Annual General Meeting (AGM) Under Company Act, 2013

An annual general meeting (AGM) under Companies Act, 2013 is a yearly meeting of company’s interested shareholders to receive, consider, approve and adopt the Annual Financial Statements (whether standalone or consolidated) ending on 31st March every year together with the Board of Directors Report and Report of the Auditors thereon.

Other matters which are generally discuss in AGM are –

• Dividend declaration to shareholders.
• Appointment of directors to replace the retiring directors.
• Appointment of auditors and deciding the auditor’s remuneration.

Apart from the above ordinary business, any other business may be conducted as a special business of the company.

As per Section 96 of the Companies Act, 2013, Every company other than a One Person Company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it, and not more than fifteen months shall elapse between two annual general meeting of a company.

The first annual general meeting of the Company should be held within a period of nine months from the date of closing of the first financial year of the company and in any other case, within a period of six months, from the date of closing of the financial year.

Provided that if a company holds its first annual general meeting as aforesaid, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation.

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.

Time and Place of AGM –

Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situates:

Provided that annual general meeting of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance:

Explanation.—for the purposes of this sub-section, “National Holiday” means and includes a day declared as National Holiday by the Central Government.

NOTICE OF AGM –

The company must give a clear 21 days’ notice to its members for calling the AGM. The notice should mention the place, the date and day of the meeting, the hour at which the meeting is scheduled. The notice should also mention the business to be conducted at the AGM. A company should send the notice of the AGM to:

• All members of the company including their legal representative of a deceased member and assignee of an insolvent member.
• The statutory auditor(s) of the company.
• All director(s) of the company.

The notice may be given in writing through speed post or registered post or via electronic mode. The notice should be sent to the address of the member as per the records of the company.

In the case of electronic communication, the notice should be sent to the e-mail address of the member as per the records of the company. The notice can be text typed in an email or an attachment to an email or as a notification providing electronic link or Uniform Resource Locator for accessing such notice. The e-mail shall be addressed to the person entitled to receive such e-mail as per the records of the company or as provided by the depository.

Provided that the company shall provide an advance opportunity at least once in a financial year, to the member to register his/her e-mail address and changes therein and such request may be made by only those members who have not got their email id recorded or to update a fresh email id and not from the members whose email ids are already registered.

The subject line in e-mail shall state the name of the company, notice of the type of meeting, place and the date on which the meeting is scheduled and the notice if sent through email should be in the form of a non-editable attachment to e-mail, such attachment shall be in the Portable Document Format or in a non-editable format together with a ‘link or instructions’ for recipient for downloading relevant version of the software.

The notice of the AGM should be placed on the website of the company or any other website as may be mentioned by the government.

An AGM can be called at a notice of less than 21 days if at least 95% of the members entitled to vote in the meeting agree to the shorter notice. The consent may be given in writing or through electronic mode.

QUORUM OF AGM –

In the case of a private company, the quorum for AGM is:

• Two members present at the meeting.

In the case of a public company, the quorum for AGM is:

• Five members present at the meeting if the number of members is within one thousand.
• Fifteen members present at the meeting if the number of members is more than one thousand but within five thousand.
• Thirty members present at the meeting if the number of members is more than five thousand.

In case the quorum for the meeting is not present within half an hour from the scheduled time, the meeting will be adjourned to the same day in the next week for the same time and at the same place.

Reporting of the AGM –

After the conduct of AGM, every listed company has to file a report on the AGM in form MGT-15 within a period of 30 days from the conclusion of the AGM.

The report provide a confirmation that the meeting was convened, held and conducted as per the provisions of the Act and the rules.

Minutes Of AGM –

Minutes means a formal written record, in physical or electronic form, of the proceedings of a Meeting.

Minutes Book means a Book maintained in physical or in electronic form for the purpose of recording of Minutes.

Minutes of AGM has to be prepared by every company compulsorily. The minutes of the AGM means the written record of the proceedings of the meeting in sequence and the resolutions passed in the AGM.

The Company Secretary any other person duly authorized by the Board or by the Chairman will record the proceedings of the AGM.

The minutes should be initialed and signed and entered in the minute book within thirty days from the AGM. The Minutes book will be kept at the Registered Office of the company or at such other place approved by the Board.

Any member/shareholder of the company, upon request to the company, can inspect the Minutes book of the AGM on paying the prescribed fee.

Consequences and Penalty for Default in Holding an AGM –

In case company fails to hold an AGM within the stipulated time or extension obtained by it, the Tribunal may itself or on an application made by any director or member order an AGM to be conducted as per its directions.

If the company further defaults in holding a meeting in accordance with the directions of the Tribunal, the company and every officer of the company who commit the default shall be punishable with a fine of up to Rs 1 lakh. In case of continuing default, a fine of Rs 5,000 per day is levied for each day during which the default continues.