Section 103: Quorum for Annual General Meetings

In layman language, quorum means the minimum number of members of an assembly or society that must be present at any of its meetings to make the proceedings of that meeting valid.

Section 103 of the Companies Act, 2013 deals with the quorum for Annual General Meetings of the Company

1. In Public Company -

a)    5 members personally present shall be the quorum, if number of members as on the date of meeting are up to 1000;

b)  15 members personally present shall be the quorum, if number of members as on the date of meeting are from 1001-5000;

c)  30 members personally present shall be the quorum if the number of members as on the date of meeting exceeds 5000

2. In Private Company -

a)    2 members personally present shall be the quorum.

In case of class meeting: where all the shares of a particular class are held by a single person, then one person may constitute a class meeting.

If articles provide for a larger number, then such larger number shall be the quorum for the meeting.

Applicability under Secretarial Standard 2

1. The quorum shall be present throughout the meeting, not only at the commencement of such meeting.

2. a duly authorized representative of a body corporate or President of India or Governor of State, shall be deemed to be a member personally present, and enjoy all rights as to the member in person.

3. One person may be an authorized representative of more than 1 body corporate, and he shall be treated more than one person for the meeting.

However to constitute a meeting, 2 members shall be present personally. Hence one more member is required to be present in such case to hold the meeting valid. (For both public and private companies)

4. In case of remote e-voting, members shall have the right to attend the meeting and their presence shall be counted for quorum of the meeting.

5. Where a member, being an interested party, if present, but not allowed to vote on a particular item, shall be counted for quorum.

6. For items being transacted through postal ballot, the presence of quorum does not apply.

Presence of Directors in the Meeting

1.    Where the Directors are unable to attend the meeting, the Chairman shall explain the reason of such absence.

Presence of Chairman in the Meeting

1.    The Chairman of Committees of the Company shall attend the meeting whether by himself or by the representative, if authorized by the Chairman of any such committee.

2.    The Company Secretary shall sit with the Chairman and must assist him in the conducting of the meeting.

Presence of Auditors and Secretarial Auditor in the Meeting

1.    Unless exempted by the company, the auditors of the company shall attend the meeting either by themselves or through their authorized representatives,

2.    They shall have a right to be heard at the meeting on the matter that relates to the auditors.

3.    The authorized representative who attends the meeting shall be qualified to be an auditor.

ADJOURNMENT OF ANNUAL GENERAL MEETING:

If the quorum is not present within 30 minutes from the time appointed form holding the meeting,

the meeting shall stand adjourned:

a)    to the same day in the next week at the same time and place; or 

b)    to such other date and other time and place as the Board decides.

Conditions for adjournment under clause ‘b’ above -

Ø  at least 3 days notice to the members either individually; or

Ø  by publishing an advertisement in the newspaper (one in English and in Vernacular language), which is in circulation at a place where registered office is situated.

In case the meeting is called by the requisitionists u/s 100 (Exta Ordinary General Meeting), the meeting shall stand cancelled.

If the quorum is not present in the adjourned meeting also, the members present shall be the quorum.

Q. According to section 103 of Companies Act, 2013, in case of a Private Limited Company, 2 members personally present shall be the Quorum.

If Quorum is not present within half an hour from the time appointed for holding a meeting, then the meeting shall stand adjourned, and if at the adjourned meeting also, Quorum is not present, the members present shall be the Quorum.

However, in case, there are only 2 shareholders. Out of these, one cannot attend AGM, according to above, whether one person attending the AGM, would be taken as quorum in case of adjourned meeting?

ANS: No, one person cannot form quorum of an adjourned meeting. As per the Ministry of Corporate Affairs Letter No. 8/16(1)/61-PR dated May 19, 1961, wherein the the Ministry has also issued that a single person cannot by himself constitute a quorum at the adjourned AGM.

References:
Companies Act, 2013
Secretarial Standards II

Contact:

CS Divyanshu Bansal
Email ID: divyanshubansal401@gmail.com