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Extension of Annual General Meeting and its Process

As we all are very well aware of the fact, that the Company is required to hold its Annual General meeting within the stipulated time prescribed by Section 96 of the Companies Act, 2013 (hereinafter referred to as the 2013 Act). Rather than all of the time, it happens that the Company due to part of any circumstances is unable to hold the Annual General Meeting within the stipulated time prescribed by the Act.
CS Santosh Pandey

INTRODUCTION

As we all are very well aware of the fact, that the Company is required to hold its Annual General meeting within the stipulated time prescribed by Section 96 of the Companies Act, 2013 (hereinafter referred to as ‘the 2013 Act’). Rather than all of the time, it happens that the Company due to part of any circumstances is unable to hold the Annual General Meeting within the stipulated time prescribed by the Act.

In that scenario, the Company needs to require seeking some additional time-period to done with the compliances. As per the 2013 Act, for granting of such additional time-period beyond the due date, one needs to obtain the approval from Registrar of Companies. The power of Registrar to give approval to the extension of the Annual General Meeting is of discretionary nature.

In this article, we will deal and explain the concept of the extension of Annual General Meeting and process for availing such extension. Further, we will also discuss what can or cannot be the special reason which we can put forth before the Registrar of Companies.

STIPULATED TIME FOR ANNUAL GENERAL MEETING SECTION 96(1) OF THE 2013 ACT-

For Newly Incorporated Company and the First Annual General Meeting-

9 months from the date of end of financial year.

For Other Companies and subsequent Annual General Meeting

6 months from the date of end of financial year

> Maximum time gap between two annual general meetings shall not be more than 15 months.

THIRD-PROVISO TO SECTION 96 OF THE 2013 ACT

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.”

After examining the above mentioned proviso, we can conclude that-

The Registrar of Companies has been empowered by the Act itself and he is also bound by the restriction, that the extension can be granted only when there is any persistence of some SPECIAL REASON. Further, that power of the Registrar is also limited to the extent of 3 months only.

WHAT CAN AND CANNOT BE THE SPECIAL REASON FOR NOT ABLE TO HOLD ANNUAL GENERAL MEETING WITHIN DUE DATE?

1. Not able to held ANNUAL GENERAL MEETING due to Natural Calamity- A VALID REASON

2. Confiscation of Books of accounts by Income tax department, Serious and Fraud Investigation cell, or any other government official- A VALID REASON

3. Sudden resignation of the Statutory Auditor from the Company without providing the audited balance sheet- A VALID REASON (depending from case to case)

4. Falling of director below the numbers prescribed by the Act- A VALID REASON

5. Company is planning to go into liquidation, and all employees along with Accounts department have left the Company- A VALID REASON

6. In the case law of Bijoy Kumar Karnani V. Assistant Registrar of Companies, Calcutta High Court held that-

Non-availability of Annual Accounts- NOT A VALID REASON, and

7. Deficiency in the Quorum of the Annual General Meeting- NOT A VALID REASON.

8. Any other reason depending upon circumstances prevailing in the Company at the present point of time.

PROCESS FOR OBTAINING APPROVAL OF EXTENSION OF ANNUAL GENERAL MEETING-

Step 1

Notice of the Board Meeting to be sent to every director of the Company for considering the matter of obtaining extension of ANNUAL GENERAL MEETING.
Step 2 Conduct the Board Meeting.
Step 3 Obtain the approval of the Board of Directors of the Company for making application to the Registrar.
Step 4 Make an application to the Registrar in e-Form GNL-1

Attachments-

√ Application with the mentioning of the special reason and other necessary information(s), and

√ Certified true copy of the Board Resolution

Step 5 Follow-up of the case with the good office of Registrar.
Step 6 Obtain Certificate of grant of extension of ANNUAL GENERAL MEETING by the Registrar.

Note– The obtaining of approval of Registrar for the extension of the ANNUAL GENERAL MEETING is itself a critical thing in itself and needs special attention onto it.

For any query or discussion you can reach the author at pcs.santosh07@gmail.com.

Categories: Company Law

View Comments (3)

  • I dont understand whether these 3months are in addition to the time gap of 15months or it is included in these 15months

  • What in case of the company is under insolvency and the Resolution Professional is looking after the affairs of the Company? pls reply asap?

  • my auditor is resigned on date 01/02/2018 without audit of the company for the f.y. 2016-17

    1. new auditor appointment date. ?
    2. New A.G.M. Date Should be ?
    3. Signing Date of auditor on balance sheet and audit report . ?

    Thanks in Advance

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