Article explains about Annual General Meeting, Purpose of Holding Annual General Meeting, Period of Holding Annual General Meeting, Business to be transacted at an Annual General Meeting, Day for Holding Annual General Meeting, Time for Holding Annual General Meeting, Place for Holding Annual General Meeting, Default in Holding Annual General Meeting, Report on Annual General Meeting and The Companies (Management and Administration) Rules 2014.

Annual General Meeting

As per section 96 of companies Act, 2013,  Every Company, other than One person company (OPC) shall in each year hold (in addition to any other meetings), a general meeting as its Annual General Meeting.

Purpose of Holding Annual General Meeting

  • Safeguarding the interest of the shareholders of a company.
  • It provides opportunity to the shareholders to meet at least once every year to review the functioning of the company during the previous year.

Period of Holding Annual General Meeting

1. First Annual General Meeting- The Company shall hold its first annual general meeting within a period of nine (9) months from the closing of first financial year. 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.

It must be noted that time for holding the first Annual General Meeting cannot be extended by any authority under any circumstances.

2. Subsequent Annual General Meeting-The Company shall hold its subsequent annual general meeting within a period of six (6) months of the closure of relevant financial year. The time lag between two successive Annual General Meetings shall not exceed 15 months.

Registrar may, for any special reason shown, grant a extension of time for holding the subsequent AGM by a period not exceeding 3 months.

Note- Delay in the completion of the audit o the annual accounts of a company cannot ordinarily constitute a special reason justifying the grant of extension of time for holding its AGM, as per Department of Company Affairs.

DCA has clarified that while granting the extension, ROC can ignore the requirement of holding an AGM in every calendar year. However in such a case AGM held in the next year shall be deemed to the AG, of the previous year and for the next year, one more AGM will b required to be held.

Business to be transacted at an Annual General Meeting

Both ordinary business and special business can be transacted at an Annual General meeting,

Matters related with Ordinary business

  • the consideration of accounts, balance sheet and the reports of the board of directors and auditors.
  • the declaration of dividend.
  • The appointment of directors in place of those retiring and
  • The appointment of and the fixing of remuneration of the auditors.

Any business other than the above mentioned business, which can be transacted at an Annual General Meeting shall be deemed to be special business.

Note- in case of Extra Ordinary General meeting all businesses are special businesses as per section  102 of companies Act 2013.

Day for Holding Annual General Meeting

Annual General meeting shall be called on a day which is not a National Holiday,

National Holiday means and includes a day declared as National Holiday by the central government.

Where central government declares a day to be National Holiday after the company has issued the notice convening the meeting it shall not be deemed to be a national holiday in relation to that meeting.

Time for Holding Annual General Meeting

Every Annual General meeting shall be called at a time during business hours i.e. between 9 a.m. to 6 p.m. It may be noted that Annual General Meeting convened during business hours may continue even after business hours.

It may be noted that the central government may exempt any company from the aforesaid provisions subject to such conditions as it may impose.

Place for Holding Annual General Meeting

To 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 situated.

It may be noted that the central government may exempt any company from the aforesaid provisions subject to such conditions as it may impose.

Default in Holding Annual General Meeting

Following consequences arises

  • As per section 97 of Companies Act 2013, NCLT may direct calling of an AGM provided any member of the company approach to it. in this regard. NCLT may even direct that one member of the company present in person or by proxy shall be deemed to constitute the meeting.
  • As per section 99 of Companies Act 2013, the failure to call this meeting is an offence punishable with fine which may extend to Rs 1, 00,000/- on the company and every officer of the company who is in default. In case of continuing default there can be a further fine which may extend to Rs 5,000 for every day of default.

Report on Annual General Meeting

As per section 121 Every Listed Public company to prepare in the prescribed manner, a report on each annual general meeting including the confirmation to the effect that the meeting was convened held and conducted as per provisions of the Act and Rules made there under.

As per Rule 31 of The Companies (Management and Administration) Rules 2014 A copy   of report in form MGT-15 to be filed with Registrar within 30 days of the conclusion of the AGM.

The Companies (Management and Administration) Rules 2014

Report shall be prepared in the following manner namely

(a)  the report under this section shall be prepared in addition to the minutes of the general meeting;

(b). the report shall be signed and dated by the Chairman of the meeting or in case of his inability to sign, by any two directors of the company, one of whom shall be the Managing director, if there is one and company secretary of the company;

(c). the report shall contain the details in respect of the following, namely:-

  • the day, date, hour and venue of the annual general meeting;
  • confirmation with respect to appointment of Chairman of the meeting;
  • number of members attending the meeting;
  • confirmation of quorum;
  • confirmation with respect to compliance of the Act and the Rules, secretarial standards made there under with respect to calling, convening and conducting the meeting;
  • business transacted at the meeting and result thereof;
  • particulars with respect to any adjournment, postponement of meeting, change in venue; and
  • any other points relevant for inclusion in the report.

(d) the Report shall contain fair and correct summary of the proceedings of the meeting.

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