Chapter 7: Management and Administration - Test 2: answer key

Question 1 · 2 marks · Chapter 7: Management and Administration · medium

Scenario. Suryodaya Retail Ltd. was incorporated on 15th July 2023 with a paid-up capital of ₹2 crore. Its first financial year ended on 31st March 2024. The first Annual General Meeting (AGM) was convened on 28th December 2024. The second AGM was held on 30th September 2025. For the financial year 2025-26, the third AGM was proposed to be held on 15th May 2027. The Company Secretary, Mr. Rajat, advised the Board that since the third AGM would be held beyond the statutory time limit, the company should apply to the Registrar of Companies (RoC) for an extension of three months. The Board filed an application with the RoC on 10th October 2026, seeking an extension up to 31st March 2027. The RoC, however, rejected the application on 25th October 2026, citing that the extension cannot be granted beyond the maximum permissible limit. The Board is now considering holding the AGM on 31st December 2026 instead. Meanwhile, a member, Ms. Kavita, holding 8% of the paid-up capital, served a requisition on 1st November 2026 to the Board for calling an Extraordinary General Meeting (EGM) to discuss a matter of urgent importance. The Board did not respond to the requisition within 21 days. The company has 950 members. The Articles of Association do not provide for any extension of time for holding the AGM.

Whether the first AGM of Suryodaya Retail Ltd. was validly held on 28th December 2024?

1. Yes, because it was held within 9 months of the close of the first financial year. (correct answer)
2. No, because it should have been held within 6 months of the close of the first financial year.
3. Yes, because it was held within 15 months of incorporation.
4. No, because the first AGM must be held within 18 months of incorporation.

Answer: A — Yes, because it was held within 9 months of the close of the first financial year.

Explanation. Section 96(1) first proviso requires the first AGM to be held within 9 months from the close of the first financial year. The first financial year ended on 31.03.2024; 9 months later is 31.12.2024. The AGM on 28.12.2024 is within time. Option (b) applies to subsequent AGMs. Option (c) is incorrect because the 15-month gap rule applies between two AGMs, not for the first AGM. Option (d) is a wrong period.

Where it goes wrong. Confusing the 9-month limit for the first AGM with the 6-month limit for subsequent AGMs.

Authority. Section 96(1) of the Companies Act, 2013

Question 2 · 2 marks · Chapter 7: Management and Administration · hard

Can the RoC grant an extension to Suryodaya Retail Ltd. for holding its third AGM beyond 31st December 2026?

1. Yes, the RoC can extend up to 31st March 2027 as applied.
2. No, because the gap between the second and third AGM would exceed 15 months. (correct answer)
3. Yes, the RoC can extend by 3 months if the company passes a special resolution.
4. No, because the RoC can extend only the first AGM.

Answer: B — No, because the gap between the second and third AGM would exceed 15 months.

Explanation. The proviso to Section 96(1) allows the RoC to extend the time for holding an AGM (other than the first) by up to 3 months. However, the substantive requirement that the gap between two AGMs shall not exceed 15 months is absolute. The second AGM was on 30.09.2025; 15 months later is 30.12.2026. An extension beyond this would violate the 15-month rule. Hence, the RoC correctly rejected the application for extension up to 31.03.2027. Option (d) is incorrect because the RoC can extend subsequent AGMs.

Where it goes wrong. Assuming the RoC can extend the AGM date beyond the 15-month gap limit.

Authority. Section 96(1) of the Companies Act, 2013

Question 3 · 2 marks · Chapter 7: Management and Administration · hard

Was the requisition made by Ms. Kavita valid for calling an EGM?

1. Yes, because she holds more than 5% of the paid-up capital.
2. Yes, because any member can requisition an EGM.
3. No, because she holds less than 10% of the paid-up capital. (correct answer)
4. No, because she must hold at least 25% of the paid-up capital.

Answer: C — No, because she holds less than 10% of the paid-up capital.

Explanation. Section 100(2)(a) requires requisitionists to hold at least 1/10th (10%) of the paid-up share capital carrying voting rights. Ms. Kavita holds only 8%, which is below the threshold. Hence, the requisition is invalid. Options (a), (b), and (d) state incorrect thresholds.

