FAQs on Adjournment of Annual General Meeting (AGM)

The FAQ on adjournment of Annual General Meetings (AGMs) under the Companies Act, 2013 explains that while Section 96 prescribes timelines for holding AGMs, it does not prohibit adjournment of a duly convened and validly commenced AGM. An adjourned AGM is treated as a continuation of the original meeting and not as a fresh meeting. Accordingly, adjournment beyond the statutory due date does not by itself constitute a default if the AGM commenced within the prescribed period. The document also explains that Section 103(2) expressly recognizes automatic adjournment where quorum is absent, while Regulation 49 of Table F permits adjournment even when quorum is present, subject to members’ consent. However, adjournment cannot be used to defeat statutory compliance requirements, including obligations relating to financial statements and annual filings. Government clarifications and judicial precedents have emphasized that repeated or indefinite adjournments cannot be used to circumvent the law or extend statutory timelines.

CRUX OF SECTION 96(1) OF THE COMPANIES ACT, 2013

1. Every company, other than a One Person Company (OPC), is required to hold an Annual General Meeting (AGM) every year.

2. The interval between two AGMs shall not exceed 15 months.

3. The first AGM must be held within 9 months from the close of the first financial year of the company.

4. Every subsequent AGM must be held within 6 months from the close of the relevant financial year.

5. The Registrar of Companies (ROC) cannot grant any extension for holding the first AGM.

6. In the case of any AGM other than the first AGM, the ROC may, for any special reason, grant an extension of time not exceeding 3 months.

Question: Whether the Companies Act, 2013 prohibits the adjournment of an Annual General Meeting?

Answer: There is no provision in the Act that restricts the adjournment of a duly convened AGM. Therefore, an AGM that has been validly convened and commenced within the time prescribed under Section 96 may be adjourned in accordance with the Articles of Association, the applicable Secretarial Standards, and the general principles governing the conduct of meetings.

Accordingly, where an AGM is properly held and commenced within the statutory period prescribed under Section 96, its adjournment to a later date does not, by itself, constitute a default under the Companies Act, 2013. An adjourned meeting is generally regarded as a continuation of the original meeting and not as a fresh meeting.

Question: Whether adjournment of an AGM after the maximum time-limit allowed under Section 96 (e.g., 30 September) constitutes a default under Section 96 of the Companies Act, 2013?

Answer: No, mere adjournment of an AGM beyond the due date prescribed under Section 96 does not constitute a default under Section 96, provided that the AGM was duly convened and validly commenced within the prescribed statutory period.

The requirement of Section 96 is that the Annual General Meeting must be held within the stipulated time. Once the meeting has been properly convened and has commenced before the expiry of the prescribed period, a valid adjournment does not result in non-compliance merely because the adjourned meeting is held after the due date.

An adjourned meeting is regarded in law as a continuation of the original meeting and not as a fresh meeting. Therefore, where an AGM commences on or before the due date and is thereafter adjourned for any valid reason, the completion of the remaining business on the adjourned date beyond 30 September would generally not amount to a default under Section 96.

ADJOUREMTN DUE TO ABSENCE OF QUORUM

Question: What is the effect of absence of quorum at a general meeting under Section 103(2) of the Companies Act, 2013?

Answer: Section 103(2) of the Companies Act, 2013 specifically provides for the consequences where the requisite quorum is not present within thirty minutes from the time appointed for holding a general meeting. The said provisions says that –

“(2) If the quorum is not present within half-an-hour from the time appointed for holding a meeting of the company—

(a) the meeting shall stand adjourned to the same day in the next week at the same time and place, or to such other date and such other time and place as the Board may determine; or

(b) the meeting, if called by requisitionists under section 100, shall stand cancelled.”

As per Section 103(2)(a), where a meeting is not requisitioned under Section 100 and the quorum is not present within half an hour, the meeting shall automatically stand adjourned to the same day in the next week at the same time and place, or to such other date, time and place as may be determined by the Board of Directors.

However, under Section 103(2)(b), if the meeting was convened by requisitionists under Section 100 and the quorum is not present within thirty minutes, the meeting shall stand cancelled and not adjourned.

