Notice of Meeting

 NOTICE 

Notices are sent/used to provide intimation to the members of group. These are sent to attend the meetings of the shareholders, executing committee,finance committee etc. These should be circulated to all the members within reasonable/prescribed time before the start of the meeting. It is the formal invitation to shareholders, directors an other members entitled to attend the meeting.

In case of group meeting, notice should be sent to all the members of the group.

Proper Notice :

'Notice' means an advance intimation of the meeting so as to enable the person concerned to prepare himself for it. The notice must be clear and should state the purpose for which the meeting is called. The notice must be in writing and it must be given at least 21 clear days before the date of the meeting. In

at the expiry of 48 hours after it is posted.

The date of posting and the date of meeting have to be in addition to 21 days. Intervening holidays are counted as period of notice.

According to the provisions of the companies Act, 1956, if the members holding 95% of the paid-up share capital having voting rights consent then a shorter notice may be sufficient to convene a meeting. Such consent may be before the meeting or after the resolutions were passed.

Types of Notice

I. On the Basis of Length :

According to length, notice can be of three types:

1. Ordinary Notice : When all those who are concerned with the business of the meeting and are entitled to attend it,are communicated of the Date, Time,Place and Business of the meeting, such a communication is called the Notice of the Meeting. When the length of notice is not less than twenty-one (21) days before Meeting, such a notice is called Ordinary Notice.

For the calculation of 21 days, the day on which the notice is served and the date of meeting are to be excluded. The part of the day after the hour at

which the notice is deemed to have been served, cannot be combined with part of the day before the time of the meeting on the day of the meeting to form one day, Where the notice is sent by post, it shall be deemed to have been received

at the expiry of forty-eight hours after the posting. It means forty-eight hours after posting should be excluded from the calculation of twenty-one days.

2. Long Notice : The length of the notice to convene a meeting, if more than twenty-one days before the meeting, it is called long notice. A long notice can

be issued by a company if the Articles of Association of the company validly provide for longer notice than the statutory minimum period, i.e., twenty-one days before the meeting.

3. Short Notice: When the length of the notice to be served to hold a meeting is less than twenty-one days, it called short notice. The Companies Act does not provide for a notice less than twenty-one days before the meeting, but there are a few cases, when a short notice is considered to be sufficient.

Conditions for Short Notice/Exceptions to Minimum Statutory Period for Notice: The following are the conditions, when a short notice can be validly issued:

(i) When the consent of all the members is received, who can attend and vote at the meeting in case of Annual General Meeting.

(ii) In case of any other meeting, if the members holding not less than 95 percent paid-up share capital of the company or holding not less than 95 percent of the total voting power of the company when a company does not have share capital, consent to the notice of less than twenty-one days.

It is open to the shareholders to give their consent subsequent to the meeting. The only requirement is that the shareholders should give their consent with full knowledge of the implication of the resolution. Note that all members can similarly agree to the accounts being sent to them less than 21 days before the annual general meeting.

A meeting at a short notice may be valid in respect of one resolution and may not be in respect of another resolution as it depends upon the voting rights of the members in the meeting and their consent. The members can voluntarily consent to a short notice either before the meeting is held or after the resolutions are passed. A meeting which could be invalidated due to shorter notice, may be

validated/rendered effective if those members becoming aware of the defect do not raise objection in tims and their subsequent conduct shows that the meeting had their implied approval.

II. On the Basis of Business to be Discussed :

It can be classified into three parts:

1. Notice for Ordinary Business : The notice issued for a meeting, in which ordinary business matters are discussed, is called Notice for Ordinary Business.

The ordinary business is concerned with the following:

(i) The consideration of accounts, balance sheet and the report of the board of directors and auditors.

(ii) The declaration of divided.

(iii) The appointment of directors in place of those retiring.

(iv) The appointment and fixation of remuneration of auditors.

The notice for such business must contain a statement of the nature of business to be transacted  in the meeting.

2. Notice for Special Business : When in an annual general meeting some business is to be transacted which is other than the ordinary business trans-acted at the Annual General Meeting, Statutory Meeting and Extraordinary General Meeting, the notice must contain an explanatory statement along with it. Such a notice is called Notice for Special Business. Such an explanatory statement must contain all the material facts concerning each such item of business particularly the nature of the concern or interest, if any, of any director and the manager.

The Explanatory Statement attached with the notice contains the following information:

(i) The nature of concern or interest, if any, therein of any director and manager (in such special business).

