What is Annual General Meeting?
An Annual General Meeting (AGM) is held between the management and the shareholders of the company to have an interaction about the company’s business affairs. The Companies Act, 2013 has made it a compulsory statutory regulation to hold an Annual General Meeting to discuss the yearly results, auditor’s appointment, director’s appointment, etc. In an AGM, the shareholders with voting rights vote on the agenda, which is brought to the floor, and the management presents the financial statements of the company along with the auditor’s report.
The Companies Act, 2013 has established provisions regarding the conduct of the Annual General Meeting. Shareholders use the AGM as a platform to make the management aware of their views and concerns about the affairs of the company. Conducting Annual General Meetings is important as they ensure transparency about business affairs, provide a platform to include shareholders, and hold management accountable. All companies except the OPC are required to hold an AGM.
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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