Circulation of Members' Resolutions, and Minutes

In one line

Members with enough support can force the company to circulate their own resolution and their reasons, and everything that happens at a meeting must be written into a minute book within thirty days, which is then evidence of what was done.

In exam wording: section 111 requires a company, on the requisition of the members specified in section 100, to give notice of a members' resolution and to circulate a statement about it; and section 118 requires minutes of every general meeting, every postal ballot resolution and every meeting of the Board and its committees to be prepared, signed and kept within thirty days, in books with consecutively numbered pages, and makes them evidence of the proceedings.

Why the law has this at all

Section 111 answers a simple unfairness. The Board controls the notice of a meeting. If a member wants to propose something the Board dislikes, the Board simply leaves it out, and the member arrives at the meeting with a proposal nobody has heard of and nobody has thought about. Section 111 makes the company circulate the member's resolution and his statement at his expense, so that the argument reaches the other members before they decide.

And it guards against the obvious abuse of that right, which is to use the company's circulation machinery to publish something defamatory. Hence section 111(3), which lets the Central Government stop it.

Section 118 answers a different problem: proof. A meeting is an event that leaves no trace. A year later nobody can say who attended, what was resolved, or whether the chairman declared a resolution carried. The minute book is the record, and the Act therefore controls when it is written, who signs it, what may be left out, and what it proves.

Some words this chapter uses

A requisition is a formal demand by members. To circulate is to send to all members. Needless publicity for defamatory matter is the ground in section 111(3). A minute book is the bound record of proceedings. Consecutively numbered pages prevent substitution of a page. Secretarial standards are the standards issued by the Institute of Company Secretaries of India.

Circulation of members' resolutions: section 111

Section 111(1): the duty. A company shall, on requisition in writing of such number of members as required in section 100:

• (a) give notice to members of any resolution which may properly be moved and is intended to be moved at a meeting; and
• (b) circulate to members any statement with respect to the matters referred to in the proposed resolution or business to be dealt with at that meeting.

The threshold is borrowed from section 100, so it is one-tenth of the paid-up capital carrying voting rights, or one-tenth of the total voting power where there is no share capital.