Where it goes wrong. Incorrectly applying a 5% or any-member threshold for EGM requisition.

Authority. Section 100(2) of the Companies Act, 2013

Question 4 · 2 marks · Chapter 7: Management and Administration · medium

If the Board of Suryodaya Retail Ltd. fails to call the EGM on a valid requisition, within what time can the requisitionists themselves call the meeting?

1. Within 21 days from the date of requisition.
2. Within 45 days from the date of requisition.
3. Within 3 months from the date of requisition. (correct answer)
4. Within 6 months from the date of requisition.

Answer: C — Within 3 months from the date of requisition.

Explanation. Section 100(4) provides that if the Board fails to call the meeting within 21 days from the date of a valid requisition, the requisitionists may themselves call and hold the meeting within 3 months from the date of requisition. Option (a) is the Board's time to call; option (b) is the outer limit for holding the meeting by the Board. Option (d) is incorrect.

Where it goes wrong. Confusing the Board's 21-day/45-day timeline with the requisitionists' 3-month window.

Authority. Section 100(4) of the Companies Act, 2013

Question 5 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. Aadhya Pharma Ltd. is an unlisted public company with its registered office in Pune. Its paid-up equity share capital is ₹50,00,000 divided into 5,00,000 equity shares of ₹10 each. On 1st August 2025, a group of members holding 60,000 equity shares submitted a valid requisition to the Board for calling an Extraordinary General Meeting (EGM) to consider the removal of a director. The Board did not take any action on this requisition. Consequently, the requisitionists themselves called an EGM on 20th October 2025 at a hotel in Mumbai, which is 150 km from Pune. The meeting was held at 4:00 PM on a Tuesday. The company’s Articles of Association do not provide for a larger quorum. At the meeting, only 3 members were personally present. The Chairman declared the meeting invalid due to lack of quorum. The requisitionists argued that since the meeting was called by them, the quorum requirement does not apply. The company incurred expenses of ₹50,000 for this meeting, which the requisitionists now want to recover from the company. Meanwhile, the Board claims that the requisition itself was invalid because the members did not hold 10% of the paid-up capital. The company has 800 members.

Was the requisition submitted by the members on 1st August 2025 valid?

1. Yes, because they hold 12% of the paid-up capital, which is more than the required 10%. (correct answer)
2. No, because they must hold at least 25% of the paid-up capital.
3. Yes, because any 100 members can requisition an EGM.
4. No, because they must hold at least 50% of the paid-up capital.

Answer: A — Yes, because they hold 12% of the paid-up capital, which is more than the required 10%.

Explanation. Under Section 100(2)(a), members holding at least 1/10th (10%) of the paid-up capital can requisition an EGM. The members hold 60,000 out of 5,00,000 shares, i.e., 12%, which exceeds 10%. Hence, the requisition is valid. Options (b) and (d) state incorrect higher thresholds. Option (c) is incorrect as the requirement is based on capital, not number of members.

Where it goes wrong. Miscalculating 60,000/5,00,000 as 1.2% instead of 12%.

Authority. Section 100(2) of the Companies Act, 2013

Question 6 · 2 marks · Chapter 7: Management and Administration · hard

Was the EGM held on 20th October 2025 at Mumbai validly convened?

1. Yes, because the requisitionists can hold the meeting anywhere in India.
2. No, because the meeting was held in a city different from the registered office, and the quorum was not met. (correct answer)
3. Yes, because the Board failed to call the meeting within 21 days.
4. No, because the meeting was held beyond 45 days from the date of requisition.

Answer: B — No, because the meeting was held in a city different from the registered office, and the quorum was not met.

Explanation. Rule 17(2) requires requisitionists to convene the meeting at the registered office or in the same city/town where the registered office is situated. Mumbai is different from Pune, making the meeting invalid on this ground. Additionally, the quorum for a public company with up to 1,000 members is 5 members personally present; only 3 were present, so quorum was not met. Option (d) is incorrect because requisitionists have 3 months, not 45 days.

