What is OBJECT OF QUORUM- companies act 2013 best cs book notes

Posted on 26-03-2016        By ADMIN

Whatis OBJECT OF QUORUM- companies act 2013 best cs book notes
The object of the quorum rule is to ensure that business which may be of firstrate importance shall be done neither irregularly nor by too small a number ofpersons who might, moreover, abuse their powers. In the case of shareholders,sometimes the numbers of shares as well as the holders themselves count in thedirection of quorum. So a specified number must, in this case, hold a certainamount of share capital of the Company before the quorum is made.

The purpose of having a quorum is to permit a stated proportion of themembership to transact the business of the body, recognising theimpracticability of securing the attendance of all the members at any of itsmeetings.

When no specific quorum is required by Statute or the regulations governing theparticular meeting, the common law rule is that in the absence of specialcustom, a major part of the members must be present at the meeting and of thatmajor part there must be a majority in favour of the act or resolution. This isobviously a wise and necessary precaution against inadequate representation,since all the members of an organised body are bound by the resolution of ameeting, even though they do not attend the meeting.

In case of companies, however, the growing practice of voting by proxy and of neglectingto attend the general meetings has resulted in a modification of the common lawrule regarding quorum. The quorum is usually fixed at a number much smallerthan the major part of the members.

For public meetings, there cannot be a fixed number to form a quorum, as thereis no limit set to the number of persons who may attend such meetings. It is,therefore, desirable that a fairly large number of persons should be presentbefore the proceedings are commenced.

Therefore, the basic and fundamental object of having a quorum is to permit astated proportion of the members to transact the business of the organisationor body, recognising the impracticability of securing the attendance of all themembers at any of its meetings.

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