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deeds query..

CA Paras jain (Audit Senior Assistant) (1544 Points)

29 March 2010

is writing Explanatery statements with notice of general meetings mandatory as i didnt found any in suggested answers??

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6 Replies

Raj Saxena (1412th Tiger) (Struggling Student) (272 Points)
Replied 29 March 2010

Every Buss transacted in a GM is considered to be Special Buss. And as per Sec 173 Every SB requires an Explanatory Sttement.

CA Paras jain (Audit Senior Assistant) (1544 Points)
Replied 29 March 2010

ya i knw about this sir but m nt clear about to write them in exams or not

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 29 March 2010

Dear Friend,

Kindly appreciate- the funda of Special or Ordinary business is that to judge whether a business is special or ordinary you must look in to the relevant section i.e. whether it is required to be passed by Special or ordinary resolution.

Whether a business is special or ordinary is not dependant on passing majority. To elaborate further only 4 business as mentioned in section 173 (1)(a) are ordinary business and rest all the businesses u/s 173(1)(b) are special businesses whether they are required to be passed by Special or ordinary resolution.

For example Alteration of Article is required to be passed by Special Resolution u/s 31 but it is an ordinary business.

Similarily appointment of auditor u/s 224 or approval of balance sheet in AGM u/s 209 by shareholders is to be done by ordinary resolution but still they are special business read with section 173.

So if a business is a special business than explanatory statement is required to be attached u/s 173 with the notice of general meeting. Likewise nothing is required to be attached with an ordinary business.

Best Regards

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 29 March 2010

For exam I’d like to suggest you one thing that mention the funda straight away to show your knowledge and mention the format with short explanatory note u/s 173.

That would be all to impress the examiner.