Where it goes wrong. Assuming requisitionists can hold the meeting anywhere, or that quorum rules do not apply to requisitionists' meetings.

Authority. Rule 17(2) of the Companies (Management and Administration) Rules, 2014; Section 103 of the Companies Act, 2013

Question 7 · 2 marks · Chapter 7: Management and Administration · hard

Can the requisitionists recover the expenses of ₹50,000 from the company?

1. Yes, and the company can deduct the amount from the remuneration of the directors who failed to call the meeting. (correct answer)
2. No, because the meeting was invalid.
3. Yes, but only if the meeting was valid and passed a resolution.
4. No, because the requisitionists must bear their own expenses.

Answer: A — Yes, and the company can deduct the amount from the remuneration of the directors who failed to call the meeting.

Explanation. Section 100(6) provides that reasonable expenses incurred by requisitionists in calling a meeting under Section 100(4) shall be reimbursed by the company and deducted from any fee or remuneration payable to the directors who were in default in calling the meeting. The validity of the meeting does not affect this right. Option (b) is incorrect; option (c) adds an unnecessary condition; option (d) is contrary to the statute.

Where it goes wrong. Thinking that an invalid meeting defeats the requisitionists' right to reimbursement.

Authority. Section 100(6) of the Companies Act, 2013

Question 8 · 2 marks · Chapter 7: Management and Administration · medium

What is the correct quorum for the EGM of Aadhya Pharma Ltd.?

1. 2 members personally present.
2. 30 members personally present.
3. 15 members personally present.
4. 5 members personally present. (correct answer)

Answer: D — 5 members personally present.

Explanation. Section 103(1)(a) prescribes a quorum of 5 members personally present for a public company with not more than 1,000 members. Aadhya Pharma has 800 members, so the quorum is 5. Option (a) is for private companies; options (b) and (c) apply to higher member brackets.

Where it goes wrong. Applying the private company quorum (2) or the quorum for companies with more than 1,000 members (15).

Authority. Section 103(1) of the Companies Act, 2013

Question 9 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. Zenith Agro Tech Ltd. is an unlisted public company with its registered office in Mumbai. The company has 6,000 members. The Board of Directors scheduled the Annual General Meeting (AGM) for the financial year 2024-25 on 2nd October 2025 at 7:00 PM at a luxury resort in Goa. The notice was sent to all members on 5th September 2025. The company’s Articles of Association do not contain any provision for holding meetings outside Mumbai. A group of members holding 15% of the paid-up capital objected to the venue and time, arguing that the AGM must be held during business hours and within the city of the registered office. The company contended that since it is an unlisted company, it can hold the AGM anywhere in India if all members give consent. However, no consent was obtained from the members. The AGM was held as scheduled, and 40 members were personally present. The Chairman declared that the quorum was met and proceeded with the business. After the meeting, a member filed a complaint with the RoC alleging violation of Section 96. The company’s paid-up capital is ₹5 crore.

Was the AGM validly held on 2nd October 2025 at 7:00 PM in Goa?

1. Yes, because the company is an unlisted public company and can hold the AGM anywhere in India.
2. No, because 2nd October is a National Holiday and the meeting was held after business hours. (correct answer)
3. Yes, because the meeting was held within 6 months of the close of the financial year.
4. No, because the AGM must be held at the registered office only.

Answer: B — No, because 2nd October is a National Holiday and the meeting was held after business hours.

Explanation. Section 96(2) mandates that the AGM be held during business hours (9 a.m. to 6 p.m.) on a day that is not a National Holiday. 2nd October is a National Holiday, and 7:00 PM is outside business hours. Even for an unlisted company, holding the AGM outside the city requires the consent of all members, which was not obtained. Option (d) is incorrect because an AGM can be held elsewhere in the city or anywhere in India with consent.

Where it goes wrong. Assuming that unlisted companies have unrestricted freedom regarding the place and time of the AGM.

Authority. Section 96(2) of the Companies Act, 2013

Question 10 · 2 marks · Chapter 7: Management and Administration · hard

What is the quorum for the AGM of Zenith Agro Tech Ltd.?

