Calling an EGM on member requisition (s.100): the 10% route, the 21/45-day clock, and the Tribunal backstop

The board will not call a meeting. The majority directors refuse to convene, and wait for the minority to give up. Section 100 of the Companies Act 2013 exists for this stalemate. Members holding one-tenth of the voting capital can requisition (formally demand) an extraordinary general meeting, called an EGM. If the board does not act within the statutory period, the members who made the demand (the requisitionists) can call and hold the meeting themselves. The company reimburses their reasonable expenses out of the remuneration of the directors in default. Section 98 gives the Tribunal power to order a meeting where calling one is impracticable.

Legal basis: Companies Act 2013, ss.98-100 — Effective: ongoing.

What to do now

Next step: if you are a requisitionist, put the matters in writing, have every requisitionist sign, and send the requisition to the registered office. Section 100(3): the requisition "shall set out the matters for the consideration of which the meeting is to be called and shall be signed by the requisitionists and sent to the registered office of the company".
Deadline: the Board must, "within twenty-one days from the date of receipt of a valid requisition", proceed to call a meeting "on a day not later than forty-five days from the date of receipt". Otherwise the requisitionists may call and hold it "within a period of three months from the date of the requisition".
Consequence: if the Board defaults, the company reimburses the requisitionists' reasonable expenses and deducts the sums from the section 197 remuneration of the directors in default (s.100(6)).

Have a CA review your facts before you act or file.

---

The Board's own power and its India-location proviso

Section 100(1) starts with the ordinary case: "The Board may, whenever it deems fit, call an extraordinary general meeting of the company." Notice of a general meeting is governed by s.101, which provides for "not less than clear twenty-one days' notice either in writing or through electronic mode", subject to a shorter-notice proviso that needs the consents set out in the section.

The proviso to s.100(1) fixes the venue: "an extraordinary general meeting of the company, other than of the wholly owned subsidiary of a company incorporated outside India, shall be held at a place within India." So the exception covers a wholly owned subsidiary of a foreign-incorporated company; every other company holds its EGM in India.

The requisition: who qualifies, what it must say, where it goes

Section 100(2) says "The Board shall, at the requisition made by" qualifying members, "call an extraordinary general meeting of the company within the period specified in sub-section (4)". The thresholds are measured on the date of receipt of the requisition. For a company with share capital, the requisitionists must be members "who hold, on the date of the receipt of the requisition, not less than one-tenth of such of the paid-up share capital of the company as on that date carries the right of voting". For a company without share capital, they must have "not less than one-tenth of the total voting power of all the members having on the said date a right to vote".

Two points follow from the words. The measure is paid-up share capital, so count what has been paid up. And it is only that part of the capital which "carries the right of voting", so holdings that carry no vote do not count toward the tenth. Prepare a shareholding computation as at the date the requisition will be received.

Section 100(3) sets out what the requisition must contain: the matters for consideration, the signatures of the requisitionists, and delivery to the registered office. Section 100(4) speaks of "a valid requisition", so treat all three requirements as essential. Draft the requisition as a short notice: numbered matters, the proposed resolutions attached, every requisitionist's signature, and proof of delivery to the registered office.

The 21 and 45 day clock and the requisitionists' own meeting

Section 100(4) runs the timetable: "If the Board does not, within twenty-one days from the date of receipt of a valid requisition in regard to any matter, proceed to call a meeting for the consideration of that matter on a day not later than forty-five days from the date of receipt of such requisition, the meeting may be called and held by the requisitionists themselves within a period of three months from the date of the requisition."

Three periods follow from that text. The Board has twenty-one days from receipt to proceed to call a meeting. The meeting it calls must be on a day not later than forty-five days from receipt. If the Board does not do both, the requisitionists may call and hold the meeting themselves within three months from the date of the requisition. A Board that proceeds to call the meeting on day 20 but fixes the meeting for day 60 has not called it "on a day not later than forty-five days from the date of receipt", and the requisitionists' right arises. Note that the requirement is "in regard to any matter", so the test is applied matter by matter.

The requisitionists' meeting is subject to s.100(5): it "shall be called and held in the same manner in which the meeting is called and held by the Board". The general notice rule in s.101 therefore points to the clear twenty-one days' notice, unless the consents for shorter notice are obtained.

Section 100(6) deals with cost: "Any reasonable expenses incurred by the requisitionists in calling a meeting under sub-section (4) shall be reimbursed to the requisitionists by the company and the sums so paid shall be deducted from any fee or other remuneration under section 197 payable to such of the directors who were in default in calling the meeting." Keep every venue receipt, printing bill and dispatch proof, because the claim is for "reasonable expenses".