Therefore, Section 103(2) expressly recognizes the concept of adjournment of a general meeting and provides a statutory instance where a meeting automatically stands adjourned due to the absence of quorum.

ADJOURNMENT OF AGM UNDER REGULATION OF TABLE- F

Question: Whether a company can adjourn an Annual General Meeting even when the requisite quorum is present?

Answer: Yes. Regulation of Table F under Schedule I to the Companies Act, 2013 specifically recognizes the power of adjournment and provides as follows:

Adjournment of Meeting — Regulation 49 of Table F

• The Chairperson may, with the consent of any meeting at which a quorum is present, and shall, if so directed by the meeting, adjourn the meeting from time to time and from place to place.
• No business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.
• When a meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as in the case of an original meeting.
• Save as aforesaid, and as provided in Section 103 of the Act, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.

Accordingly, where the AGM has been duly convened and the requisite quorum is present, the Chairperson may, with the consent of the members present, adjourn the meeting to a later date, time, or place. Such adjournment may be resorted to for various reasons, including inability to complete the business of the meeting, lack of sufficient information for members’ consideration, disorderly conduct, or any other circumstances considered appropriate by the meeting.

This power of adjournment is distinct from the statutory adjournment contemplated under Section 103(2) of the Companies Act, 2013. Under Section 103(2), if quorum is not present within thirty minutes from the time appointed for holding the meeting, the meeting stands automatically adjourned (except in the case of a requisitioned meeting under Section 100, which stands cancelled). Such adjournment is automatic and arises by operation of law.

In contrast, Regulation 49 applies where quorum is present and the meeting is validly constituted. In such cases, the adjournment is effected by the Chairperson with the consent or direction of the members and is intended to facilitate the completion of the unfinished business of the meeting.

Question: When is Table F of Schedule I to the Companies Act, 2013 applicable to a company?

Answer: Table F of Schedule I to the Companies Act, 2013 contains a model set of Articles of Association (AOA) for a company limited by shares. The applicability of Table F is governed by Section 5 of the Companies Act, 2013.

Accordingly, in the case of a company incorporated under the Companies Act, 2013, the provisions contained in Table F automatically apply to the extent that the company’s registered Articles of Association do not exclude or modify them. Therefore, it is not necessary for a company to expressly adopt every regulation contained in Table F. Any regulation of Table F that is not excluded or modified by the company’s Articles becomes part of the company’s internal regulations by virtue of Section 5(8).

Remark: Before relying on any particular regulation of Table F, it is necessary to examine the Articles of Association of the company. If the Articles expressly exclude or modify a regulation contained in Table F, the Articles will prevail. Conversely, where the Articles are silent and do not exclude or modify the relevant regulation, the corresponding provision of Table F will apply as if it were incorporated into the Articles themselves.

Question: Whether the AGM can be adjourned for any period?

Answer: Regulation 49 of Table F under Schedule I to the Companies Act, 2013 The Chairperson may, with the consent of any meeting at which a quorum is present, and shall, if so directed by the meeting, adjourn the meeting from time to time and from place to place. When a meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as in the case of an original meeting.

However, this power cannot be exercised to defeat the statutory timelines prescribed under the Companies Act. A question had arisen before the erstwhile Department of Company Affairs regarding the situation where companies deliberately adjourn the Annual General Meeting and hold the adjourned meeting much later—sometimes even a year after the close of the relevant financial year—in order to gain additional time for preparing or manipulating accounts.

The Department clarified as under:

“The provisions of Regulation 53 in Table A of Schedule I to the Companies Act or the provisions of Sections 191 or 219 of the Act provided no safeguard against a company adopting the device of adjourning the AGM to gain time. The remedy lies in launching prosecutions, in such cases, under sub-section (5) of Section 210.”

(Department’s File No. 2/25/61-PR)

Although the clarification was issued under the Companies Act, 1956, the principle continues to remain relevant under the Companies Act, 2013. Under the present law, if the financial statements are not laid before the AGM, prosecution may be initiated under Section 129 of the Companies Act, 2013.

