A Company is a separate legal entity different from its members. So, its affairs are generally done by Board of Directors. The Board of directors provides a road map within its limited power for the progress of a Company. Certain powers are controlled by the boards after getting consent of the company at their general meeting. The shareholders as the owner of the company control over the proceeding of the meeting. The Annual General Meeting gives them opportunity to know the condition of the company and also make suggestion for its improvement and progress.
Annual General Meeting:-
As per Section 96 of the Companies Act , 2013,
- Every Company other than One person Company must hold a general meeting in each year apart from other meetings as Annual General Meeting (AGM).
- Every Company has to set up a managing Committee to run its smooth working of managerial works.
- Every Company , apart from One person Company ( OPC ) must have to hold in addition to other meetings, by giving a notice about the meeting, not more than 15 months in between the date of AGM to the next. A Company may hold its first AGM within the period of 9 months from closing of its first financial year otherwise in other cases within the period of 6 months. [Section 96(1) of the Companies Act,2013]
As per the above , if a company hold its meeting, then it has no need to call an AGM in the year of its incorporation.
However , the registrar may extend the period within any AGM ( not being the first AGM) shall be held, not exceeding 3 months under section 96(1).
- Every AGM shall be called during business hours ( i.e. 9 a.m. to 6 p.m.) on any day not a national day declared by the Central Government , and also held I the registered office or in any place within the city ,village, or town in which the registered office is situated.
- According to Section 129(2), at every AGM board of directors of the company shall lay before the meeting financial statement for the financial year.
- Moreover, Section 129(3) says, where the company has one or more subsidiaries, then they have to prepare in addition to the statement under section 129(2) a consolidated financial statement and of all subsidiaries in same format and also present before the AGM of the Company with the prescribed statement under section 129(2).
- There is no provision for extension of 1st AGM but in other cases it can be extended for period of three months by ROC.[ Second proviso to Section 96 of the Companies Act,2013]. However , if such first AGM is not held, NCLT can order holding of General Meeting under section 97 of the Act. Application for extension of time should be submitted electronically in e-form no. 61.
- After the ending of the financial year i.e. 31st March, all the auditing processes must be completed within three-four months. But the AGM must be held within six months from the closing date of financial year. A notice of 21 days has to be sent to all members. So, the audited accounts, directors report has to be closed on 31st March and been posted by first week of September.
- Business to be transacted:-
As per section 102(2) of the Companies Act, 2013,the following business es may be transacted during AGM:-
1) Ordinary Business [Section 102(2)], i.e.
a. Consideration of financial Statements and reports of board of directors and Auditors.
b. Declaration of any Dividend
c. Appointment of directors in place of retiring one
d. Appointment of and Fixation of the remuneration of the auditors.
2) Special Business [Section 102(b)], : Apart from the above businesses , the rest are deemed to be a Special business , transacted during the AGM.
Annual General Meeting is compulsory if,
- Business of the Company was taken over by Government.
- Company did not function.
- Accounts of the Company are not ready.
Defaulting in holding Annual General Meeting:
If a Company not holding an Annual General Meeting as per Section 166 , or not complying with any direction of the Central Government, then the Company and its every officer come in the Category under section 168 of the Company Act ,2013 and punishable with fine which may extend to Rs. 50000 and for regular basis it may extend to Rs.2500 for every day .[ Section 168]
Further , as per section 167 of The Companies Act ,1956 provides for the power of the Company Law Board (CLB) to call AGM in the following circumstances:
- As per section 94, if Company fails to hold Annual General Meeting, any member of the company can request to NCLT (powered with CLB) for calling AGM.[ Section 97(1)]
- The CLB can give any ancillary or consequential directions which are expedient in relation to the calling, holding and conducting the meeting. [ Section 167(1)]
- Apart from the above, CLB also directs that one member of the company present in person or by proxy, which shall be deemed to constitute a meeting.
- A general meeting held as per the direction of the CLB, deemed to a n annual general meeting of the company.
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Yes, AGM can be held the place other than Registered office.. but before conducting the AGM company has to pass a Special Resolution.
Dear Sir ,
I have a question , i have to conduct an AGM for Private limited company , whereas the Board meeting going to be held in foreign for the Financials approval and other activities , Based on the when can i conduct the AGM for my company .
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And also let me know me first AGM date and next AGM date
Can a AGM of listed company held other than registered office, city, town, village…(i.e other than state where registered office is situated)
Under section 166 of the Companies Act 1956, there is no provision for holding 2nd or subsequent AGM but in the new provision under section 96 of the Companies Act 2013 the time limit for such AGM has been fixed to be held with in a period of six months from the end of financial year.
According to section 101(3), Notice of meeting shall be given 21 days before meeting to every member of company including director, auditor, and legal representative of any deceased member or assignee of an insolvent member.
Yes AGM can be held on public holiday or on sunday only it can not be held on national holiday.
Thanks sir
Apart from SS-2,is there any provision in Companies Act for sending Notice of AGM to Directors and Members?
Why it is framed that AGM to be held with in 6 month from end of financial year
please reply ASAP
Thank You
Hey,
Is there any regulation in regard to draft appointment resolution as a part of notice for appointment of statutory Auditors.
Reply ASAP
can annual gm be held on public holiday
Very useful and simple to understand.
Hello, Very good and useful information of this topic. You are very proud of your Principal. Keep it up and continue to send this kind of article.
It is mentioned in the Article that Companies whose accounts are not ready need to hold AGM compulsorily. So how does it work once the accounts are finalised? Also before the accounts are finalised, is there any form that needs to be filed with ROC and post accounts finalisation, how do we place the dates? Accounts approval date will be after the AGM date. The form will not let us proceed. Please help.