 November 2021

Dear Mr. Gupta -

Many thanks for your clarification. This is very helpful. It looks like the information on ipleaders.in is misleading and misrepresented. I have been researching also internet and you are right section 105 does not state anywhere if quorum does not include proxies. I am now wondering if there is another section that may state that. Any ideas?

Life is really simple if they can just allow EGM / AGMs also to be held using AV mode permanently. Our operation is very small and it seems they just create overhead with such rules for no reason. What do you think are chances of this happening permanently similar to board meetings?

Many Thanks again.

Tony

Rk Gupta (90 Points)
Replied 27 November 2021

Dear mr no there Tony
there is no other section
concepts of CA of 1913 i.e. 108 years old but our parliament is. not aware how to move further until institute gives them to simplify and business growth oriented concepts instead of simply compliance.

kings22 (Shareholder) (166 Points)
Replied 28 November 2021

Dear Mr. Gupta - Many Thanks for your reviewing this information. Interestingly there is so much error in how things are getting published. I also reviewed section 105 closely and don't see anywhere that states that quorum should exclude proxies. In addition to the IPLeaders website with the error (link above), I also came across this guide from CFA institue which I found very helpful as I am abroad and it really educated me quite a bit - I am surprised even this has the same error on page 16 section 5. I wonder how this is happening at so many places and such a big mis-representation is happening by the CFA institute. Here is the link to the guidebook ---> https://www.cfainstitute.org/-/media/documents/article/position-paper/an-investors-guide-to-shareholder-meetings-in-india.ashx

I appreciate your reviewing this with me. I am also consulting with our auditor in India. The good news is that worst case there is a Adjournement route available so we can adjourn and after that do it again in 3 days and just have one Shareholder or his proxy visit and complete the meeting requirement. Such overhead is good for public companies but for small family-owned companies, not clear what is MCA/ROC trying to achieve here. In USA, we have a single form that is filed with no requirement to submit such detailed audited statements - crazy paperwork really in our view with the level of micromanagement that is not required - it is distracting and probably not letting government also do its job and focus on operational tactical priorities which is not even needed. Hope the government does something about simplifying the processes and such laws if they want India to be truly investor friendly and make it easy for them to do business.

I welcome others on this forum to share their perspectives and if they have a reaction to anything stated above.

Regards

Tony

kings22 (Shareholder) (166 Points)
Replied 28 November 2021

Dear Mr. Gupta - Many Thanks for your reviewing this information. Interestingly there is so much error in how things are getting published. I also reviewed section 105 closely and don't see anywhere that states that quorum should exclude proxies. In addition to the IPLeaders website with the error (link above), I also came across this guide from CFA institue which I found very helpful as I am abroad and it really educated me quite a bit - I am surprised even this has the same error on page 16 section 5. I wonder how this is happening at so many places and such a big mis-representation is happening by the CFA institute. Here is the link to the guidebook ---> https://www.cfainstitute.org/-/media/documents/article/position-paper/an-investors-guide-to-shareholder-meetings-in-india.ashx

I appreciate your reviewing this with me. I am also consulting with our auditor in India. The good news is that worst case there is a Adjournement route available so we can adjourn and after that do it again in 3 days and just have one Shareholder or his proxy visit and complete the meeting requirement. Such overhead is good for public companies but for small family-owned companies, not clear what is MCA/ROC trying to achieve here. In USA, we have a single form that is filed with no requirement to submit such detailed audited statements - crazy paperwork really in our view with the level of micromanagement that is not required - it is distracting and probably not letting government also do its job and focus on operational tactical priorities which is not even needed. Hope the government does something about simplifying the processes and such laws if they want India to be truly investor friendly and make it easy for them to do business.

I welcome others on this forum to share their perspectives and if they have a reaction to anything stated above.

Regards

Tony

Chirag (Professional) (1979 Points)
Replied 30 November 2021

Go through ICSI Guidance Note on Board Meeting and General Meeting ,it's so well updated and mandatory to be followed by some companies ( Public + Listed SS-1&SS-2)

Also note proxies are not counted towards quorum,they only have Voting right that is also on poll , Private company has been given to modify their articles for section 101-109 ( But still Min 2 members are required to constitute a quorum ), authorised representative counted towards quorum and have all rights as of member but proxy is only for voting or to join demand for voting . Normally Non Individual holder /Governor and President appoint authorised representative...

it's expected that VC/OAVM may soon become permanent feature of conducting AGM/EOGM in india.

If you face such issue then you can transfer your one share also to any of family member by SH-4 and if he personally present can also become quorum .