1. 5 members personally present.
2. 15 members personally present.
3. 30 members personally present. (correct answer)
4. 2 members personally present.

Answer: C — 30 members personally present.

Explanation. Section 103(1)(c) provides that for a public company with more than 5,000 members, the quorum is 30 members personally present. Zenith Agro Tech has 6,000 members, so the quorum is 30. Options (a) and (b) apply to lower member brackets; option (d) is for private companies.

Where it goes wrong. Using the quorum for companies with up to 1,000 members (5) or up to 5,000 members (15) without checking the actual member count.

Authority. Section 103(1) of the Companies Act, 2013

Question 11 · 2 marks · Chapter 7: Management and Administration · medium

If the AGM had been held on a working day at 3:00 PM in Mumbai, but without obtaining the consent of all members for the place, would it be valid?

1. Yes, because Mumbai is the city where the registered office is situated. (correct answer)
2. No, because the AGM of an unlisted company must always be held at the registered office.
3. Yes, because the members can waive the requirement by attendance.
4. No, because the consent of at least 75% of members is required.

Answer: A — Yes, because Mumbai is the city where the registered office is situated.

Explanation. Section 96(2) requires the AGM to be held at the registered office or at some other place within the city, town, or village where the registered office is situated. Mumbai is the city of the registered office, so holding the meeting there is valid without the consent of all members. The consent of all members is required only if the meeting is held outside the city/town/village. Options (b), (c), and (d) are incorrect.

Where it goes wrong. Confusing the requirement of consent for holding the AGM outside the city with the general rule for holding it within the city.

Authority. Section 96(2) of the Companies Act, 2013

Question 12 · 2 marks · Chapter 7: Management and Administration · medium

If the company fails to hold the AGM as per Section 96, what is the penalty on the company under Section 99?

1. ₹50,000 and ₹1,000 per day for continuing default.
2. ₹25,000 and ₹500 per day for continuing default.
3. ₹1,00,000 and ₹5,000 per day for continuing default. (correct answer)
4. ₹10,000 and ₹100 per day for continuing default.

Answer: C — ₹1,00,000 and ₹5,000 per day for continuing default.

Explanation. Section 99 provides that if a company fails to hold the AGM in accordance with Section 96, the company and every officer in default shall be punishable with a fine which may extend to ₹1,00,000 and, in the case of a continuing default, with a further fine which may extend to ₹5,000 for every day during which the default continues. Option (c) correctly states the penalty. Other options are incorrect amounts.

Where it goes wrong. Confusing the penalty under Section 99 with penalties under other provisions of the Act.

Authority. Section 99 of the Companies Act, 2013

Question 13 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. Vayu Renewables Ltd. was incorporated on 1st October 2023. Its first financial year ended on 31st March 2024. The first AGM was held on 15th January 2025. The second AGM was held on 30th September 2025. For the financial year 2025-26, the third AGM was scheduled for 31st December 2026. The company applied to the RoC for an extension of three months to hold the third AGM, which was rejected. The company then held the third AGM on 31st December 2026. A member, Mr. Arun, challenged the validity of the first AGM, arguing that it was held beyond the statutory time limit. He also challenged the third AGM, claiming that the gap between the second and third AGM exceeded 15 months. The company contended that the first AGM was valid because it was held within 15 months of incorporation, and the third AGM was valid because the RoC had the power to extend the time. The company has 1,200 members. The Articles of Association do not provide for any extension. The company’s financial year 2025-26 ended on 31st March 2026.

Was the first AGM of Vayu Renewables Ltd. validly held on 15th January 2025?

1. Yes, because it was held within 15 months of incorporation.
2. No, because it was held beyond 9 months from the close of the first financial year. (correct answer)
3. Yes, because the RoC granted an extension for the first AGM.
4. No, because the first AGM must be held within 6 months of incorporation.

Answer: B — No, because it was held beyond 9 months from the close of the first financial year.

