AGM Venue Anywhere in India for Unlisted Companies under Section 96

AGM Anywhere in India: How an Unlisted Company Can Hold Its Annual General Meeting Anywhere in India

Summary: The Annual General Meeting is a significant corporate governance event, and Section 96 of the Companies Act, 2013 prescribes requirements concerning its timing, frequency and venue. As a general rule, Section 96(2) requires an AGM to be held at the registered office or another place within the city, town or village in which the registered office is situated. A specific proviso permits an unlisted company to hold its AGM at any place in India where consent is given in writing or through electronic mode by all members in advance. This relaxation was introduced through the Companies (Amendment) Act, 2017 with effect from 3 January 2018. The article explains the essential conditions for using this relaxation, including the requirement that the company be unlisted and that unanimous advance consent be obtained from all members. It also distinguishes venue relaxation under Section 96(2) from the shorter-notice requirement under Section 101(1), under which separate consent is required for convening a meeting on shorter notice. The article further discusses the distinction between physical AGMs and meetings conducted through Video Conferencing or Other Audio Visual Means, practical illustrations, documentary and board-recording practices, and the consequences of non-compliance. It concludes that although the proviso provides valuable flexibility for unlisted companies with geographically dispersed shareholders, companies must ensure unanimous advance consent and maintain appropriate documentation to protect the validity of the AGM.

Introduction

The Annual General Meeting (AGM) is one of the most significant corporate governance events in the life cycle of a company. As companies prepare to convene their AGMs, many face practical challenges when shareholders are scattered across the country—a situation particularly common in private and unlisted public companies. Section 96 of the Companies Act, 2013 prescribes mandatory requirements regarding the timing, frequency, and venue of AGMs

As a general rule, Section 96(2) requires every AGM to be held at the registered office of the company or at some other place within the city, town, or village where the registered office is situated. However, recognizing operational realities, the legislature provided a critical relaxation permitting unlisted companies to hold their AGM at any place in India, subject to strict statutory conditions.

Statutory Provision

Section 96(2) of the Companies Act, 2013 provides:

Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate:

“Provided that annual general meeting of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance.”

This proviso creates an exception to the general requirement regarding the venue of the AGM and grants flexibility exclusively to unlisted companies. This particular proviso was inserted vide The Companies (Amendment) Act, 2017 effective from 03/01/2018

Essential Conditions for Availing the Relaxation

For an unlisted company to hold its AGM at any place in India, the following conditions must be satisfied:

1) The Company Must Be an Unlisted Company

The relaxation is available only to unlisted companies. Listed companies continue to be governed by the general provisions regarding the location of AGM and cannot rely on this proviso.

2) Consent Must Be Obtained from All Members (Unanimous/100%)

The law specifically requires consent from all members of the company. The requirement is unanimous consent and not merely a majority approval.

Even if one member withholds consent, the company cannot invoke this relaxation and must hold the AGM at the registered office or within the city, town, or village where the registered office is situated.

3) Consent Must Be Obtained in Advance

The consent should be obtained before convening the AGM. The objective is to ensure that members are aware of and agree to the proposed venue before notices are issued or meeting arrangements are finalized.

4) Consent May Be Given in Writing or Through Electronic Mode

The Companies Act expressly recognizes both:

• Physical written consent; and
• Electronic consent.

This provides operational flexibility and facilitates compliance where shareholders are geographically dispersed.

Legislative Intent Behind the Provision

The proviso reflects a pragmatic approach adopted by the legislature. Many closely held unlisted companies have their registered office in one state, while the majority of promoters, directors, and shareholders may reside in another location. Requiring all shareholders to travel to the registered office merely for compliance purposes could impose unnecessary costs and inconvenience.

By permitting AGMs to be held anywhere in India with unanimous shareholder consent, the law balances shareholder protection with administrative convenience.

Important Legal Distinctions & Context

Venue Relaxation (Section 96) vs. Shorter Notice (Section 101)

Obtaining unanimous consent to shift the venue under Section 96(2) does not automatically shorten the mandatory 21-day notice period required under Section 101(1). If a company intends to hold the AGM outside its registered city and on shorter notice, it must obtain two distinct consents:

• Section 96(2): Unanimous (100%) consent for the venue.
• Section 101(1): Consent from at least 95% of members entitled to vote for shorter notice.

Physical AGMs vs. Virtual / VC Meetings

Under Ministry of Corporate Affairs (MCA) circulars allowing AGMs via Video Conferencing (VC) or Other Audio Visual Means (OAVM), the venue of the meeting is deemed to be the registered office of the company. Therefore, prior consent under Section 96(2) is required only for physical AGMs held outside the registered office’s city, town, or village.

Practical Illustration

Scenario A (Permitted)

ABC Private Limited has its registered office in Kolkata. The company has four shareholders, all of whom reside in Mumbai. The company wishes to hold its AGM in Mumbai instead of Kolkata.

If all four shareholders provide their consent in writing or through electronic mode before the AGM, the company may legally convene its AGM in Mumbai.

Scenario B (Not permitted)

XYZ Private Limited has ten shareholders. Nine shareholders consent to holding the AGM in Bengaluru, while one shareholder refuses.

In this scenario, the company cannot avail itself of the exception because unanimous consent is absent. The AGM must be conducted in accordance with the general rule prescribed under Section 96(2).

Best Practices for Companies

Although the Act does not prescribe a specific format for obtaining consent (a sample draft is given below for reference), companies should adopt the following best practices:

A) Maintain Documentary Evidence

Preserve signed letters, emails, electronic confirmations, or other records demonstrating member consent.

B) Obtain Consent Prior to Issuance of Notice

Ideally, the consent process should be completed before the AGM notice is circulated.

C) Record the Consent in Board Minutes

The Board of Directors should take note of the consents received and authorize holding the AGM at the proposed venue.

D) Mention the Basis in the Notice

The AGM notice may include a statement that the meeting is being held at a location outside the registered office city pursuant to the proviso to Section 96(2) and with the advance consent of all members.

Consequences of Non-Compliance

Holding an AGM outside the permissible territorial limits without 100% advance consent invalidates the meeting. Any business transacted (adoption of financial statements, director appointments, dividend declarations) becomes legally voidable. Furthermore, under Section 99 of the Companies Act, 2013 (Punishment for default in complying with provisions of section 96 to 98), the company and every officer in default are liable to a fine which may extend to Rs. 1,00,000, with a continuing fine of up to Rs. 5,000 per day for as long as the default continues.

Conclusion

The proviso to Section 96(2) balances regulatory oversight with administrative practicality. By allowing unlisted entities to meet anywhere in India upon unanimous consent, the law accommodates corporate realities without compromising shareholder protection. The key requirement, however, is unanimous advance consent. Companies seeking to utilize this relaxation should ensure proper documentation and compliance to avoid any challenge to the validity of the AGM.