Statement to be annexed to notice

(1)

A statement setting out the following material facts concerning each item of special business to be transacted at a general meeting, shall be annexed to the notice calling such meeting, namely:—

(a)

the nature of concern or interest, financial or otherwise, if any, in respect of each items of—

(i)

every director and the manager, if any;

(ii)

every other key managerial personnel; and

(iii)

relatives of the persons mentioned in sub-clauses ( i ) and ( ii );

(b)

any other information and facts that may enable members to understand the meaning, scope and implications of the items of business and to take decision thereon.

(2)

For the purposes of sub-section (1),—

(a)

in the case of an annual general meeting, all business to be transacted thereat shall be deemed special, other than—

(i)

the consideration of financial statement and the reports of the Board of Directors and auditors;

(ii)

the declaration of any dividend;

(iii)

the appointment of directors in place of those retiring;

(iv)

the appointment of, and the fixing of the remuneration of, the auditors; and

(b)

in the case of any other meeting, all business shall be deemed to be special:

Proviso

Provided that where any item of special business to be transacted at a meeting of the company relates to or affects any other company, the extent of shareholding interest in that other company of every promoter, director, manager, if any, and of every other key managerial personnel of the first mentioned company shall, if the extent of such shareholding is not less than two per cent of the paid-up share capital of that company, also be set out in the statement.

(3)

Where any item of business refers to any document, which is to be considered at the meeting, the time and place where such document can be inspected shall be specified in the statement under sub-section (1).

(4)

Where as a result of the non-disclosure or insufficient disclosure in any statement referred to in sub-section (1), being made by a promoter, director, manager, if any, or other key managerial personnel, any benefit which accrues to such promoter, director, manager or other key managerial personnel or their relatives, either directly or indirectly, the promoter, director, manager or other key managerial personnel, as the case may be, shall hold such benefit in trust for the company, and shall, without prejudice to any other action being taken against him under this Act or under any other law for the time being in force, be liable to compensate the company to the extent of the benefit received by him.

(5)

Without prejudice to the provisions of sub-section (4), if any default is made in complying with the provisions of this section, every promoter, director, manager or other key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees or five times the amount of benefit accruing to the promoter, director, manager or other key managerial personnel or any of his relatives, whichever is higher.

(5)

If any default is made in complying with the provisions of this section, every promoter, director, manager or other key managerial personnel who is in default shall be punishable with fine which may extend to fifty thousand rupees or five times the amount of benefit accruing to the promoter, director, manager or other key managerial personnel or any of his relatives, whichever is more.

Notes, amendments & references (6)

This section shall apply to a private company and specified IFSC Public Companies unless otherwise specified in respective sections or the articles of the Company provide otherwise Notification no. G.S.R. 464(E) dated 5th June 2015 and GSR 08(E) dated 4th January, 2017 respectively.

(The exceptions, modifications and adaptations provided above shall be applicable only to those Private Companies which has not committed a default in filing its financial statements under section 137 of the said act or annual return under section 92 of the said act with the registrar, vide notification dated 13th June 2017)

To view the notification, Click Here

All Regional Directors and Registrar of Companies were instructed by MCA that all companies which have issued notices of general meeting on or after 12.9.2013, the statement to be annexed to the shall comply with additional requirements as prescribed in section 102 of the Act vide General Circular 15/2013 dated 13 September 2013. To view the clarification, Click Here

Explanation. – For the purposes of this Act, the term ‘start-up’ or “start-up company” means a private company incorporated under the Companies Act, 2013 (18 of 2013) or the Companies Act, 1956 (1 of 1956) and recognised as start-up in accordance with the notification issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry.

(5) Substituted vide the Companies (Amendment) Act, 2019 dated 31.07.2019 w.e.f., 02.11.2018. To view the Amendment Act, Click Here .