Explanation. Section 96(1) requires the first AGM to be held within 9 months from the close of the first financial year. The first financial year ended on 31.03.2024, so the first AGM was due by 31.12.2024. Holding it on 15.01.2025 is beyond the prescribed period. The RoC has no power to extend the first AGM. Option (a) is incorrect because the 15-month rule applies to the gap between AGMs, not the first AGM.

Where it goes wrong. Using the 15-month period from incorporation instead of the 9-month period from the close of the first financial year.

Authority. Section 96(1) of the Companies Act, 2013

Question 14 · 2 marks · Chapter 7: Management and Administration · hard

Was the third AGM of Vayu Renewables Ltd. validly held on 31st December 2026?

1. Yes, because the gap between the second and third AGM is exactly 15 months.
2. No, because the gap between the second and third AGM exceeds 15 months by one day. (correct answer)
3. Yes, because the RoC has the power to extend the time for holding the AGM.
4. No, because the third AGM must be held within 6 months of the close of the financial year.

Answer: B — No, because the gap between the second and third AGM exceeds 15 months by one day.

Explanation. Section 96(1) stipulates that the gap between two AGMs shall not exceed 15 months. The second AGM was held on 30.09.2025. Fifteen months from that date is 30.12.2026. The third AGM was held on 31.12.2026, exceeding the 15-month limit by one day. Hence, it is invalid. Option (c) is incorrect because the RoC's extension cannot override the 15-month cap. Option (d) is incorrect because the 6-month rule is subject to the 15-month cap.

Where it goes wrong. Miscalculating the 15-month period as ending on 31.12.2026 instead of 30.12.2026.

Authority. Section 96(1) of the Companies Act, 2013

Question 15 · 2 marks · Chapter 7: Management and Administration · hard

Can the RoC grant an extension of three months for holding the third AGM of Vayu Renewables Ltd.?

1. Yes, the RoC can extend the time by up to 3 months for any AGM other than the first. (correct answer)
2. No, because the company has already held its first AGM.
3. Yes, but only if the company passes a special resolution.
4. No, because the RoC cannot extend the time beyond the 15-month gap limit.

Answer: A — Yes, the RoC can extend the time by up to 3 months for any AGM other than the first.

Explanation. The proviso to Section 96(1) empowers the RoC to extend the time for holding any AGM (other than the first) by up to 3 months. However, this extension is subject to the overarching 15-month gap rule. The RoC does have the power to grant an extension, but in this case, the extension cannot validate a meeting held beyond 15 months. Option (a) correctly states the RoC's power. Option (b) is incorrect; option (c) adds a non-existent condition; option (d) is too broad because the RoC can extend within the 15-month limit.

Where it goes wrong. Thinking the RoC has no power to extend subsequent AGMs, or that the 15-month gap absolutely bars any extension.

Authority. Section 96(1) of the Companies Act, 2013

Question 16 · 2 marks · Chapter 7: Management and Administration · medium

What is the maximum period for which the RoC can extend the time for holding an AGM (other than the first AGM)?

1. 1 month
2. 2 months
3. 3 months (correct answer)
4. 6 months

Answer: C — 3 months

Explanation. The proviso to Section 96(1) expressly permits the RoC to extend the time for holding an AGM (other than the first) by a period not exceeding 3 months. Option (c) is correct. Other periods are not prescribed.

Where it goes wrong. Confusing the extension period with other statutory periods such as 1 month, 2 months, or 6 months.

Authority. Section 96(1) of the Companies Act, 2013

Question 17 · 2 marks · Chapter 7: Management and Administration · medium

Scenario. A company was incorporated on 15th November 2023. Its first financial year ended on 31st March 2024. By when must it hold its first AGM?

A company was incorporated on 15th November 2023. Its first financial year ended on 31st March 2024. By when must it hold its first AGM?

1. 31st March 2025
2. 15th February 2025
3. 31st December 2024 (correct answer)
4. 30th September 2024

Answer: C — 31st December 2024

Explanation. Section 96(1) first proviso: the first AGM must be held within 9 months from the close of the first financial year. The first financial year ended on 31.03.2024; 9 months later is 31.12.2024. Option (c) is correct. Option (a) is 12 months; option (b) is 10.5 months; option (d) is 6 months.

