MCA has issued circular General Circular No. 02/2021 dated January 13, 2021 in respect of Extension of Holding of AGM through Video Conferencing. Many queries were received from professionals by me which includes
1. Whether AGM can be held even after December 31, 2020?
2. Whether this circular is only for the f.y. 2019-20 or it is also for FY 2020-21?
As per Para 1 of Circular:
Companies whose Annual General Meetings were due in Calendar Year 2020 and whose AGM shall be due in Calendar Year 2021 can hold their Annual General Meeting through Video Conferencing or other audio-Visual means.
As per Para 2 of Circular:
MCA has clarified in para 2 that this circular is nowhere granting any extension for holding of Annual General Meeting after due date.
Ques 1
Whether AGM can be held even after December 31, 2020?
As per para 2, date of holding of AGM is not extended. If Companies fails to hold AGM till due date, they are liable for legal action under Companies Act, 2013.
Ques 2
Whether this circular is only for the f.y. 2019-20 or 2020-21?
As per para 1, whatever AGM of Companies falling in calendar year 2020 and 2021. They can hold such AGM through Video Conferencing.
Ques 3
Which Companies are falling under this Circular?
All the Companies incorporated under Companies Act, 2013 can take benefit of this circular and hold their AGM through Video Conferencing till December 31, 2021.
[1] http://www.mca.gov.in/MinistryV2/extensionofagm.html
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Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected]).
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 professional advice and is subject to change without notice. I assume no responsibility for the consequences of the use of such information.
Author Bio
Brief about the Company:
1. X Pvt Ltd is the flagship Company of the Group engaged in the business of taking vehicles on finance and giving them on hire and using them for other purposes. A Proprietorship firm of Chartered Accountants is conducting the Statutory audit of the Company continuously and regularly since F.Y 2009-10. Balance Sheet audit of the Company for the year ended 31st March, 2020 was done by that audit firm and the UDIN is generated. The signing date of the Balance Sheet was 10th February, 2021. In that audited Balance Sheet, the outstanding secured loan amount towards Banks & NBFCs is Rs 57 crores. Hence it is a specified company which falls within the definition of Section 139(2) read with Rule 5 of the Company (Audit & Auditors’ Rules) 2014.
Nature of Queries:
1. Appointment of Auditor: The last ADT-1 appointing the aforesaid firm as auditor for one year only was filed for the F.Y 2018-19 . Since the proprietorship firm has done the audit & generated the UDIN, is it mandatory to appoint the firm for F.Y 2019-20. If so done, this will be his 11th consecutive appointment. By doing so, whether it would fall under the mischief of Sec 139(2). Alternatively, whether the UDIN already generateed by that auditor be cancelled and new auditor be appointed now. We need an opinion on this issue.
2. Holding of A.G.M: No AG.M was held in the year 2020 or in the year 2021 uptill now. Last A.G.M date was 30th September 2019. What is the way out to hold the A.G.M. We need the A.G.M date for filing the AOC 4 & MGT 7 for the F.Y 2019-20.
3. Whether CFSS needs to be filed with ROC for condoning the delay in filing forms? What is the legal consequences and fee thereof?
4. A new company Y Pvt Ltd has recently been incorporated in April 2021 within the same Group. X Pvt Ltd (the aforesaid
Company) holds 94% of Equity Shares in this recently incorporated Y Pvt Ltd. The remaining 6% shares are held by four
individuals two of whom are directors of X Pvt Ltd. What needs to be done to make Y Pvt Ltd a wholly owned subsidiary of X
Pvt Ltd?