SPECIAL NOTICE

Section 115 of the Companies Act 2013 requires certain business to be transacted in general meeting only after a special notice of the resolution.

There are certain businesses under the Act and may be some additional businesses in the articles of the company, which requires special notice for resolution. The notice of the intention to move such resolution shall be given to the company by prescribed number of members holding not less than one percent voting power or holding shares of paid – up value of five lakh rupees. On receipt of such notice from these members, the company shall give notice in prescribed manner to its members.

The Act has provision for special notice in following cases:

(a)  Resolution for appointment of an auditors other the retiring auditor at an annual general meeting [Section 140(4)].

(b)Resolution at an annual general meeting to provide that a retiring auditor shall not be re-appointed [Section 140].

(c)  Resolution to remove a director before the expiry of his period of office [Section 169(2)]

(d)  Resolution to appoint another director in place of the removed director [(Section 169(5)]

The Rule 23 of the Companies (Management and Administration) Rules 2014 explain the procedure:

A special notice required to be given to the company shall be signed, either individually or collectively by such number of members holding not less than one percent of total voting power or holding shares on which an aggregate sum of not less than five lakh rupees has been paid up on the date of the notice. [Rule 23(1)]

This is possible that all these members may act collectively with collective mind or all of them acting individually but incidentally doing same thing.

The requirement is all these members collectively hold

(a)  not less than one percent total voting power, or

(b)  shares of not less than fife lakh rupees paid up,

whichever is less.

The notice shall be sent by members to the company not earlier than three months but at least fourteen days before the date of the meeting at which the resolution is to be moved, exclusive of the day on which the notice is given and the day of the meeting. [Rule 23(2)]

This is strategically important for general meeting called by management but resolution is proposed to be moved by members. However, members have option for general meeting called at requisition of members.

The company shall immediately after receipt of the notice, give its members notice of the resolution at least seven days before the meeting , exclusive of the day of dispatch of notice and day of the meeting , in the same manner as it gives notice of any general meetings. [Rule 23(3)]

Where it is not practicable to give the notice in the same manner as it gives notice of any general meetings, the notice shall be published in English language in English newspaper and in vernacular language in a vernacular newspaper, both having wide circulation in the State where the registered office of the Company is situated and such notice shall also be posted on the website, if any, of the Company. [Rule 23(4)]

The notice shall be published at least seven days before the meeting, exclusive of the day of publication of the notice and day of the meeting. [Rule 23(5)]

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