(ii) The extent of shareholding interest in other company of every director and manager of the company, if such interest is not less than 20 percent of the affects such other company.

(iii) If such business relates to approve any document in the meeting, time and place, where such document can be inspected.

The purpose of the statement is to enable the members to understand and to make up their mind whether to go to attend and vote at the meeting or

sppreciate the nature of the business proposed to be considered at the meeting abstain from it.

If members are not fully disclosed the facts upon which they are asked to vote, the resolution passed at the meeting will be invalid.

3. Special Notice : There are some resolutions which require a Special Notice to be issued. It is required in the following cases :

(i) For the appointment of an auditor other than the retiring auditor.

(ii) For the express resolution that the retiring auditor will not be reappointed.

(iii) For removing a director before the expiry of his term.

(iv) For appointing another person as a director in place of the director removed.

The articles of a company may provide for additional matters in respect of which Special Notice is required.

In the above cases, the notice of intention to move the resolution shall be given to the company not less than fourteen (14) days before the meeting. The  company, after receiving the notice, must immediately give its members the notice of proposed resolution in the ame manner as it gives the notice of any meeting. If that is not practicable, the company must give notice either by advertisement in a local newspaper or in any other mode allowed by the article at least seven (7) days before the meeting.

 The resolution requiring Special Notice is not an independent resolution by itself. It may be an ordinary resolution or a special resolution.

 

Notice to Whom

Notice of every meeting must be given to the following persons :

1. Every member of the company.

2. Ever person entitled to share in consequence of death or insolvency of a member.

3. Auditor(s) of the company.

4. Public trustees.

5. If a share is held jointly by more than one person, notice may be served on the joint holder named first in the register of members.

6. When the heirs of a deceased member do not give their address, notice is served on the address of the deceased member.

Intentional omission to give notice of the meeting to the member(s) will make the meeting invalid, but an accidental omission to give notice or intentional or  accidental non-receipt by any member does not invalidate the proceedings at the meeting. Omission to give notice on the mistaken ground that the

member has ceased to be a shareholder because he had executed a transfer deed, cannot be said to be accidental. Hence, the proceedings of the meeting are assumed to be invalid.

Notice in case of Adjourned Meeting : An adjourned meeting is a continuation of the original meeting. So, a fresh notice is not required to be issued unless the articles contain such a provision. If the meeting is adjourned without fixing a day for holding the adjourned meeting or if fresh business other than such business as is left uncompleted at the original meeting, is to be discussed, a fresh notice of adjourned meeting must be given. When a meeting is adjourned for thirty (30) days or more, the notice of the adjourned meeting shall be given as in case of original meeting.

Service of Notice: The notice may be served personally or sent through post to the registered address of the members and, in the absence of any registered office in India, to the address, if there be any, within India furnished by him to the company

for the purpose of serving notice to him. Service through post shall be deemed to have been effected by correctly addressing, preparing and posting the notice.

Where a person refuses to accept notice served by registered post, under lection 27 of the General Clauses Act, such tender of the registered cover and his refusal to accept the same is valid service, in accordance with law.

Where the addressee denies service of notice and disputes the despatch, it is for the company to prove by proper evidence that the notice had been properly  despatched under certificate of posting.

Contents of Notice : Every notice of a company must specify the place, day and hour of the meeting.

Where special business is to be transacted, there must be appended to the notice an explanatory statement containing material facts concerning such business, particularly the nature of interest, if any, of directors and manager in the business.

If the meeting is to accord approval to a document, the explanatory statement must also state the time and place where that document can be inspected.

[Section 173(3)]

Where the resolution is to be passed as a special resolution', the intention to propose the resolution as such must also be stated in the notice.

[Section 189(2)(a)]

In the case of companies having share capital, the notice should also state with reasonable prominence that 'a member entitled to attend and vote is entitled to appoint a proxy  himself and the proxy need  not a member'[Section 176(2)].This must appear in the body of the notice before the signature of the authorised person.

A notice must clearly specify the business which is to be transacted at the meeting to which the notice relates, otherwise the notice would be bad. It should

make a full and frank disclosure to the shareholders of the fact, on which they would be expected to vote. [Tiessien vs. Henderson(1889) 1 Ch. 86]

Notice is different from Public Notice. A public notice is issued to inform the public at large to discharge their legal obligation in some cases like termination of services of an employee to warn the public against any dealings with him; merger of companies etc. Notice is issued to the members of the Company to convene a meeting and to discuss a particular business in it.