Shareholder activism explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Shareholder activism, in the sense of this article, means using the rights the Companies Act, 2013 already gives members of a company: to see information, to force a meeting, to put a resolution, to remove a director and, at the top end, to go to the Tribunal. It is useful for minority members of a private or unlisted public company, and for promoters and directors who need to know what a dissatisfied member may lawfully do. Where a dispute has already formed, our legal dispute resolution team can map the options.
The Act gives members a ladder of tools, from the mildest (information) to the strongest (an application to the Tribunal). Each tool has its own eligibility test, printed in the section itself, and most turn on a share of the voting power or capital. This is a map of statutory tools, not advice to agitate. Pick the lightest tool that fits the grievance, and check the test before acting.
The ladder of tools
1. Information rights
Members are entitled to the financial statements and the auditor's report before the annual meeting: section 136(1) requires them to be sent to every member not less than twenty-one days before the meeting, with a proviso allowing shorter notice where members of the kind described agree. See section 136. Minutes may also be inspected; see sections 119 and 120.
Section 171 gives members the right to inspect the register of directors and key managerial personnel (kept under section 170) during business hours, to take extracts and to have copies on request within thirty days. If inspection is refused or the copy is not sent within thirty days, the Registrar, on application, orders immediate inspection and supply (section 171(2)).
2. Requisition of an extraordinary general meeting (section 100)
In a company with share capital, the Board must call an extraordinary general meeting on the requisition of members holding, on the date the requisition is received, not less than one-tenth of the paid-up share capital that carries the right of voting (section 100(2)(a)). The requisition sets out the matters, is signed by the requisitionists and goes to the registered office (section 100(3)).
If the Board does not, within twenty-one days of a valid requisition, proceed to call the meeting for a day not later than forty-five days from receipt, the requisitionists may call and hold it themselves within three months of the requisition (section 100(4)). The company reimburses their reasonable expenses, which are deducted from any fee or remuneration of the directors in default (section 100(6)). See section 100 and requisition by members.
3. A members' resolution and statement (section 111)
On a written requisition of the number of members required by section 100, the company must give notice of a resolution that may properly be moved and circulate a statement on it (section 111(1)). The requisition must be deposited at the registered office not less than six weeks before the meeting for a resolution, or two weeks for any other requisition, together with a sum reasonably sufficient for the company's expenses (section 111(2)). See sections 111 to 113.
4. Special notice (section 115)
Where the Act or the articles require special notice of a resolution, it is given by members holding not less than one per cent of the total voting power, or holding shares on which an aggregate sum not exceeding five lakh rupees, as may be prescribed, has been paid up. The company then notifies the members in the prescribed manner. See sections 115 and 116.
5. Removal of a director (section 169)
A company may, by ordinary resolution, remove a director before the end of the term after giving a reasonable opportunity of being heard (section 169(1)). Exceptions in the section: a director appointed by the Tribunal under section 242; an independent director re-appointed for a second term, who is removed only by special resolution; and a company that has adopted proportional representation under section 163. Special notice is required of the resolution to remove, or to appoint someone in place (section 169(2)); the director gets a copy and is entitled to be heard, whether or not a member (section 169(3)); and a director removed cannot be re-appointed by the Board to fill the vacancy (section 169(7)). Removal does not take away compensation or damages payable under the contract (section 169(8)).
Section 163 lets the articles provide for appointing not less than two-thirds of the directors by proportional representation, once in every three years.
6. Application for investigation (section 213)
In a company with share capital, not less than one hundred members, or members holding not less than one-tenth of the total voting power, may apply to the Tribunal for an investigation, with evidence of good reasons (section 213(a)). If the Tribunal orders, the Central Government appoints inspectors. See sections 213 to 229.
