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    Question

    A Private Limited Company has only three shareholders:

    'X', 'Y', and 'Z'. Shareholder 'Z' is a body corporate (a company). At the Annual General Meeting, 'X' is personally present, and 'Z' is represented by an authorized representative appointed under Section 113 of the Companies Act, 2013. Shareholder 'Y' is absent but has sent a proxy. Is the quorum validly constituted?"
    A No, because Section 103 requires two natural persons who are shareholders to be personally present, and an authorized representative is considered a proxy. Correct Answer Incorrect Answer
    B Yes, because an authorized representative of a body corporate under Section 113 is deemed to be a member 'personally present' for the purpose of quorum. Correct Answer Incorrect Answer
    C No, because in a company with only three members, the law requires 100% attendance to form a quorum. Correct Answer Incorrect Answer
    D Yes, provided that the proxy of 'Y' is counted toward the quorum to reach the minimum requirement of two. Correct Answer Incorrect Answer
    E Yes, but only if the Articles of Association specifically allow an authorized representative to be counted as a 'personally present' member. Correct Answer Incorrect Answer

    Solution

    Detailed Explanation: 1.    Legal Fiction of Personal Presence: Under Section 113 (for body corporates) and Section 112 (for the President or Governors), an authorized representative is not a "proxy." The law treats them as the member themselves. Therefore, they are counted toward the quorum. 2.    Why B is the Answer: In the scenario, 'X' (personally present) + 'Z's Representative' (deemed personally present) = 2 Members . This satisfies the requirement of Section 103. 3.    Why D is incorrect: It is a fundamental rule that proxies are excluded from quorum calculations under the Companies Act, 2013. 4.    Why A is incorrect: An authorized representative has all the rights of a member, including the right to be counted for a quorum and the right to vote on a show of hands, which a proxy does not have.   Summary Table: Quorum Requirements (Section 103)

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