Companies Act Section 111 — Circulation of members’ resolution
CHAPTER VII MANAGEMENT AND ADMINISTRATION
Commercial / Corporate
Summary
Sub-section (1) requires a company, when asked in writing by the number of members specified in section 100, to do two things: give notice to members of any resolution that can properly be moved and is intended to be moved at a meeting, and circulate to members any statement about the matters in the proposed resolution or business to be dealt with at that meeting.
Sub-section (2) says the company does not have to give notice of a resolution or circulate a statement unless two conditions are met. First, a signed copy of the requisition (or multiple copies that together contain all the required signatures) must be deposited at the company's registered office. For a requisition asking for notice of a resolution, this must be done at least six weeks before the meeting. For any other requisition, it must be done at least two weeks before the meeting. Second, a sum reasonably sufficient to cover the company's expenses in acting on the requisition must be deposited or tendered along with it.
The proviso to sub-section (2) adds that if, after a copy of a requisition requiring notice of a resolution is deposited, an annual general meeting is called within six weeks of that deposit, the copy is treated as properly deposited even though it was not deposited within the usual time limit.
Sub-section (3) states that the company does not have to circulate a statement under clause (b) of sub-section (1) if the Central Government, on an application by the company or any other person claiming to be aggrieved, declares by order that the rights under this section are being abused to secure needless publicity for defamatory matter.
Sub-section (4) allows an order made under sub-section (3) to also direct that the costs incurred by the company under this section be paid to the company by the requisitionists, even if the requisitionists are not parties to the application.
Sub-section (5) provides that if there is any default in complying with this section, the company and every officer of the company who is in default will be liable to a penalty of twenty-five thousand rupees.
Official Text
(1) 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 proposed resolution or business to be dealt with at that meeting.
(2) A company shall not be bound under this section to give notice of any resolution or to circulate any statement unless—
(a) a copy of the requisition signed by the requisitionists (or two or more copies which, between them, contain the signatures of all the requisitionists) is deposited at the registered office of the company,—
(i) in the case of a requisition requiring notice of a resolution, not less than six weeks before the meeting;
(ii) in the case of any other requisition, not less than two weeks before the meeting; and
(b) there is deposited or tendered with the requisition, a sum reasonably sufficient to meet the company’s expenses in giving effect thereto:
Provided that if, after a copy of a requisition requiring notice of a resolution has been deposited at the registered office of the company, an annual general meeting is called on a date within six weeks after the copy has been deposited, the copy, although not deposited within the time required by this sub-section, shall be deemed to have been properly deposited for the purposes thereof.
(3) The company shall not be bound to circulate any statement as required by clause (b) of sub-section (1), if on the application either of the company or of any other person who claims to be aggrieved, the Central Government, by order, declares that the rights conferred by this section are being abused to secure needless publicity for defamatory matter.
(4) An order made under sub-section (3) may also direct that the cost incurred by the company by virtue of this section shall be paid to the company by the requisitionists, notwithstanding that they are not parties to the application.
(5) If any default is made in complying with the provisions of this section, the company and every officer of the company who is in default shall be liable to a penalty of twenty-five thousand rupees.