Extension of Annual General Meeting and its Process

INTRODUCTION

As we all are very well aware of the fact, that the Company is required to hold its Annual General meeting within the stipulated time prescribed by Section 96 of the Companies Act, 2013 (hereinafter referred to as ‘the 2013 Act’). Rather than all of the time, it happens that the Company due to part of any circumstances is unable to hold the Annual General Meeting within the stipulated time prescribed by the Act.

In that scenario, the Company needs to require seeking some additional time-period to done with the compliances. As per the 2013 Act, for granting of such additional time-period beyond the due date, one needs to obtain the approval from Registrar of Companies. The power of Registrar to give approval to the extension of the Annual General Meeting is of discretionary nature.

In this article, we will deal and explain the concept of the extension of Annual General Meeting and process for availing such extension. Further, we will also discuss what can or cannot be the special reason which we can put forth before the Registrar of Companies.

STIPULATED TIME FOR ANNUAL GENERAL MEETING SECTION 96(1) OF THE 2013 ACT-

√ For Newly Incorporated Company and the First Annual General Meeting-

9 months from the date of end of financial year.

√ For Other Companies and subsequent Annual General Meeting

6 months from the date of end of financial year

> Maximum time gap between two annual general meetings shall not be more than 15 months.

THIRD-PROVISO TO SECTION 96 OF THE 2013 ACT

“Provided also that the Registrar may, for any special reason, extend the time within which any annual general meeting, other than the first annual general meeting, shall be held, by a period not exceeding three months.”

After examining the above mentioned proviso, we can conclude that-

The Registrar of Companies has been empowered by the Act itself and he is also bound by the restriction, that the extension can be granted only when there is any persistence of some SPECIAL REASON. Further, that power of the Registrar is also limited to the extent of 3 months only.

WHAT CAN AND CANNOT BE THE SPECIAL REASON FOR NOT ABLE TO HOLD ANNUAL GENERAL MEETING WITHIN DUE DATE?

1. Not able to held ANNUAL GENERAL MEETING due to Natural Calamity- A VALID REASON

2. Confiscation of Books of accounts by Income tax department, Serious and Fraud Investigation cell, or any other government official- A VALID REASON

3. Sudden resignation of the Statutory Auditor from the Company without providing the audited balance sheet- A VALID REASON (depending from case to case)

4. Falling of director below the numbers prescribed by the Act- A VALID REASON

5. Company is planning to go into liquidation, and all employees along with Accounts department have left the Company- A VALID REASON

6. In the case law of Bijoy Kumar Karnani V. Assistant Registrar of Companies, Calcutta High Court held that-

Non-availability of Annual Accounts- NOT A VALID REASON, and

7. Deficiency in the Quorum of the Annual General Meeting- NOT A VALID REASON.

8. Any other reason depending upon circumstances prevailing in the Company at the present point of time.

PROCESS FOR OBTAINING APPROVAL OF EXTENSION OF ANNUAL GENERAL MEETING-

Note– The obtaining of approval of Registrar for the extension of the ANNUAL GENERAL MEETING is itself a critical thing in itself and needs special attention onto it.

For any query or discussion you can reach the author at pcs.santosh07@gmail.com.