Vacation of Office and Removal of

Directors

Vacation of Office of Director

(Sec.167)

The office of a Director shall become vacant if he

acquires any disqualification under Sec. 164 namely,
he fails to obtain the share qualification as per the
Articles of the Company
he is adjudged to be of unsound mind
he applies to be or has been adjudged an insolvent
he is convicted by a court for moral turpitude or
otherwise and sentenced with imprisonment for not less
than 6 months and a period of five years has not elapsed
He is convicted of any offence with imprisonment for 7 or
more years

contd...
he absents from all the meetings of the BOD held during a period of
12 months with or without leave of the Board
he acts in contravention of any provision under Sec.184 relating to
disclosure of interest in contracts with the company
he is disqualified by the order of a court or tribunal
he is removed in pursuance of the provisions of the Act.
he ceases to be in the position of the office in the holding, subsidiary
or associate company by virtue of which he was appointed a director
In case a director functions even after knowing that his office has
become vacant due to any of the disqualifications he shall be
punishable with imprisonment which may extend to one year or with
fine which shall not be less than 1 lakh which may extend to five lakh
rupees or both.

Vacation by Resignation of Director

Sec.168 deals with resignation of Director. A director
may resign from his office by giving a notice in writing
and the Board shall take note of the same and inform the
Registrar. The Board shall lay the fact before the next
general meeting.
The director shall forward a copy of his resignation with
reasons of his resignation within 30 days to the
Registrar.
He is liable for the offences during his tenure.
If all the directors resign the promoter or in his absence
the Central Govt. shall appoint required number of
directors who will hold office till the directors are
appointed in the company in general meeting.

Removal of Director
A company ( share holders) may by an
ordinary resolution remove a director
except a director appointed by the Tribunal
on the ground of oppression or
mismanagement to safeguard the public
interest

Meetings and Proceedings

Statutory Meeting

First meeting of the members of the company after it

commences business.
Held once in the lifetime of the company.
This Meeting is not applicable to a private company.
The following companies are required to hold the
statutory meeting:
Every public company limited by shares.
Every company limited by guarantee and having a
share capital.

CONTD
To be held between 1 to 6 months from the date of
commencement of business
The statutory report is to be forwarded 21 days before the
meeting.
The Board of Directors shall forward the report which
should include the following:
List of Members
Shares allotted and the amount received from
them
Particulars of the directors, managers and
secretary
Particulars of contracts that have to be approved
The detail of companys affairs along with fees and
brokerage paid.

ANNUAL GENERAL MEETING (AGM)

Sec. 95 provides: Every company other than a One
Person Company shall in each year hold in addition to
any other meetings a general meeting as its annual
general meeting (AGM) and shall specify the meeting as
such in the notices calling it.
Not more than fifteen months shall elapse between the
date of one annual general meeting of a company and
that of the next.
The first AGM of a company shall be held within a period
of nine months from the closing of the first financial year
and in any other case within a period of six months. This
period can be extended by the ROC by 3 months.

Contd..
Every AGM shall be called during business hours i.e. 9
am to 6 pm, on a day that is not a National Holiday (as
declared by the Central Govt), and shall be held either at
the registered office of the company or at some other
place within the city, town or village in which the
registered office of the company is situated. The Central
Govt may exempt a company from the above provisions

Contd
In the case of an AGM, all business to be transacted at
the meeting shall be deemed special, with the exception
of business relating to
the consideration of the accounts, balance sheet and
the reports of the Board of directors and auditors,
the declaration of a dividend,
the appointment of directors in the place of those
retiring, and
the appointment of and the fixing of the remuneration
of, the auditors

Contd..

Attached to every balance sheet laid before a company in general

meeting, a report by its Board of directors, with respect to
the state of affairs of the company;
the amounts, if any, which it proposes to carry to any reserves in
such balance sheet ;
the amount, if any, which it recommends should be paid by way
of dividend ;
material changes and commitments, if any, affecting the financial
position of the company
Three copies of balance sheet, etc., to be filed with registrar within
30 days of laying them at the AGM.

