Notices, Resolutions and Minutes
Notices, Resolutions and Minutes tests meeting documentation. The focus is on statutory notice periods, contents, quorum, resolution types and the accuracy of minutes as a permanent record.
Notice and quorum
- General meeting: 21 clear days’ notice under Section 101, excluding the day of service and the day of the meeting. Contents include place, date, time, business and proxy form.
- Special business: every item requires an explanatory statement under Section 102 disclosing the nature of concern, interest of directors or promoters and shareholding, where relevant.
- Board meeting: seven days’ notice under Section 173, with a shorter-notice mechanism subject to statutory conditions.
- Quorum: Section 103 for general meetings; Section 174 for board meetings, being one-third of total strength or two directors, whichever is higher.
Resolutions
An ordinary resolution requires a simple majority. A special resolution requires at least three times the votes cast against it. Special notice under Section 115 is required for specified appointments, including an auditor other than the retiring auditor under Section 140(4). A resolution by circulation is possible for board business except matters required by law to be transacted at a meeting.
Minutes
Section 118 requires minutes within 30 days, entry in the minutes book, consecutive page numbering and signature by the chairman. Minutes are evidence of proceedings and cannot be altered.
Worked example
A notice for an AGM includes an item appointing a director in place of a retiring director and fixing his remuneration. The explanatory statement must identify the appointee, his expertise, his shareholding and any relationship with directors or promoters. The reasoning is that members cannot vote intelligently on a special-business item unless the notice discloses the concern and interest involved. A bare agenda is insufficient.
Traps
Counting the day of service as part of the 21 days; omitting the proxy form; recording debate verbatim instead of resolutions; signing minutes months later; and using a shorter notice without the written consent of the required members.