The document provides a structured set of frequently asked questions explaining the legal requirements relating to Annual General Meetings (AGMs) under the Companies Act, 2013. It states that every company, except a One Person Company (OPC), is required to hold an AGM each year and the meeting must be clearly identified as such in the notice convening it. The time gap between two AGMs must not exceed fifteen months. The first AGM of a company must be held within nine months from the close of its first financial year, whereas subsequent AGMs must be conducted within six months from the end of the financial year. If the first AGM is held within the prescribed period, the company is not required to hold another AGM in the year of incorporation.
The FAQs also explain the meaning of “year” and “financial year,” noting that the financial year generally ends on 31 March unless the company is incorporated on or after 1 January, in which case the first financial year may extend to 31 March of the following year. The Registrar of Companies may grant an extension of up to three months for holding AGMs other than the first AGM. Applications for such extension are required to be filed in Form GNL-1.
The document further outlines rules regarding the time and place of AGMs. Generally, AGMs must be held at the registered office or within the same city, town, or village, during business hours and on a day that is not a national holiday. Unlisted companies may hold AGMs at another place in India with the consent of all members. It also addresses provisions relating to government companies, Section 8 companies, and the applicability of Secretarial Standard-2. Consequences for failure to hold an AGM and the requirement to hold the meeting even if accounts are not ready are also explained.
Question: Is every company required to hold an Annual General Meeting, and what is the time gap allowed between two AGMs?
Answer: Yes, as per section 96(1) every company, except a One Person Company (OPC), is required to hold an Annual General Meeting each year in addition to any other meetings. The meeting must be clearly specified as an AGM in the notice calling it. Further, the gap between two AGMs should not exceed fifteen months.
Question: Is a One Person Company required to hold an Annual General Meeting.?
Answer: No, as per Section 96(1) of the Companies Act, 2013, a One Person Company is not required to hold an Annual General Meeting. The manner of passing resolutions in an OPC is governed by Section 122 of the Act.
Question: What is the time limit for holding the first Annual General Meeting and subsequent AGMs after the close of the financial year?
Answer: In the case of the first Annual General Meeting, it must be held within nine months from the date of closing of the first financial year of the company. In any other case, the AGM must be held within six months from the date of closing of the financial year.
Example: Suppose ABC Pvt. Ltd. is incorporated on 1st July 2024 and its first financial year ends on 31st March 2025.
- Being a company (other than OPC), it is required to hold an Annual General Meeting (AGM) every year.
- Its first AGM must be held within 9 months from the close of the first financial year, i.e., on or before 31st December 2025.
Now, assume the company holds its first AGM on 30th September 2025.
- For the next AGM, it must be held within 6 months from the close of the next financial year (31st March 2026), i.e., on or before 30th September 2026.
- Also, the gap between the two AGMs (30th September 2025 and 30th September 2026) does not exceed 15 months, hence it is valid.
Question: Is a company required to hold an Annual General Meeting in the year of its incorporation if it has already held its first AGM within the prescribed time?
Answer: No, if a company holds its first Annual General Meeting within the prescribed period, it is not required to hold any AGM in the year of its incorporation (second proviso to Section 96(1).
Example: Suppose a company is incorporated on 1st June 2025 and its first financial year ends on 31st March 2026.
- The company must hold its first AGM within 9 months from 31st March 2026, i.e., on or before 31st December 2026.
- If the company holds its first AGM on 31st December 2026, then it is not required to hold any AGM in the year 2025 (year of incorporation).
Thus, holding the first AGM within the prescribed time exempts the company from conducting an AGM in the year of incorporation.
Year and Financial Year
Question: What is meant by the term “year” in the context of an AGM?
Answer: The term “financial year” is defined under Section 2(41) of the Companies Act, 2013; however, the term “year” is not specifically defined in the Act. Therefore, “year” is generally interpreted to mean a calendar year.
Question: What is meant by the term “financial year” in relation to a company?
Answer: As per Section 2(41), “financial year”, in relation to any company or body corporate, means the period ending on the 31st day of March every year. However, where a company is incorporated on or after the 1st day of January of a year, the financial year shall mean the period ending on the 31st day of March of the following year, in respect of which the financial statements of the company or body corporate are prepared.
Example: Suppose XYZ Pvt. Ltd. is incorporated on 15th February 2025.
- Since the company is incorporated on or after 1st January, its first financial year will not end on 31st March 2025.
- Instead, its first financial year will end on 31st March 2026.
Thus, the financial year of the company will be from 15th February 2025 to 31st March 2026, and financial statements will be prepared for this entire period.
Extension of time by ROC for holding AGM.
Question: Can the time for holding an Annual General Meeting be extended, and if so, by whom and for how long?
Answer: Yes, the time for holding an Annual General Meeting, other than the first AGM, may be extended by the Registrar for any special reason [third proviso to Section 96(1)]. However, such extension shall not exceed a period of three months. The power of the Registrar of Companies to extend the time for holding the meeting was reduced from six months to three months by the Companies Amendment Act, 1960.
Question: Is extension of time allowed for holding the first AGM as well as subsequent AGMs?
Answer: No, there is no provision for granting an extension of time for holding the first Annual General Meeting. However, in the case of subsequent AGMs, which are required to be held within six months from the date of closing of the financial year, the Registrar of Companies may grant an extension of time not exceeding three months. There is no further power with ROC to extend the timelines for holding an AGM.