Extra Ordinary General Meeting

Statutory and Annual General Meetings are
ordinary meetings
Any meeting other than these are called EGM
for the purpose of transacting some urgent or
special business which cannot be postponed till
the next AGM
Board may call on its own : for issue of right
share, for increasing the remuneration of MD or
Whole-time director.
On requisition of the members

QUORUM
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.
Minimum 5 members to be present for
quorum up to 1000. It rise to 15 if more
than 1000 and up to 30 if more than 5000
members

Business to be transacted
Ordinary business:
1. Consideration of accounts, reports of Board of
Directors and auditors,
2. Declaration of Dividend
3. Appointment of directors in place of retiring directors
4. Appointing auditors and their remuneration

Special business: 1. Removal of director 2. Issue of

rights/bonus shares 3. Election of a person as a director.

Minutes of the Meetings

1.a)Every company shall cause minutes of all proceedings of every

general meeting and of all proceedings of every meeting of its Board
of directors or of every committee of the Board, to be kept by
making within thirty days of the conclusion of every such meeting
concerned, entries thereof in books kept for that purpose with their
pages consecutively numbered.
(b) Each page of every such book shall be initialled or signed and
the last page of the record of proceedings of each meeting in such
books shall be dated and signed
(c) In no case the minutes of proceedings of a meeting shall be
attached to any such book as aforesaid by pasting or otherwise.
(2) The minutes of each meeting shall contain a fair and correct
summary of the proceedings.
(3) All appointments of officers made at any of the meetings
aforesaid shall be included in the minutes of the meeting.

Contd
(4) In the case of a meeting of the Board of
directors or of a committee of the Board,
the minutes shall also contain
(a) the names of the directors present at the
meeting ; and
(b) in the case of each resolution passed at
the meeting, the names of the directors, if
any, dissenting from, or not concurring in,
the resolution.

Ordinary Resolution
Resolution shall be an Ordinary
resolution:
At a general meeting the Votes Cast in
Favor of the Resolution ( by members
through their Presence or Proxies )
exceed the votes cast Against the
Resolution by members

Special Resolution
Resolution shall be Special when:
Intention to propose the resolution as a
special resolution will be specified in
the notice calling the general meeting
Notice required under this Act has been
duly given of the general meeting
Votes cast in favor of the resolution are
not less than three times the number of
the votes cast against the resolution

WINDING UP

Winding up
270. (1) The winding up of a company
may be either
(a) by the Tribunal; or
(b) voluntary.

By the Tribunal
Sec. 271: (1) A company may, on a petition
under section 272, be wound up by the Tribunal,

(a) if the company is unable to pay its debts;

(b) if the company has, by special resolution,
resolved that the company be wound up by the
Tribunal;
(c) if the company has acted against the
interests of the sovereignty and integrity of India,
the security of the State, friendly relations with
foreign States, public order, decency or morality;

Contd
(d) if the Tribunal has ordered the winding up of
the company under Chapter XIX;
(e) If the Tribunal is of the opinion that the affairs
of the company have been conducted in a
fraudulent manner or the company was formed
for fraudulent and unlawful purpose or the
persons concerned in the formation or
management of its affairs have been guilty of
fraud, misfeasance or misconduct in connection
therewith and that it is proper that the company
be wound up;

Contd
(f) if the company has made a default in
filing with the Registrar its financial
statements or annual returns for
immediately preceding five consecutive
financial years; or
(g) if the Tribunal is of the opinion that it is
just and equitable that the company
should be wound up.

Voluntary Winding up
It means winding up by the members or
creditors of a company without
interference by the Tribunal
By passing an ordinary resolution: if the
Articles of the company provides
By passing a special resolution

Appointment of Liquidator
The co in its general meeting shall appoint
one or more liquidators to handle the
affairs of itsaffairs and distributing its
assets. It shall fix the remuneration of
liquidators. The ROC is to be informed
Ceasing of the Boards power
The creditors may go for winding up by
holding meeting and appointing liqudator.