7. Oppression and mismanagement (sections 241 and 244)
A member who complains that the affairs are conducted in a manner prejudicial to public interest, or prejudicial or oppressive to members, or to the interests of the company, may apply to the Tribunal if the member has a right to apply under section 244 (section 241(1)(a)). In a company with share capital, section 244(1)(a) gives that right to not less than one hundred members or one-tenth of the total number of members, whichever is less, or members holding not less than one-tenth of the issued share capital, with all calls and sums due paid. The Tribunal may waive these requirements on application. Joint holders count as one member (Explanation to section 244(1)). See sections 241 to 244.
8. Class action (section 245)
Members or depositors, in the numbers set out in section 245(3), may apply on behalf of all for orders such as restraining the company from acting beyond its articles or from acting on a resolution altering them, or for damages or compensation from the company, its directors, the auditor or an expert. The section's numbers for a company with share capital are one hundred members or "such percentage ... as may be prescribed", whichever is less, or a prescribed percentage of issued share capital; the percentages are fixed by rules, so read the current rules. See section 245.
Section 151 (a small shareholders' director) applies to a listed company, and listed companies have further requirements not covered here.
Table: tool, section, who may use it
| Tool | Section | Who may use it | What it achieves |
|---|---|---|---|
| Copies of financial statements | 136 | Every member | Information before the meeting |
| Inspect register of directors | 171 | Members | Facts on directors and shareholdings |
| Requisition of EGM | 100 | Members with one-tenth of paid-up voting capital | A meeting on a stated matter |
| Members' resolution | 111 | Members as required in section 100 | Notice and statement circulated |
| Special notice | 115 | Members with one per cent of voting power or the prescribed paid-up sum | Valid notice of an intended resolution |
| Removal of director | 169 | Members, by ordinary resolution on special notice | Director removed, hearing preserved |
| Investigation | 213 | One hundred members or one-tenth of voting power | Inspectors if the Tribunal orders |
| Oppression | 241, 244 | Members meeting the section 244 test | Tribunal relief |
| Class action | 245 | Members or depositors meeting the prescribed test | Orders and damages on behalf of all |
Worked example (all figures assumed)
Harbour Pack Private Limited (assumed) has forty members. A group of three holds twelve per cent of the paid-up voting capital and has paid all calls. The Board has stopped sending management accounts and proposes to give a director's relative a long contract.
The group first asks to inspect the register of directors and the minutes. At twelve per cent it clears the one-tenth test for a requisition under section 100 and can ask under section 111 for a resolution on the contract. It also clears the one per cent leg of section 115 for a special notice if it moves to remove a director. It holds more than one-tenth of the issued capital, so the section 244 test is met if the facts amount to oppression. Whether it may use section 245 depends on the current prescribed percentages. The group begins with inspection and a requisition: cheaper, quicker, and a record is built.
Common lapses
- Counting members when the section asks for a share of paid-up capital, or the reverse.
- Sending a requisition that does not set out the matters, or not to the registered office.
- Missing the six-week deposit period for a resolution under section 111.
- Skipping special notice for a removal under section 169.
- Going to the Tribunal first when a meeting would settle the issue.
Need help with a member dispute?
If you are a minority member weighing these steps, or a company facing a requisition, our team can help you check the eligibility, draft the papers and plan the sequence through our legal dispute resolution service.
Key takeaways
- The Act gives members a graded set of tools; use the lightest that fits.
- Each tool has its own test printed in the section; check it before acting.
- A requisition under section 100 needs one-tenth of the paid-up voting capital.
- Removing a director needs special notice and a hearing for the director.
- Oppression and class action go to the Tribunal; the class action numbers are prescribed by rules.
- Listed companies have further requirements not covered here.
Read next
- Section 241 to 244: oppression and mismanagement
- Section 245: class action
- Directors and officers liability insurance and other protections for directors
- Crisis management for a company board
Disclaimer: Based on the Companies Act, 2013 (MCA consolidated text) and, for the Essential Commodities Act, 1955, the India Code text showing amendments up to Act 40 of 2021, as consulted on 6 October 2026. Later amendments, rules, notifications and control orders should be checked in their current form. Checklists, report outlines and examples are illustrative drafting by TaxClue with invented names and figures. This article is general information, not legal advice; check the official text before acting.