HOLDING OF AGM (ANNUAL GENERAL MEETING)

According to Section 96 of the Companies Act 2013 the first annual general meeting of the company shall be held within the period of 9 months from the date of the close of the financial year of a company and for existing companies within 6 months from the date of close of the financial year of a company. No extension of time period in holding the first AGM is allowed. Further the time gap between the holding of two AGM’s should not be more than 15 months.

There can be number of reasons for not holding AGM. Some of them may be:

• Non finalisation of annual accounts
• Falling of director below the numbers prescribed by the Act
• Not able to held AGM due to natural calamity
• Deficiency in the quorum of the annual general meeting

Failure to comply section 96:

If a company fails to comply with the provisions of Section 96 i.e., does not hold it’s AGM within the prescribed time then there are two possibilities:

1. Either tribunal under section 97 of the Act of 2013 can call the AGM

or

2. The members can directly call AGM of such company on the application made in this behalf.

This right of applying to the Tribunal is available only to the members of the company.

In case the members are directly applying to the Tribunal then the documents required are as follows:

List of documents required:

• Form: NCLT-1
• Affidavit verifying the petition
• Financial statements of company
• Proof of holding of annual general meeting
• Any other document as required.

Penalty

If the company fails to hold its AGM as per section 96 then The company and every officer of the company in default shall be carrying a punishment of fine which may extend to Rs 1 Lakh and with a further fine which may extend upto Rs 5000 for every day (in case of continuing default).

Compounding of offences

Default in holding of AGM can be compounded either by

a) The Tribunal (where the penalty of any offence surpasses 5 Lakh Rupees) or

b) Regional director (where the penalty of any offence does not surpass 5 Lakh Rupees).

Procedure for compounding

• Board meeting shall be called by giving at least 7 day’s notice
• Summon the Board Meeting of the company
• Passing of the resolution for extending the time for holding of the AGM also specifying the reason for the extension
• File an application for compounding to the Registrar (ROC) in the form (GNL-1) who shall forward the same to the NCLT OR Regional Director
• Registrar shall include its comments (if any) and further forward it to the Tribunal, RD or any other officer authorized by Central govt
• For personal hearing for the company RD/Tribunal shall fix the date and time.
• After hearing the matter RD/Tribunal shall pass the order.

Hearing will be done by the Regional Director/ NCLT and that can be attended by the director, secretary or officer of the company or by the authorized representative of CA, CS, CMA.

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