Where it goes wrong. Calculating 6 months from the close of the financial year instead of 9 months.

Authority. Section 96(1) of the Companies Act, 2013

Question 18 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. An AGM was held on 30th September 2024. By what date must the next AGM be held at the latest?

An AGM was held on 30th September 2024. By what date must the next AGM be held at the latest?

1. 30th December 2025 (correct answer)
2. 31st December 2025
3. 31st March 2026
4. 30th September 2025

Answer: A — 30th December 2025

Explanation. Section 96(1) provides that the gap between two AGMs shall not exceed 15 months. Fifteen months from 30.09.2024 is 30.12.2025. Therefore, the next AGM must be held on or before 30.12.2025. Option (a) is correct. Options (b), (c), and (d) exceed or fall short of the 15-month period.

Where it goes wrong. Adding 15 months incorrectly and arriving at 31.12.2025 instead of 30.12.2025.

Authority. Section 96(1) of the Companies Act, 2013

Question 19 · 2 marks · Chapter 7: Management and Administration · medium

Scenario. Can the RoC extend the time for holding the first AGM of a company?

Can the RoC extend the time for holding the first AGM of a company?

1. Yes, up to 3 months.
2. Yes, up to 6 months.
3. Yes, if the company passes a special resolution.
4. No, the RoC cannot extend the first AGM. (correct answer)

Answer: D — No, the RoC cannot extend the first AGM.

Explanation. The proviso to Section 96(1) expressly limits the RoC's power to extend the time for holding an AGM other than the first AGM. Therefore, the RoC has no power to extend the first AGM. Option (d) is correct. Options (a), (b), and (c) are incorrect.

Where it goes wrong. Assuming the RoC's 3-month extension power applies to all AGMs, including the first.

Authority. Section 96(1) of the Companies Act, 2013

Question 20 · 2 marks · Chapter 7: Management and Administration · medium

Scenario. An AGM was scheduled on 26th January 2025 (Republic Day) at 10:00 AM. Is the meeting valid?

An AGM was scheduled on 26th January 2025 (Republic Day) at 10:00 AM. Is the meeting valid?

1. Yes, because it is during business hours.
2. No, because it is a National Holiday. (correct answer)
3. No, because the AGM must be held at 9:00 AM.
4. Yes, because the members can waive the holiday requirement.

Answer: B — No, because it is a National Holiday.

Explanation. Section 96(2) requires the AGM to be held on a day that is not a National Holiday. 26th January is a National Holiday. Therefore, holding the AGM on that day is invalid, regardless of the time. Option (b) is correct. Option (a) ignores the holiday restriction; option (c) states an incorrect time; option (d) is not permitted.

Where it goes wrong. Focusing only on business hours and ignoring the prohibition on National Holidays.

Authority. Section 96(2) of the Companies Act, 2013

Question 21 · 2 marks · Chapter 7: Management and Administration · medium

Scenario. An AGM was scheduled at 7:00 PM on a working day. Is the meeting valid?

An AGM was scheduled at 7:00 PM on a working day. Is the meeting valid?

1. Yes, because the Articles can prescribe any time.
2. No, because it is outside business hours (9 a.m. to 6 p.m.). (correct answer)
3. No, because the AGM must be held at 11:00 AM.
4. Yes, because the members can consent to a later time.

Answer: B — No, because it is outside business hours (9 a.m. to 6 p.m.).

Explanation. Section 96(2) mandates that the AGM be called during business hours, i.e., between 9 a.m. and 6 p.m. A meeting at 7:00 PM is outside this window and is therefore invalid. Option (b) is correct. Option (a) is incorrect because the Act overrides the Articles; option (c) states an incorrect time; option (d) is not a valid exception.

Where it goes wrong. Assuming the Articles or member consent can override the statutory business hours.

Authority. Section 96(2) of the Companies Act, 2013

Question 22 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. An unlisted public company wants to hold its AGM in a city different from the city of its registered office. What is required to make this valid?

An unlisted public company wants to hold its AGM in a city different from the city of its registered office. What is required to make this valid?

