As per Companies Act, 2013, the process for seeking an extension for holding an Annual General Meeting (AGM) involves various steps. Following is the detailed overview of how to seek the extension for holding an AGM in 2024:
1. Annual General Meeting Requirement (Section 96 of the Act): –
> First AGM: A company must hold its first AGM within nine (9) months from the end of its first financial year.
> Subsequent AGMs: For subsequent financial years, the AGM should be held within Six (6) months from the end of the financial year, ensuring that not more than fifteen (15) months elapse between two AGMs.
2. Application for seeking the Extension: –
If a Company is unable to hold its AGM within the prescribed time i.e. within in 6 months, it may apply for an extension. Here’s how to go about it:
> To Call Board Meeting;
> To Convene a Board Meeting on the specified date;
> To Pass a Board Resolution for seeking extension for holding AGM specifying the special reason for extension of AGM;
> To file an application to the ROC in Form No – GNL-1;
> In GNL-1, the special reason for not holding of AGM along with other necessary information to be provided;
> To attach the Certified true copy of the Board Resolution in E-Form GNL-1;
> Follow up with the office of the ROC;
> The ROC shall examine the application on the specific grounds and may grant an extension, if it thinks it necessary to grant the same.
> To obtain a certificate of grant of extension to hold the AGM of the company.
Few reasons for Extension of AGM: –
> Delay in finalizing the Financials;
> Mergers & acquisitions;
> Natural Calamity;
> Loss of data in computer due to virus/system problem;
> Delay in audit reports due to non-availability of auditors because of resignation, death, incapacity to sign or such other valid reason;
> Change in financial year;
> Non availability of shareholders which may result in absence of quorum;
> Non-availability of directors on the valid grounds, for instance, sudden death of Directors and consequence of this the limit of directors goes below the minimum requirements of directors;
> Confiscation of Books of accounts by Income Tax Department, Serious and Fraud Investigation Cell or any other Government officials etc.
3. Timeline for filing an application: –
The Application should be filed well in advance before the due date (i.e. before 30th September, if Company follows the Financial Year).
ROC may extend the AGM after considering the special reason, for a period not exceeding three (3) months. First AGM can’t be extended.
If Company does not hold its AGM till 30th September (date on or before AGM ought to be held), without extension to hold the AGM from ROC, then it shall be considered as non-compliance. Then Company will have go for Compounding.
4. Penalty: –
The Company and every officer of the Company who is in default shall be punishable with fine which may extend to Rs. 1 Lakh and in case of continuing default with a further fine which may extend to Rs. 5000/- for every day during which such default continues.
5. Compounding: –
In case AGM could not be held or held after due date without seeking the approval from concerned ROC, then the Company will have to go to Regional Director (RD) for compounding.
6. Advice: –
From previous 2 years, there are lowest cases of COVID-19 in India. Everything has normalized, it does not seem that MCA may issue any circular for extension of AGM for this year. So, it is advisable to seek extension for holding AGM well in advance. For any further assistance, you may contact us:- M/s Sazid & Associates, Company Secretary in Practice. Email: [email protected] Mobile: 9654490581/8178445363
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