Seeking an Extension for Holding Annual General Meetings (AGMs) under the Companies Act, 2013
Summary: Companies seeking to postpone their Annual General Meeting (AGM) must file an application with the Registrar of Companies (ROC) in Form GNL-1, as outlined in theCompanies Act, 2013. The request must be supported by a board resolution detailing the reasons for the delay, such as a natural calamity or an issue with a financial audit. While the ROC can grant an extension of up to three months, the application must be filed well in advance to avoid penalties. The Ministry of Corporate Affairs has issued a General Circular No. 09/2024 allowing companies to hold AGMs and Extraordinary General Meetings (EGMs) through video conferencing until September 30, 2025. However, this circular does not extend the statutory deadlines for holding these meetings; companies that fail to meet the timeline remain liable for penalties under the Companies Act, which can include fines up to Rs.1 lakh. Here’s a detailed overview of the steps involved:
1. AGM Requirements (Section 96 of the Act)
– First AGM: To be held within 9 months from the end of the first financial year.
– Subsequent AGMs: To be held within 6 months from the end of each financial year, with a maximum gap of 15 months between two AGMs.
2. Application for Extension
If a company is unable to hold its AGM within the prescribed time, it can apply for an extension. The steps are:
– Convene a Board Meeting to pass a resolution seeking an extension, specifying the reasons.
– File an application with the Registrar of Companies (ROC) in Form GNL-1.
– Attach a certified true copy of the Board Resolution to the application.
– Follow up with the ROC office.
The ROC will examine the application and may grant an extension if deemed necessary.
3. Reasons for Extension
Some valid reasons for seeking an extension include:
– Delay in finalizing financials
– Mergers and acquisitions
– Natural calamities
– Loss of data due to system problems
– Delay in audit reports
– Change in financial year
– Non-availability of shareholders or directors
4. Timeline for Filing
The application should be filed well in advance before the due date (e.g., before September 30th for companies following the financial year). The ROC may grant an extension for a period not exceeding 3 months.
5. Penalties
Failure to hold the AGM within the prescribed time without an extension can result in fines of up to Rs. 1 lakh, with an additional fine of Rs. 5,000 per day for continuing default.
6. Compounding
If a company fails to hold its AGM or holds it after the due date without seeking approval, it will need to approach the Regional Director for compounding.
7. Recent Circulars
The Ministry of Corporate Affairs has issued circulars allowing companies to conduct AGMs through video conferencing or other audio-visual means up to September 30, 2025. However, this does not confer any extension of statutory time for holding AGMs, and companies will still be liable for legal action if they fail to adhere to the relevant timelines.
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For any further assistance, you may contact us:- M/s Sazid & Associates, Company Secretary in Practice. Email: sazidandassociates@gmail.com Mobile: 9654490581
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