Section 100 of the Companies Act, 2013: Why Companies Can’t Always Wait for the AGM

Not every business decision comes with the luxury of time. Anyone who has worked closely with companies knows this. Some issues need to be addressed immediately—waiting for the next Annual General Meeting just isn’t practical.

This is exactly why Extraordinary General Meetings, or EGMs, exist.

Section 100 of the Companies Act, 2013 gives companies a lawful way to take urgent shareholder approvals when time is not on their side. Whether it’s a sudden board change, a restructuring decision, or an approval that simply cannot wait, this section allows companies to act without being stuck in procedural limbo.

The law recognises a basic reality: businesses move faster than annual calendars. Section 100 exists to make sure governance doesn’t slow them down, while still protecting shareholder rights.

What Section 100 Actually Covers

At a practical level, Section 100 of the Companies Act, 2013 lays down the rules for calling an Extraordinary General Meeting. It tells us who can call an EGM, when it must be called, and what happens if the Board fails to act.

The section gives primary authority to the Board of Directors. If the Board believes shareholder approval is urgently required, it can call an EGM at any time.

But the law doesn’t stop there.

Section 100 also empowers shareholders. If members holding the prescribed voting power demand an EGM, the Board is legally required to respond. This prevents management from ignoring uncomfortable issues or brushing shareholder concerns under the carpet.

Board’s Authority to Call an Extraordinary General Meeting

The Board has wide discretion under Section 100. If directors feel a matter cannot wait until the AGM, they are free to call an EGM.

This could involve:

• approval of urgent transactions

• changes in directorship

• alteration of capital structure

• strategic or regulatory matters

This flexibility is important. It allows companies to remain responsive and decisive, especially during fast-moving situations.

That said, the Board’s power is not unchecked. The same section that gives authority also builds in accountability through shareholder rights.

When Shareholders Can Demand an EGM

One of the strongest features of Section 100 is the power it gives to members.

If shareholders holding at least one-tenth of the paid-up share capital or voting power submit a valid requisition, the Board has no choice. It must act.

This is not symbolic power. It is enforceable. Once a proper requisition is made, the company is legally bound to call the meeting.

The requisition must clearly mention the matters to be discussed. This keeps the process focused and prevents misuse of the EGM route.

Time Limits the Law Does Not Allow You to Ignore

Section 100 is very clear on timelines, and this is where many companies slip up.

Once a valid requisition is received:

• the Board must call the EGM within 21 days, and

• the meeting must be held within 45 days from the date of requisition

These deadlines exist for a reason. An Extraordinary General Meeting loses its meaning if it’s delayed endlessly.

The law forces urgency, and rightly so.

If the Board Does Nothing, Shareholders Can Step In

Section 100 assumes the possibility of non-cooperation. And it prepares for it.

If the Board fails to act within the prescribed period, the requisitioning shareholders can call the EGM themselves. They can also conduct it.

The company is required to reimburse the expenses incurred by the members for calling such a meeting.

This provision ensures that management cannot block shareholder-driven action by simply staying silent.

Who Attends and Votes in an EGM

An EGM follows the same participation rules as any other general meeting.

Shareholders can attend in person or through proxies. Authorised representatives may participate where applicable. Voting can happen by show of hands, poll, or electronic means, depending on the company and regulatory requirements.

For the resolutions passed in an EGM to be valid, proper notice, quorum, and procedural compliance are essential. This is where careful planning matters.

Notice Requirements Matter More Than People Think

Even though Section 100 focuses on the calling of an EGM, notice requirements cannot be ignored.

Members must receive clear notice of the meeting, along with the agenda. In urgent situations, shorter notice may be permitted, but only with the required consent.

Poorly drafted or defective notices are a common cause of disputes. A clear, legally compliant notice protects the company and avoids unnecessary litigation.

What Kind of Decisions Are Usually Taken in EGMs?

EGMs are not for routine business. They are used when decisions simply cannot wait.

Common examples include:

• alteration of Articles of Association

• issue of shares or securities

• appointment or removal of directors

• approval of major contracts or restructuring

These decisions often carry strategic or financial consequences, which is why immediate shareholder approval is necessary.

Why Section 100 Is So Important in Practice

Section 100 quietly balances power inside a company.

It allows Boards to act quickly when needed. At the same time, it ensures shareholders are not sidelined. Clear thresholds, fixed timelines, and legal remedies prevent abuse on either side.

In real-world governance, this balance is critical. Without it, urgent decisions could either be delayed or pushed through without accountability.

Where Companies Commonly Go Wrong

Most compliance issues under Section 100 are avoidable.

Companies often:

• miscalculate voting thresholds

• ignore statutory timelines

• issue defective notices

• wrongly assume the Board can reject a valid requisition

Any of these mistakes can invalidate the EGM and the resolutions passed at it. And once challenged, the consequences can be costly.

Closing Thoughts

Section 100 of the Companies Act, 2013 exists because businesses cannot always wait, but governance cannot be compromised either.

It provides a structured, lawful way to handle urgent decisions while protecting shareholder democracy. When used correctly, it keeps companies agile without crossing legal boundaries.

Understanding this section is not just about compliance. It’s about running a company responsibly.

👉 If you need help with calling an EGM, drafting compliant notices, or navigating Companies Act requirements, the team at Callmyca.com can handle it smoothly and correctly.