Section 111 of CA 2013 : Section 111: Circulation Of Members? Resolution

Explanation using Example

Imagine a scenario where a group of shareholders in ABC Ltd. are concerned about the company's environmental policies. They want the company to adopt more sustainable practices and decide to use their rights under Section 111 of The Companies Act, 2013 to bring up a resolution at the upcoming Annual General Meeting (AGM).

The shareholders ensure they meet the required number as per Section 100, and they write a requisition to ABC Ltd. asking the company to include a resolution in the AGM notice that proposes the adoption of new sustainability measures.

They deposit the requisition at the registered office of ABC Ltd. along with a reasonable sum to cover the company's expenses for circulating their resolution. They do this six weeks before the AGM to meet the time requirements outlined in Section 111(2)(a)(i).

As per Section 111, ABC Ltd. is now obliged to give notice of this resolution to all its members and circulate the statement provided by the shareholders explaining the proposed resolution.

If ABC Ltd. fails to comply with this obligation without a valid reason, such as the resolution being defamatory (as per Section 111(3)), the company and its officers could be liable to a penalty as stated in Section 111(5).