Update:
Clarification of holding of Annual General Meeting (AGM) through Video Conference (VC) or Other Audio Visual Means (OAVM)-reg
With reference to Ministry’s General Circular Nos. 20/2020 dated 05.05.2020, General Circular No. 02/2021 dated 13.01.2021, General Circular No. 19/2021 dated 08.12.2021 and 21/2021 dated 14.12.2021, it has been decided to allow the companies whose AGMs are due in the Year 2022, to conduct their AGMs on or before 31st December, 2022 in accordance with the requirements laid down in Para 3 and Para 4 of the General Circular No. 20/2020 dated 05.05.2020.
It is clarified that this Circular shall not be construed as conferring any extension of time for holding of AGMs by the companies under the Companies Act, 2013 (the Act) and the companies which have not adhered to the relevant timelines shall be liable to legal action under the appropriate provisions of the Act.
This issues with the approval of the Competent Authority.
AGM is the Annual General Meeting, so the nomenclature itself suggests that it needs to be held every year i.e. annually.
Section 96 of the Companies Act 2013 says that AGM should be held in 9 months from the closing of the Financial Year in case of FIRST AGM. In any other case, it should be held within a period of 6 months from the date of closing of the Financial Year. Hence benefit is given only in the first year, and in any other year, there is no exception.
If in subsequent years, a company is not able to call the AGM within the due date, the extension needs to be applied with the Registrar of Companies. No extension is given in the case of the first AGM.
For subsequent AGM extension can be given maximum for a period of 3 months.
Now everywhere the time limit is calculated from the end of Financial Year, so it’s important to understand the definition of “Financial Year” as per Companies Act, 2013.
Financial year
As per section 2(41) of the Companies Act, 2013 Financial year means the period ending on the 31st day of March. And where the Company is incorporated on or after the 1st Day of January in a year, the financial year will end on the 31st day of March of the following year.
Hence the time limit of 6 months or 9 months needs to be calculated from the end of March Month.
Here, we can understand the same with an Example
1. Suppose the Company is incorporated on 19.01.2022, it has the option to close the FY in March 2022 or March 2023, as it is incorporated on or after the 1st day of January.
So if the Company opts to close the FY in March 2022 then the AGM due date will be 31st December 2022.
And if it opts to close the FY in March 2023 then the AGM due date will be 31st December 2023.
2. If the Company is incorporated on 15.06.2021, then the only option it has is to close the FY in March 2022 and the AGM due date will be 31st December 2022.
Above were some know how's on AGM. I hope this article was beneficial to you.
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