Explanatory statement disclosure must include all material facts for special business resolutions or it will not meet legal requirements. Section 173(2) mandates an explanatory statement attaching material facts for each item of special business to meeting notices. Managements have omitted key particulars-such as remuneration quantum, proposed appointees' qualifications and experience, and necessity of appointment-or merely made those documents available for inspection, rather than fully disclosing them in the explanatory statement. The Company Law Board views such incomplete disclosure as non compliant with the statute and contrary to sound company practice.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Explanatory statement disclosure must include all material facts for special business resolutions or it will not meet legal requirements.
Section 173(2) mandates an explanatory statement attaching material facts for each item of special business to meeting notices. Managements have omitted key particulars-such as remuneration quantum, proposed appointees' qualifications and experience, and necessity of appointment-or merely made those documents available for inspection, rather than fully disclosing them in the explanatory statement. The Company Law Board views such incomplete disclosure as non compliant with the statute and contrary to sound company practice.
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