In this editorial, the author clarifies on Further Extension of AGM under Companies Act, 2013 with reference to Recent MCA Circular which provides as follows:-

“If a company fails to hold the AGM till 31st December 2020 for the financial year ended 31.03.2020, Whether such company can apply with the ROC for the further extension u/s 96 of the Companies Act, 2013?”

Provisions of Law:

As per section 96(1) and first proviso, the due date of holding of the AGM is earlier of the following:

  • 15 months from the date of the last AGM; or
  • 6 months from the end of the financial year

Section 96 third proviso”, 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.

The time for holding AGM can be extended for special reasons by three months, with permission of the Registrar of Companies.

Language of Extension Order:

[1]In terms of the power vested with us (ROC) the third proviso of Subsection (1) to Section 96 of the Act, I hereby extend the time to hold the AGM, other than the first AGM, for the financial year ended 31.03.2020 for Companies within the jurisdiction of this ROC which are unable to hold their AGM for such period within the due date of holding the AGM by a period of 3 months from the due date by which the AGM ought to have been held.

As per the above order of ROC’s, they have used their power u/s 96 third proviso and granted a general extension of 3 months for holding of AGM for f.y. ended 31.03.2020.

Question of Editorial:

“If a company fails to hold the AGM till 31st December 2020 for the financial year ended 31.03.2020, Whether such Company can apply with the ROC for further extension u/s 96 of Companies Act, 2013?”

Point 1: As per Section 96(1), There should not be more than a 15-month gap between two AGMs.

Point 2: As per the second proviso of Section 96, A company should hold the AGM within 6 months from the end of the financial year.

Point 3: As per the third proviso of Section 96, ROC’s having the power to grant the extension for holding of the AGM maximum up to 3 months from the due date.

Point 4:  The due date of holding of the AGM is earlier of the following:

  • 15 months from the date of the last AGM; or
  • 6 months from the end of the financial year

Point 5: The Due date after the general extension shall be earlier of the following:

  • 18 months from the date of the last AGM; or
  • 9 months from the end of the financial year

Conclusion:

As per the above-mentioned provisions of Section 96, ROC having the power to grant an extension only up to 3 months from the Due date. Which has already been granted by ROC as General Extension.

Therefore, one can opine that, if any company files an application with the ROC u/s 96 for the further extension of the AGM for the f.y. ended 31.03.2020, ROC cannot allow such extension as it will be out of the power of the ROC under the Companies Act, 2013.

Therefore, it can be concluded that Companies must hold the AGM till 31st December 2020. If they are unable to hold the AGM till 31st December 2020, then this shall be considered as a non-compliance with Section 96 of the Companies Act, 2013.

The Company & the officer in default shall be liable for a penalty if they are unable to hold the AGM till 31st December 2020 and have to file an application of compounding with the concerned authority (RD or NCLT).

  [1] http://www.mca.gov.in/MinistryV2/extensionofagm.html

*****

Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected]).

Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

Author Bio

More Under Company Law

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

January 2021
M T W T F S S
 123
45678910
11121314151617
18192021222324
25262728293031