Legal Requirement for Holding an Annual General Meeting
Provisions related to the Annual General Meetings (AGMs) are mentioned in Section 96 of the Companies Act, 2013. This section defines all the general requirements for companies to hold an AGM, specifies the timeline for conducting it, and also discusses the provisions related to the first AGM for newly incorporated companies.
1. First AGM for New Companies: As per the provision, for a newly incorporated company, the first AGM should be held within nine months from the closing of its first financial year. It is worth noting that a company can’t seek an extension to hold the first AGM.
2. AGM for Other Companies (not their first AGM): AGMs are required to be conducted within six months from the end of the financial year. When a company fails to hold its AGM within the stipulated time as per the act, it has to seek an extension by the tribunal.
3. Maximum Allowable Time Gap: According to the Companies Act, 2013, there should not be a gap of more than 15 months between two consecutive AGMs. This provision is stated under Section 96(1).
4. Timing and Location of AGM: Every AGM should be held during business hours on a day;i.e., between 9 a.m. to 6 p.m., that is not a national holiday. The AGM of the company can take place at the registered office of the company or another location within the city, town, or village where the registered office of the company is situated. Unlisted companies have the option to hold the AGM anywhere in India if all members consent in advance. This provision is mentioned in Section 96(2).
5. Notice for the Meeting: The notice of the AGM should be sent in writing through speed post or electronic mode at least 21 days before the meeting. If the company has a website, the notice is to be hosted on the website as well. The notice shall be sent to the latest known address of the shareholder.
6. Meeting on Shorter Notice Period: The company can call for an AGM at a notice period of less than 21 days if 95% of the shareholders give their consent to hold such a meeting. Consent may be shared via writing or electronic means.
7. Content of the Notice: The notice should include, the venue of the meeting; the day, time, and date of the meeting; agenda items to be discussed; the date of issuing the notice; signature of the convener.
8. Maintain the Minutes Book: The company is required to maintain the minutes of the AGM and details of resolutions passed by postal ballot. It shall be signed by the chairperson and maintained in a book within thirty days of the conclusion of the meeting. The pages of the minutes must be consecutively numbered.
9. Resolution Filing: The company is required to file all the resolutions passed during the AGM, along with the explanatory statement. Form MGT-14 is used to do the filing with the ROC as per the provisions of Section 117(1) of the Companies Act, 2013. Any special resolutions or other resolutions passed should be filed within thirty days of passing.
10. Reporting of the AGM: Once the AGM is conducted, every listed company has to file a report on the AGM in form MGT-15, along with all the resolutions passed in the meeting and the explanatory statement, within thirty days from the conclusion of the AGM. This is provided under Section 121(1) of the Companies Act, 2013.
Annual General Meeting: Meaning, Legal Requirements and Quorum
Annual General Meeting (AGM) is a yearly meeting of the company’s shareholders, stockholders, members, firms and organizations. Annual General Meeting (AGM) is held every financial year and it is mandatory for everyone to attend. A company is one of the most popular types of business arrangements in India and is widely selected by entrepreneurs and non-individual entities to run businesses and achieve their objectives. In India, the Companies Act, 2013 is the umbrella act regulating companies and all related compliances. The purpose of forming the Companies Act is to provide a legal framework for the formation of companies, covering the strata of incorporation, compliance, accountability, management, administration, etc.
Section 2(20) of the Companies Act, 2013 defines a company as a “Company incorporated under this act or any previous company law.”
Geeky Takeaways:
- A company is an artificial person created by law and has a separate legal entity, perpetual succession, a common seal, and limited liability.
- As members manage the affairs of the company, it is required that they all gather along with all the office bearers of the company and discuss performance, targets, upcoming action plans, etc.
- In the Annual General Meeting, functions like reviewing company accounts, approving audited accounts, elections, and financial records of the past year are discussed.
Table of Content
- Legal Requirement for Holding an Annual General Meeting
- Quorum for the Annual General Meeting
- Issues undertaken at the Annual General Meeting
- Conclusion
- Frequently Asked Questions (FAQs)
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