Extension of AGM

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 August 2010 Hi friends

What can be the grounds for extension of AGM

Its urgent

Thanks

But in my case I already took extension on the same ground last year now I want some other grounds on which I can file extension application. please help

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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03 August 2010 The second proviso to section 166(1) empowers the Registrar to extend time for holding an annual general meeting if it cannot be held within the time-limit laid down by this section "for any special reason". Therefore, if in any year a company cannot hold its annual general meeting within the period limit stipulated in section 166(1), as stated above, it may hold the meeting within the next three months with the permission of the Registrar of Companies. No extension of time can be granted by the Registrar (or by any other authority) beyond three months.

No extension of any period can be granted by the Registrar (or by any other authority) for holding the first annual general meeting. Therefore, the first annual general meeting must be held within 18 months from the date of incorporation.

The Registrar will not grant extension unless there is some "special reason" for not holding the meeting within the stipulated period. Delay in the completion of audit of accounts is not a "special reason". However, if due to some unforeseen and unexpected difficulty beyond the control of the company due to which in spite of planning and efforts it could not complete the audit that will be a special reason for obtaining extension of time.

The DCA's view is that the Registrar should grant an extension of time for holding the annual general meeting of a company only when the application for such extension is made to him before the expiry of the period laid down in sub-section (1) of this section.

The DCA has clarified that the liberal policy of granting extensions of time to companies to enable them to call their annual general meetings on the ground that the audit of the account has not been completed or that their account have not yet been compiled or cast for submission to the auditors or for other similar reasons indicating slackness, negligence or deliberate default on the part of the managements or the auditors of companies can no longer be justified. The law contemplates that the permissible interval between two consecutive annual general meetings should not be lightly extended. The Government has accordingly decided that delay in the completion of the audit of the annual accounts of a company should not ordinarily constitute a 'special reason' justifying the grant of extension of time for holding its annual general meeting. Companies are, therefore, requested to take all suitable steps to ensure that their annual accounts are audited in good time so that their annual general meetings may be called within the statutory time-limit.

On the question whether the Registrar can grant, extension of time though the company may not be able to hold its annual general meeting in a particular calendar year, the CLB has clarified that the power of the Registrar conferred by the second proviso of the aforesaid section of the Act enabling him to grant extension of time to hold the annual general meeting is exercisable by the Registrar of Companies without restriction or qualification upto a limit of 3 months. He can, therefore, grant extension of time for special reasons upto the maximum limit of 3 months, even if such extension allows the company to hold its annual general meeting beyond the calendar year.

It must be noted that as per Citizens Charter of the Department of Company Affairs Schedule III, Serial No.5, the said application will be processed by the ROC within 10 days.[ No.5/25/99-CL-V; Press Note No.9/99 dated 9-8-1999.

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