Resolutions Requiring Special Notice [Section 115 & Rule 23]
# Resolutions Requiring Special Notice [Section 115 read with Rule 23]
## 1. Meaning & Threshold for 'Special Notice'
Where any provision of the Act or the company's Articles requires a special notice for passing any resolution, the notice of intention to move such resolution shall be given to the company by:
Members holding not less than 1% of the total voting power, OR
Members holding shares on which an aggregate paid-up sum of ≤ ₹5,00,000 (as prescribed) has been paid up.
> Note: 'Special Notice' is the notice members give TO the company, distinct from the notice the company gives to members for the GM.
## 2. Cases Where Special Notice is Required
#
Resolution
Section
(a)
Appointment of an auditor other than the retiring auditor at an AGM
140(4)
(b)
Resolution providing that a retiring auditor shall NOT be re-appointed
140(4)
(c)
Removal of a director before expiry of term
169(2)
(d)
Appointment of another person as director in place of the removed director, at the same meeting
169(2)
The Articles may prescribe additional matters requiring special notice.
## 3. Procedure Under Rule 23
### Step 1 — Members → Company (Special Notice)
Signed by members (individually or collectively) holding ≥ 1% of total voting power OR shares on which ≥ ₹5,00,000 is paid up.
Sent to the company not earlier than 3 months but at least 14 days before the date of the meeting.
The day of giving notice and day of meeting are EXCLUDED while counting 14 days.
### Step 2 — Company → Members (Notice of Resolution)
Immediately after receiving the special notice, the company gives its members notice of the resolution at least 7 days before the meeting.
Day of dispatch and day of meeting are EXCLUDED.
Must be given in the same manner as notice of any general meeting.
### Step 3 — If Not Practicable to Notify Each Member
Publish the notice in:
An English newspaper (English language), AND
A vernacular newspaper (vernacular language),
Both having wide circulation in the State of registered office.
Also post on the company's website (if any).
Such publication must be at least 7 days before the meeting (excluding date of publication and date of meeting).
## 4. Timeline at a Glance
```
Members send Special Notice ──▶ Company
(≥14 days, ≤3 months before meeting)
│
▼
Company notifies members of resolution
(≥7 days before meeting)
│
▼
General Meeting
```
Worked example
### Example 1
Example 1 — Threshold met by votes: A listed company has total voting power of 1,00,00,000 votes. Members holding 1,10,000 votes (1.1%) send special notice for removal of a director. Answer: Valid — threshold of 1% met.
### Example 2
Example 2 — Threshold met by paid-up sum: Members holding shares on which ₹4,50,000 has been paid up wish to send special notice. Answer: Valid — ₹4,50,000 is within the ₹5,00,000 limit. Threshold met by alternative criterion.
### Example 3
Example 3 — Timing problem: AGM is on 30th September. Members give special notice on 25th September. Answer: Invalid — special notice must be given at least 14 days before, exclusive of date of notice and date of meeting. Only 4 clear days available.
### Example 4
Example 4 — Company's notice to members: Special notice received on 1st August; AGM on 10th August. The company has only 9 days, but must notify members at least 7 clear days before. Answer: The company can comply if it dispatches notice on or before 2nd August. If not practicable, it must publish in English + vernacular newspapers having wide circulation in the State of the registered office.
### Example 5
Example 5 — Auditor change: ABC Ltd. wants to appoint Mr. P as auditor in place of retiring auditor Mr. Q at the AGM. Answer: Special notice under Sec. 140(4) is required. Without it, the company cannot validly transact this business.
⚠️ Common exam mistakes
Confusing 'Special Notice' (members → company) with the company's notice for the GM — they are two separate steps under Sec. 115.
Forgetting that both thresholds (1% voting power OR ₹5 lakh paid-up) are ALTERNATIVE — meeting either is enough.
Counting the date of notice and date of meeting while computing 14 days / 7 days — they are excluded under Rule 23.
Missing that special notice is required for both 'appointment of auditor other than retiring' AND 'expressly that the retiring auditor shall not be re-appointed' — these are two distinct triggers.
Assuming the upper time limit doesn't exist — special notice cannot be given EARLIER than 3 months before the meeting.
Forgetting that if direct notification to members is not practicable, newspaper + website publication is the prescribed substitute.
Bare-Act text Section 115 read with Rule 23 · Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014 · click to expand
Section 115 — Where, by any provision contained in this Act or in the articles of a company, special notice is required of any resolution, notice of the intention to move such resolution shall be given to the company by such number of members holding not less than one per cent of total voting power or holding shares on which such aggregate sum, not exceeding five lakh rupees, as may be prescribed, has been paid-up.
Rule 23 of Companies (Management and Administration) Rules, 2014 — Special notice shall be signed by members holding ≥1% of total voting power or shares on which not less than ₹5,00,000 has been paid up. The notice shall be sent to the company not earlier than 3 months but at least 14 days before the meeting (excluding day of notice and day of meeting). The company shall give notice of the resolution to its members at least 7 days before the meeting; where not practicable, by publication in English and vernacular newspapers and on the website, at least 7 days before.