In general parlance an annual general meeting (AGM) is a yearly gathering between the shareholders of the company and its board of directors. Generally, this is the time in which the director’s and the shareholder meet to have a detailed discussion on company’s financial prospects, its annual growth etc. and present the company’s Annual report.
According to the sub-section (1) of section 96 of Companies, Act 2013, it allows a company to hold its AGM within a period of Six month OR Nine month, as the case maybe, from the closure of the financial year not later than the period of 15 months from the date of last AGM.
FIRST AGM
As per section 96 of Companies, Act 2013, a company have to conduct its first AGM within Nine months from the closure of its first financial year, hypothetically if a company is incorporated in the month of January 2023, then the first AGM can be conducted within Nine months from the closure of its first financial year i.e. 31-12-2023.
SUBSEQUENT AGM
As per section 96 of Companies, Act 2013, a company shall conduct its AGM within Six months from the closure of its financial year, hypothetically if a company had conducted its last AGM on 29-09-2022, then the upcoming AGM shall be conducted within Six months from 31-03-2023.
PROCEDURE TO HOLD AN AGM
The company must give a clear 21 days’ notice to its member for calling the AGM.
The notice should mention the Place, the Date, Business and day of the meeting, and the Hour at which the meeting should be scheduled. A company should send the notice of the AGM to:
- All the members of the company including their legal representative
- The statutory auditor of the company
- All director of the company
- Any other person as invitee
Can a Company can Hold AGM at a notice period shorter than 21 days?
AGM can be called at a notice period shorter than 21 days if at least 95% of the member entitled to vote in the meeting agree to the shorter period by providing a written shorter notice consent.
PENALTY FOR LATE HOLDING OF AGM
A fine of up to 1 lakh for the company and each officer in default .If the default Continues, the fine may increase by Rs 5,000 for each day.
CONDUCTING OF AGM THROUGH VC/OAV MEANS
As per Section 173 of the Companies Act, 2013 which allowed companies to conduct the board meeting on some matters through VC/OAV means, however there is no provision in the Companies Act, 2013 relating to conducting AGM through Video conferencing and other audio visual means, owing to covid-19 Ministry have provided extension with respect to the same which is extended till 30th September, 2024 vide General Circular No. 20/2020 dated 25-09-2023.
https://taxguru.in/company-law/mca-circular-agms-via-vc-oavm-2024-allowed.html
EXTENSION ON AGM
As per section 96 of Companies, Act 2013, the company due to some special reason such as delay in audit, uncertain event/mis-happenings etc, can apply to the ROC for extension of holding AGM.
Owing to covid-19 MCA had provided many relaxation on the due date for conducting AGM, but as on F.Y 2-22-23, the due date for conducting ADM is 30th September, 2023.
Detailed analysis of the extension process will be discussed in some other article.
An AGM is a critical event for companies, providing an opportunity to engage with shareholders, present financial reports, and make important decisions. Compliance with AGM regulations is essential to avoid penalties and ensure transparency in corporate governance.
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Disclaimer: The entire contents of this document have been prepared based on relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness, and reliability of the information provided, I assume no responsibility, therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a piece of professional advice and is subject to change without notice. I assume no responsibility for the consequences of the use of such information.
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