1. Consent of all members in writing or by electronic mode in advance. (correct answer)
2. Consent of at least 75% of members.
3. Prior approval of the RoC.
4. Prior approval of the Tribunal.

Answer: A — Consent of all members in writing or by electronic mode in advance.

Explanation. The first proviso to Section 96(2) permits an unlisted company to hold its AGM at any place in India if the consent of all members is given in writing or by electronic mode in advance. Option (a) is correct. Options (b), (c), and (d) are not prescribed requirements.

Where it goes wrong. Applying a 75% majority requirement or assuming regulatory approval is needed.

Authority. Section 96(2) of the Companies Act, 2013

Question 23 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. Members holding 10% of the paid-up capital requisitioned an EGM on 1st June 2025. The Board issued the notice for the EGM on 25th June 2025 and held the meeting on 1st July 2025. Is the Board's action valid?

Members holding 10% of the paid-up capital requisitioned an EGM on 1st June 2025. The Board issued the notice for the EGM on 25th June 2025 and held the meeting on 1st July 2025. Is the Board's action valid?

1. Yes, because the meeting was held within 45 days.
2. Yes, because the Board can take up to 60 days.
3. No, because the Board must call the meeting within 30 days.
4. No, because the Board must proceed to call the meeting within 21 days. (correct answer)

Answer: D — No, because the Board must proceed to call the meeting within 21 days.

Explanation. Section 100(2) requires the Board to proceed to call the meeting within 21 days from the date of receipt of a valid requisition. The requisition was received on 01.06.2025; the 21-day period expired on 22.06.2025. The Board issued the notice on 25.06.2025, which is beyond 21 days. Hence, the Board's action is invalid. Option (d) is correct. Options (a) and (b) focus on the meeting date, but the default is in the calling process.

Where it goes wrong. Confusing the 45-day deadline for holding the meeting with the 21-day deadline for calling it.

Authority. Section 100(2) of the Companies Act, 2013

Question 24 · 2 marks · Chapter 7: Management and Administration · hard

Scenario. Requisitionists called an EGM on 1st September 2025 after the Board failed to call it. The requisition was made on 1st June 2025. Is the meeting valid?

Requisitionists called an EGM on 1st September 2025 after the Board failed to call it. The requisition was made on 1st June 2025. Is the meeting valid?

1. No, because it was held beyond 45 days from the date of requisition.
2. No, because it was held beyond 6 months from the date of requisition.
3. Yes, because it was held within 3 months from the date of requisition. (correct answer)
4. Yes, because the requisitionists can call the meeting at any time.

Answer: C — Yes, because it was held within 3 months from the date of requisition.

Explanation. Section 100(4) allows requisitionists to call and hold the meeting within 3 months from the date of requisition if the Board fails to call it. The requisition was on 01.06.2025; 3 months later is 01.09.2025. The meeting on 01.09.2025 is within the 3-month window. Option (c) is correct. Options (a) and (b) apply wrong timelines; option (d) is too broad.

Where it goes wrong. Applying the 45-day rule applicable to the Board to the requisitionists' meeting.

Authority. Section 100(4) of the Companies Act, 2013

Question 25 · 2 marks · Chapter 7: Management and Administration · medium

Scenario. What is the penalty on the company for default in holding the AGM under Section 96?

What is the penalty on the company for default in holding the AGM under Section 96?

1. ₹50,000 and ₹1,000 per day for continuing default.
2. ₹25,000 and ₹500 per day for continuing default.
3. ₹10,000 and ₹100 per day for continuing default.
4. ₹1,00,000 and ₹5,000 per day for continuing default. (correct answer)

Answer: D — ₹1,00,000 and ₹5,000 per day for continuing default.

Explanation. Section 99 provides that the company and every officer in default shall be punishable with a fine which may extend to ₹1,00,000 and, in the case of a continuing default, with a further fine which may extend to ₹5,000 for every day during which the default continues. Option (d) correctly states the penalty.

Where it goes wrong. Confusing the penalty under Section 99 with lower penalties under other provisions.

Authority. Section 99 of the Companies Act, 2013