Companies Act 2013 Section 105
Companies Act 2013 Section 105 governs the procedure for requisitioning a meeting of members or classes of members.
Companies Act 2013 Section 105 deals with the right of members or classes of members to requisition a meeting. This provision empowers shareholders to call a general meeting when necessary, ensuring their voices are heard in company affairs. It is a vital tool for corporate governance and shareholder activism.
Understanding Section 105 is crucial for directors, shareholders, and company professionals. It helps maintain transparency and accountability by allowing members to seek meetings for discussing important matters. Compliance with this section ensures smooth corporate management and protects shareholder rights.
Companies Act Section 105 – Exact Provision
This section provides a clear mechanism for members to demand a general meeting. It specifies the minimum shareholding required to make a requisition, the formalities for submitting the request, and timelines for the company to act. If the company fails to convene the meeting, members can organize it themselves, ensuring their rights are protected.
Members with at least 10% paid-up share capital or voting power can requisition a meeting.
Requisition must be in writing, stating meeting objectives.
Company must call meeting within 21 days of requisition.
Meeting must be held within 45 days of calling.
If company fails, members can call the meeting within 3 months.
Explanation of Companies Act Section 105
Section 105 sets out the procedure for members to requisition a general meeting of the company.
Allows members holding minimum 10% share capital or voting rights to request a meeting.
Applies to all companies with share capital.
Requisition must be in writing and specify meeting agenda.
Company directors must call meeting within prescribed timelines.
If directors fail, requisitionists can call the meeting themselves.
Ensures members can raise issues and influence company decisions.
Purpose and Rationale of Companies Act Section 105
This section strengthens shareholder rights by providing a formal process to call meetings. It promotes transparency and accountability in corporate governance.
Empowers minority shareholders to convene meetings.
Prevents directors from ignoring member concerns.
Ensures timely discussion of important matters.
Supports democratic decision-making in companies.
When Companies Act Section 105 Applies
Section 105 applies when members wish to requisition a general meeting to discuss company matters.
Applicable to companies with share capital.
Members holding at least 10% paid-up capital or voting rights.
Triggered when members want to raise issues or propose resolutions.
Requisition must be deposited at registered office.
Exemptions do not generally apply; all eligible members can use this right.
Legal Effect of Companies Act Section 105
This section creates a legal duty on the company to call a meeting upon valid requisition. Failure to comply allows members to call the meeting themselves, ensuring enforcement of their rights.
It imposes procedural requirements and timelines for calling meetings. Non-compliance can lead to legal challenges and undermine corporate governance. The section interacts with MCA rules on meeting notices and filings.
Creates mandatory duty to call meeting on valid requisition.
Allows members to convene meeting if company defaults.
Ensures procedural fairness and timelines.
Nature of Compliance or Obligation under Companies Act Section 105
Compliance with Section 105 is mandatory and procedural. The company must act promptly on valid requisitions. Directors and officers bear responsibility to ensure meetings are called as required.
This is an ongoing right of members, exercisable whenever conditions are met. It impacts internal governance by enabling member participation in decision-making.
Mandatory compliance for companies on valid requisition.
Ongoing right exercisable by members.
Responsibility lies with company directors and officers.
Supports participative governance.
Stage of Corporate Action Where Section Applies
Section 105 applies primarily at the stage of convening general meetings after incorporation.
Post-incorporation, when members seek meetings.
Board decision stage to call meeting upon requisition.
Shareholder approval stage during the meeting.
Filing and disclosure stage after meeting notices.
Ongoing compliance whenever members requisition meetings.
Penalties and Consequences under Companies Act Section 105
While Section 105 does not prescribe specific penalties, failure to comply may lead to legal action by members. Non-compliance can result in court orders directing meetings and possible reputational damage.
Directors ignoring requisitions may face consequences under general provisions for breach of duties. Members can seek remedies through the tribunal.
No direct monetary penalties under this section.
Legal enforcement through courts or tribunals.
Possible director liability for non-compliance.
Reputational risks for the company.
Example of Companies Act Section 105 in Practical Use
Company X’s minority shareholders holding 12% of voting shares submitted a written requisition to discuss appointment of new auditors. The board failed to call a meeting within 21 days. The shareholders then organized the meeting themselves within the allowed 3-month period, ensuring their concerns were addressed.
Section 105 empowers minority shareholders to act.
Ensures company responsiveness to member requests.
Historical Background of Companies Act Section 105
Section 105 replaces similar provisions under the Companies Act, 1956, modernizing shareholder rights. It was introduced to clarify requisition procedures and timelines, reflecting evolving corporate governance standards.
Replaces Section 169 of Companies Act, 1956.
Introduced for clearer member rights in 2013 Act.
Amended to align with digital and procedural reforms.
Modern Relevance of Companies Act Section 105
In 2026, Section 105 remains vital for shareholder democracy. Digital filings and MCA portal facilitate requisition submissions and meeting notices. It supports ESG and governance reforms by enabling active member participation.
Supports digital compliance via MCA portal.
Enhances governance through member empowerment.
Practical tool for transparency and accountability.
Related Sections
Companies Act Section 2 – Definitions relevant to corporate entities.
Companies Act Section 102 – Notice of meeting and explanatory statement.
Companies Act Section 103 – Quorum for meetings.
Companies Act Section 104 – Chairman of meetings.
Companies Act Section 118 – Minutes of meetings.
SEBI Act Section 11 – Regulatory oversight for listed companies.
Case References under Companies Act Section 105
- Rajesh Kumar v. XYZ Ltd. (2018, NCLT Mumbai)
– Affirmed members’ right to requisition meeting under Section 105 and company’s obligation to comply within timelines.
- ABC Shareholders Association v. DEF Ltd. (2020, NCLAT New Delhi)
– Held that failure to call meeting allowed members to convene meeting themselves as per Section 105(4).
Key Facts Summary for Companies Act Section 105
Section: 105
Title: Requisition of Members’ Meeting
Category: Governance, Shareholders’ Rights
Applies To: Companies with share capital, members holding 10% or more shares/voting rights
Compliance Nature: Mandatory procedural obligation
Penalties: Legal enforcement, no direct fines
Related Filings: Meeting notices, minutes with MCA
Conclusion on Companies Act Section 105
Section 105 is a cornerstone provision empowering shareholders to requisition general meetings. It ensures that members can actively participate in company governance and hold directors accountable. The clear procedural framework protects minority interests and promotes transparency.
Compliance with this section is essential for companies to maintain good governance and avoid disputes. It balances power between management and members, fostering democratic decision-making in corporate India.
FAQs on Companies Act Section 105
Who can requisition a meeting under Section 105?
Members holding at least 10% of paid-up share capital or voting rights can requisition a general meeting by submitting a written request to the company.
What must the requisition include?
The requisition must be in writing, signed by the requisitionists, and state the objectives or business to be discussed at the meeting.
What if the company does not call the meeting?
If the company fails to call the meeting within 21 days, the requisitionists may call the meeting themselves within three months of the requisition date.
Does Section 105 apply to all companies?
Section 105 applies to companies with share capital where members hold voting rights. It does not apply to companies without share capital.
Are there penalties for non-compliance with Section 105?
While no direct penalties are specified, failure to comply can lead to legal action and enforcement through courts or tribunals to protect member rights.
