Annual general meeting (AGM) is an important meeting that is held annually, where members of the company get an opportunity to discuss the activities of the company. As per Section 96 of the companies Act,2013 every company, except one-person companies shall hold an annual general meeting every year. The Board shall, every year, hold an Annual General Meeting( AGM) for the members of the company to transact items of ordinary business specifically required to be transacted at an annual general meeting (AGM) as well as a special business if any. If the Board fails to hold an Annual General Meeting (AGM) in any year, any Member of the company may approach the prescribed authority, which may then direct the calling of the Annual General Meeting of the company. One-person company is exempt from holding an AGM.
Following are the key provisions regarding the holding of an Annual General Meeting (AGM):
- Annual general meetings (AGM) should be held once in each calendar year.
- The first annual general meeting (AGM) of the company should be held within 9 months from the closing of the first financial year. Hence it is not necessary to hold an annual general meeting (AGM) in the year of its incorporation.
- Subsequent annual general meetings (AGM) of the company should be held within 6 months from the date of closing of the relevant financial year.
- The duration between two annual general meetings(AGMs) cannot exceed 15 months.
Additionally, for the top 100 listed entities by market capitalization, determined as on March 31st of every financial year, shall hold their annual general meetings within a period of 5 months from the last date of the financial year.
The top 100 listed entities shall provide one-way live webcasts of the proceedings of the annual general meetings. The top 100 entities shall be determined on the basis of market capitalization, as at the end of the immediate previous financial year.
Extension of the validity period of AGM
In case, it is not possible for a company to hold an annual general meeting(AGM) within the prescribed time, the Registrar may, for any special reason, extend the time within which any annual general meeting shall be held. Such an extended period cannot exceed 3 months. The extension cannot be given by the Registrar for holding the first annual general meeting(AGM).
Date, Time and place for holding an annual general meeting
- An annual general meeting can be called during business hours, that is, between 9 a.m. and 6 p.m. on any day other than a National Holiday.
- Meetings should 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 situated. The Central Government (CG) is empowered to exempt any company from these provisions.
- Annual general meeting (AGM) 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 of the company in advance.
- In the case of Government Company, the Central Government (CG) may approve such another place for holding AGM, if the place is other than the registered office.
- In case of Section 8 Company, the time, date and place of each AGM are decided upon before-hand by the Board having regard to the directions, if any, given in this regard by such company in the general meeting “National Holiday” for this purpose means and includes a day declared as National Holiday by the Central Government.
Penalty for default in holding the annual general meeting
As per section 99 of the companies Act, 2013 if any default is made in holding a meeting of the company, the company and every officer of the company who is in default shall be punishable with fine which may extend to Rs. 1,00,000 and in case of continuing default, with a further fine which may extend to Rs. 5,000 for each day during which such default continues.