The Tribunal backstop: s.98 meetings and s.99 penalties

Section 98(1) applies "if for any reason it is impracticable to call a meeting of a company, other than an annual general meeting, in any manner in which meetings of the company may be called, or to hold or conduct the meeting of the company in the manner prescribed by this Act or the articles of the company". The Tribunal may then, "either suo motu or on the application of any director or member of the company who would be entitled to vote at the meeting", order a meeting "to be called, held and conducted in such manner as the Tribunal thinks fit", and give "such ancillary or consequential directions as the Tribunal thinks expedient, including directions modifying or supplementing in relation to the calling, holding and conducting of the meeting, the operation of the provisions of this Act or articles of the company". The proviso says these directions "may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting". Under s.98(2), a meeting held in accordance with the order is "deemed to be a meeting of the company duly called, held and conducted".

Section 98 excludes annual general meetings; for default in holding an AGM, s.97 gives the Tribunal a separate power on the application of any member.

Section 99 carries the penalty: where default is made in holding a meeting in accordance with section 96, 97 or 98 "or in complying with any directions of the Tribunal, the company and every officer of the company who is in default shall be punishable with fine which may extend to one lakh rupees and in the case of a continuing default, with a further fine which may extend to five thousand rupees for every day during which such default continues".

A worked scenario: the requisition the Board ignored

Three minority members together hold twelve per cent of the paid-up voting capital, all of it fully paid. They sign a requisition listing two matters and deliver it to the registered office, receipt acknowledged on 1 March. The Board meets on 15 March and resolves to consider the requisition later. Twenty-one days from 1 March is 22 March; nothing has been called by then. (Count from the date of receipt, and confirm the count for your own dates.) The requisitionists may now call the meeting themselves. They issue notice under the s.101 rule and hold the meeting on 10 April, inside the three-month period running from the requisition. They pass both resolutions and claim their documented venue, printing and dispatch costs, which the company reimburses under s.100(6) and deducts from the s.197 remuneration of the directors in default.

Now vary the facts. Suppose the Board had called a meeting for 20 April, which is fifty days after receipt. The Board proceeded to call within twenty-one days, but the day fixed is later than forty-five days (15 April) from receipt. Section 100(4) is not met on its words, and the requisitionists may call the meeting themselves. Every date in the chain should be provable from delivery receipts and Board minutes.

How the requisition file should read

A s.100 file has these layers: the shareholding computation proving one-tenth of the voting paid-up capital on the receipt date; the signed requisition with numbered matters and draft resolutions; proof of delivery to the registered office, fixing the date of receipt; a diary entry for day 21 recording Board action or inaction; the requisitionists' own notice pack; and the expense ledger for s.100(6). If the Board's conduct makes a meeting impracticable, the s.98 Tribunal route is the next step, and the draft application is best prepared in advance.

Frequently asked questions

What shareholding is needed to requisition an EGM?
For a company with share capital, members holding "not less than one-tenth of such of the paid-up share capital of the company as on that date carries the right of voting" (s.100(2)(a)). For a company without share capital, one-tenth of the total voting power (s.100(2)(b)). Both are measured on the date of receipt of the requisition.

Where must the requisition be sent?
To "the registered office of the company", signed by the requisitionists and setting out the matters for consideration (s.100(3)).

How long does the Board get to act?
Twenty-one days from receipt to proceed to call a meeting, for a day not later than forty-five days from receipt (s.100(4)). If it does not, the requisitionists may call and hold the meeting within three months from the date of the requisition.

Is a requisitionists' meeting called differently from a Board meeting?
No. It "shall be called and held in the same manner in which the meeting is called and held by the Board" (s.100(5)).

Who pays for the requisitionists' meeting?
The company reimburses "any reasonable expenses", recovered by deduction from the s.197 remuneration of the directors in default (s.100(6)).

Can an Indian company's EGM be held abroad?
Only a wholly owned subsidiary of a company incorporated outside India is excepted from the rule that the EGM "shall be held at a place within India" (s.100(1) proviso).

What if it is impracticable to hold a meeting at all?
The Tribunal may order one on the application of a director or member entitled to vote, may direct that one member present in person or by proxy constitutes a meeting, and the meeting is deemed duly held (s.98). Default carries the fines in s.99.

---

Next steps on annual compliance

See what applies to your company, then check it with a free tool.

Run a free compliance check →Compliance Health Check