Before Starting, It would be more beneficial for us to understand the “Substantial Part” of the Section 96(1) proviso 3, regarding the Power of Registrar of Companies whereof 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 substantial part in the extension Proviso is definitely the “Special Reason” on the basis of which the Registrar of Companies may extend the time for holding the Annual General Meeting.
The Plain Reading of Section 96(1) Proviso 3 Specify as under:
“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.”
Now the question arise before us that which and what kind of reasons are considered be the special Reasons by the regulator? While drafting of the Application for extension of the Annual general Meeting which needs to be filed before the Registrar of Companies, one must understand that the Reasons specified in the application should necessarily be the Factual one and not the bogus/self generated and specially made for the extension application. The Facts of the Case always considered to be the most important part of the application before the any Regulator or any authority. The Registrar of Companies may give the extension upto three months from the due date of AGM. It is further important to mention here that the registrar is even authorized to give the extension of less than three months even if the Company has made the application for the extension of three months.
According to our understanding, some of important points which are generally considered as the “special reasons” by the Registrar of Companies are specified as under:
1. Any unforeseen Nature calamity like earth quakes etc.
2. Restructuring of the company in any Arrangement/Scheme of Merger and Amalgamations
3. Shareholders and/or Directors unavailability due to any natural Reason like medical illness etc.
4. Delay in finalizing the Financials by the Company due to any unforeseen event in the Company.
Delay in completion of audit of the financial statements of the company does not ordinarily constitute a “special reason” justifying the extension of time for holding the Annual General Meeting.
The Procedure which must be adopted by the Company in the process of Extension of Annual General Meeting Specified as under:
1. Atleast Seven days notice {Section 173 (3)} must be given to the directors of the Company specifying the agenda items therein whereof the Board Resolution proposed for filing of Application of Extension of AGM with the Registrar of Companies.
2. Pass the Proposed Board Resolution as specified above in duly convened Board Meeting.
3. Filing of Application for Extension of Annual General Meeting with the Registrar of Companies in E-Form GNL-1
4. Issuance of Approval order for the Extension of due date of AGM by Registrar not more than 3 months on the basis of “Special Reason” mentioned in the Application and Board Resolution.
Or
5. Rejection Order issued by the Registrar of Companies on the grounds of “Invalid Reason” or “a “Reason does not found to be Special or found immaterial ” while considering the Application of extension of AGM.
While drafting of the application, one thing must be very clear to the management that until and unless the justified Reason of Special importance not given to the registrar, the application will not be approved. The power delegated under third proviso of section 96 is of discretionary in nature and not the obligatory so the satisfaction of Registrar is must.
Relevant Documents
1. Notice of Board Meeting specifying the proposed resolution for Application for extension of AGM to the Registrar of Companies.
2. Certified True Copy of Board Resolution for filing of Application of extension of AGM specifying the special Reason.
3. Application to Registrar of Companies seeking the extension of Time for Holding the AGM
4. Enclosures to the Application: Copy of Proceedings, MOA and AOA of the Company
5. In some specific cases, the Affidavits or declarations by the Directors need to be filed along with application.
Conclusion: The extension of AGM under Section 96(1) Proviso 3 is a discretionary power vested in the Registrar of Companies, emphasizing the importance of genuine and substantiated “special reasons” in the application. Companies must adhere to procedural norms and provide compelling justifications to secure an extension. For comprehensive guidance on navigating AGM extensions and complying with legal requirements, consult with a qualified professional.
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Disclaimer: The content of the article has been drafted for knowledge sharing purpose and not for any legal use. Kindly verify the correctness of data/contents from your own sources. This is only for information purpose.
CS Sidharth Sharma, FCS, Company Secretary in Practice based at New Delhi. Contact mail id: cs.sidharth11@gmail.com, Phone: 98111-34037
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