A meeting of members of the company where annual report is presented for adoption is called the Annual general meeting or AGM and it should not be mistaken with any other type of shareholder’s meeting.
Holding of AGM (sec 96)
Annual general meeting is to be held annually by every company except One Person Company (as it has only one member).
♦ First AGM- within the period of 9 months from the end of first financial year.
♦ Subsequent AGM- within the period of 6 months from the end of each financial year and following secretarial standards.
|Secretarial Standard [SS-2] under the purview of Companies act, 2013, specifies that the subsequent Annual General Meeting should be held on the earliest of the following dates:
(a) fifteen months from the date of the last Annual General Meeting; or
(b) The last day of the calendar year; or
(c) six months from the close of the financial year.
The gap between two AGM shall not exceed 15 months.
Note: It is not necessary to hold AGM in the calendar year of the incorporation.
Let’s take an example: – A company incorporated on 1st Jan 2018. First AGM shall be held within 9 months from the end of FY 31.03.2019 i.e. by 31.12.2019. No need to hold AGM in the year of incorporation i.e. in 2018.
Time/date/venue for AGM (Analysis of Sec 96 & SS-2)
Time: The meeting shall commence in the business hours i.e. between 9 a.m. to 6 p.m. but there is no barrier to end the meeting during business hours, it may go beyond.
Date: Any day including Sunday & public holiday but not on a National Holiday, as declared by the Central Govt.
Venue: At the registered office of the company; or
At any place in the city, town or village where registered office of the company is situated; or
At any place in pan India for an unlisted company provided all of its members consent is taken in advance either by writing or by electronic mode.
Note: The above is not for Section 8 company and Government Company.
However, non-readiness of the financial statements or absence of quorum in the original meeting may lead towards adjournment of AGM, which shall be held within the maximum time limit allowed under the Act without any extension.
Conclusion: AGM is considered an obligatory act which needs to be performed by the company & its officers as per Companies act, 2013. This is being done to sheer transparency among company’s members & stakeholders. Defaulting AGM is considered as an offence & may attract stringent penalties.