Question: Which form is required to be filed for seeking extension of time for holding an AGM?
Answer: Since no specific form is prescribed under the relevant rules for making an application for extension, such application is required to be filed in Form GNL-1 as per Rule 12(2) of the Companies (Registration Offices and Fees) Rules, 2014.
Question: What relaxation was provided by MCA General Circular 18/2020 regarding the holding of AGM?
Answer: As per MCA General Circular 18/2020, due to difficulties caused by COVID-19, it was clarified that if companies (other than those in their first financial year) whose financial year ended on 31st December 2019 hold their AGM within nine months from the closure of the financial year (i.e., by 30th September 2020), the same shall not be treated as a violation. Accordingly, references to the due date of AGM under the Act or rules were to be construed in line with this relaxation.
Example: Suppose ABC Ltd. follows a calendar financial year ending on 31st December 2019.
- Under normal provisions, the company was required to hold its AGM within 6 months, i.e., by 30th June 2020.
- However, due to MCA General Circular 18/2020 (COVID-19 relaxation), the company was allowed to hold its AGM within 9 months, i.e., by 30th September 2020.
If the company holds its AGM on 15th September 2020, it will not be treated as a violation, even though it is beyond the normal 6-month limit.
Question: What was clarified by MCA General Circular No. 28/2020 regarding companies unable to hold AGM for the financial year ended 31st March 2020?
Answer: MCA, vide General Circular No. 28/2020 dated 17.08.2020, clarified that companies which were unable to hold their AGM for the financial year ended on 31st March 2020, even after availing the relaxation of holding AGM through video conferencing or other audio-visual means (as provided under General Circular No. 20/2020), were required to file an application in Form GNL-1 for seeking extension of time to hold the AGM.
Example: Suppose XYZ Ltd. was required to hold its AGM for the financial year ended 31st March 2020 by 30th September 2020.
- The company tried to conduct the AGM through video conferencing as permitted under MCA General Circular No. 20/2020.
- However, due to technical issues and lack of quorum, it could not hold the AGM.
In such a case, as per MCA General Circular No. 28/2020, the company must apply to the Registrar of Companies by filing Form GNL-1 to seek an extension of time for holding the AGM.
Thus, instead of defaulting, the company can regularize the delay by applying for extension through the prescribed process.
Time and place of holding an AGM
Question: Where can an Annual General Meeting of a company be held?
Answer: An Annual General Meeting can be held only at the registered office of the company or at any place within the city, town, or village where the registered office of the company is situated, and not at any other place.
Question: What are the requirements regarding the timing and day of holding an Annual General Meeting?
Answer: Every Annual General Meeting shall be called during business hours, i.e., between 9 a.m. and 6 p.m., on any day that is not a National Holiday. However, while the meeting must be convened during business hours, it may extend and conclude beyond such hours.
As per the explanation to Section 96(2), “National Holiday” means a day declared as such by the Central Government. Further, Secretarial Standard–2 clarifies that it includes Republic Day (26th January), Independence Day (15th August), Gandhi Jayanti (2nd October), and any other day declared as a National Holiday by the Central Government.
Question: Can an unlisted company hold its AGM at a place other than where its registered office is situated?
Answer: Yes, an unlisted company may hold its Annual General Meeting at any other place in India, provided that consent is given in writing or through electronic mode by all the members in advance (first proviso to Section 96(2)). This provision was introduced by the Companies (Amendment) Act, 2017 and is effective from 3rd January 2018.
Question: Where can a Government company hold its Annual General Meeting?
In the case of a Government company, the words “some other place within the city, town or village in which the registered office of the company is situated” are substituted with “such other place as the Central Government may approve in this behalf”. This substitution has been made vide Notification No. G.S.R. 463(E) dated 05.06.2015.
Question: Who decides the time, date, and place of the AGM in case of a Section 8 company?
Answer: In the case of a Section 8 company, the time, date, and place of each Annual General Meeting are to be decided in advance by the Board of Directors, having regard to the directions, if any, given by the company in a general meeting. This provision was inserted after the first proviso to Section 96(2) vide Notification No. G.S.R. 466(E) dated 05.06.2015.
Question: What are the consequences of not holding an AGM within the stipulated time?
Answer: Companies that fail to hold their Annual General Meeting within the stipulated period as laid down under Section 96 of the Companies Act, 2013 are in contravention of the provisions of the Act and are liable to pay a fine under Section 99. This offence is a continuing offence until the compliance is made.
Question: Is it mandatory to hold AGM even if accounts are not ready?
Answer: It is well settled that an AGM must be held whether or not the annual accounts are ready for consideration. There is a clear statutory duty on the directors to call the meeting, as the consideration of accounts is only one of the matters to be dealt with at an AGM.
Question: Is Secretarial Standard–2 (SS-2) applicable for AGM?
Answer: Yes, Secretarial Standard–2 (SS-2) is applicable to Annual General Meetings. With effect from 01.07.2015, SS-2 issued by the Institute of Company Secretaries of India (ICSI) applies to all types of General Meetings of all companies, except One Person Company and such class or classes of companies which are exempted by the Central Government through notification.
*****
Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the author whatsoever and the content is to be used strictly for informational and educational purposes. While due care has been taken in preparing this article, certain mistakes and omissions may creep in. the author does not accept any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon.
Author Bio