Further, the Department of Company Affairs, through Circular No. 2/85 dated 25.03.1986, clarified the legal position regarding adjournment of Annual General Meetings where accounts are not ready for adoption.

The Department observed that defaults under Sections 159, 166, 210 and 220 of the Companies Act, 1956 are separate and independent offences. A contention had been raised based on Circular No. 4 of 1974 dated 02.02.1974 that a company could adjourn the AGM if accounts were not ready and thereby avoid non-compliance under Section 210.

Rejecting such interpretation, the Department clarified that it is mandatory for the Board of Directors to lay the financial accounts before every AGM within the statutory period prescribed under Section 210(3). Although a company may adjourn the AGM where accounts are not ready, the adjourned AGM itself must also be held within the statutory time limit prescribed under Section 166(1), including any extension granted by the Registrar.

Accordingly, the procedure of adjournment cannot be used as a mechanism to bypass the statutory requirements relating to laying of accounts. If the accounts are not laid either at the original AGM or at the adjourned AGM within the prescribed statutory period, the defaulting directors become liable for prosecution under Section 210(5) of the Companies Act, 1956.

In support of this interpretation, the Department referred to the judgment of the Calcutta High Court in Bejoy Kumar Karnani vs Assistant Registrar of Companies, reported in (1985) 58 Comp Cas 293. The Division Bench held that if the earlier Circular dated 02.02.1974 were interpreted literally and independently of Sections 166 and 210, companies could continue adjourning AGMs indefinitely (“ad infinitum”), thereby frustrating the operation of Sections 166, 168 and 210 of the Act and creating chaos and confusion in enforcement by the Registrar of Companies.

Key Takeaways – Adjournment of Annual General Meeting (AGM)

1. Section 96 mandates holding of AGM within prescribed timelines, i.e., first AGM within 9 months from the close of the first financial year and subsequent AGMs within 6 months from the close of the financial year, subject to a maximum ROC extension of 3 months (except for the first AGM).

2. The Companies Act, 2013 not prohibits adjournment of an AGM. There is no restriction on adjourning a duly convened and validly commenced AGM.

3. An adjourned AGM is a continuation of the original AGM and not a fresh meeting.

4. Adjournment beyond the due date prescribed under Section 96 does not by itself constitute a default, provided the AGM was duly convened and commenced within the statutory period.

5. Section 103(2) expressly recognizes adjournment due to absence of quorum.

• • If quorum is not present within 30 minutes, the meeting automatically stands adjourned.
  • In case of a requisitioned meeting under Section 100, the meeting stands cancelled and not adjourned.

6. An AGM may also be adjourned despite the presence of quorum.

• • Regulation 49 of Table F empowers the Chairperson, with the consent of the meeting, to adjourn the meeting from time to time and place to place.
  • Only unfinished business can be transacted at the adjourned meeting.

7. Where an AGM is adjourned for 30 days or more, fresh notice must be issued in the same manner as for the original meeting.

8. Table F applies automatically to the extent it is not excluded or modified by the company’s Articles of Association. Therefore, the Articles must always be examined before relying upon Regulation 49.

9. A resolution passed at an adjourned AGM takes effect from the date of the adjourned meeting, being the date on which the resolution is actually passed.

10. The power of adjournment cannot be used to defeat statutory compliance requirements.

• • Adjournment cannot be employed as a device to postpone the laying, consideration, or adoption of financial statements indefinitely.
  • Statutory obligations relating to financial statements, annual returns, and AGM compliances remain independent obligations.

11. Government clarifications and judicial precedents have consistently held that repeated adjournments cannot be used to circumvent the law.

• • The erstwhile Department of Company Affairs clarified that adjournment cannot be used to gain additional time for preparing accounts.
  • The principle laid down in Bejoy Kumar Karnani v. Assistant Registrar of Companies remains relevant, namely that companies cannot adjourn AGMs indefinitely (“ad infinitum”) so as to frustrate statutory requirements.

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Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the author whatsoever and the content is to be used strictly for informational and educational purposes. While due care has been taken in preparing this article, certain mistakes and omissions may creep in. the author does not accept any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon.