A number of members of any body sufficient to transact
business at a meeting is a quorum. Stated differently, a quorum is the minimum
number of persons whose presence is necessary for the transaction of business.
The quorum for meetings is generally fixed by the Articles of the company, or
bye-laws and the rules of the association or society. Any resolution passed without
a quorum is invalid. In fact, if no quorum is present, then there is no meeting
and the proceedings are invalid.
Section 174 provides that unless otherwise so provided in
the Articles, in the case of a public company, the quorum is five members
personally present and in the case of a private company, it is two members
personally present. If Quorum is not present within ½ hour, the meeting shall be
adjourned to the same day next week at the same time and place. The Board may
determine some other time, day and place but it should be within the town, city
or village of the registered office.
Quorum - certain typical issues
1. Can a
single member present constitutes a valid quorum? A single member
present cannot by himself constitute a valid quorum except where
the Act expressly so provides (vide Ss.167 and 186). Thus, where the meeting is
convened by CLB
u/s 167 or 186, it may give any directions including a
direction that a single member present in person or proxy shall constitute a
valid meeting.
2. Presence
of Preference Shareholders - whether to be counted for quorum. If business
proposed to be transacted at a general meeting does not include any item or resolution
proposed to be passed, which directly affect the rights of the preference shareholders,
their presence should not be taken into account for purpose of determining the
quorum, but where the subject matter includes any resolution in which the
rights of preference shareholders are directly affected, their presence should
be taken into account for the purpose of the quorum.
Chairman of the
meeting. The chairman is a necessary element of a meeting. His
position is of great importance. His many duties include the
following:
(i) He must
act at all times bona fide and in the interest of the company as a
whole.
(ii) He
must ensure that the meeting is properly convened and constituted.
(iii) He
must ensure that the provisions of the Act and the Articles are observed.
(iv) He should see that the business is taken in the order set out in the agenda, unless subsequently altered by the consent of the meeting.
(v) He
should ensure that the business is within the scope of the meeting.
(vi) He
must preserve order, conduct proceedings properly and take care that the sense
of the meeting is ascertained with regard to every question before it.
(vii) It is
his duty to see that the majority do not refuse to hear the minority; but when
the views of the minority have been heard, the chairman can with the sanction of
a vote of the meeting, declare the discussion closed and put the question to
vote.
(viii) He
must not permit any discussion until a motion or proposition is duly proposed
and seconded, nor must he permit any irrelevant discussion.
(ix) He must
exercise correctly his powers of adjournment and of demanding a poll.
(x) He must
exercise his casting vote bona fide in the interest of the company. This
casting vote is a second vote of the Chairman, to be used only when the voting for
and against the motion is equal. It is advisable to use the casting vote to
defeat
the motion.
(xi) The
chairman should always stand to address the meeting except in committees and
even there it is often desirable.
(xii) The
chairman should follow the appropriate procedure, however, small and friendly
the meeting is.
(xiii) The
chairman should ensure that the meeting begins punctually and closes formally.
(xiv)
The chairman should insist that all questions, comments and observations made
by any member must be addressed to the chairman and not directly to the speaker
or to anyone else in the meeting.(xv) The chairman should work in close contact with the secretary.
No comments:
Post a Comment