{"id":822,"date":"2019-10-25T10:03:59","date_gmt":"2019-10-25T10:03:59","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=822"},"modified":"2024-07-02T14:28:53","modified_gmt":"2024-07-02T08:58:53","slug":"annual-general-meeting","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/","title":{"rendered":"Know all about Annual General Meeting as Per Companies Act 2013"},"content":{"rendered":"\n<p class=\"has-drop-cap\">An Annual General\nMeeting is that time of the year in a company when all the important officials\nof the company come together and make important decisions on matters of the\ncompany.&nbsp; Furthermore, it is mandatory for every company except OPCs to\nhold the AGM every year, as specified under Section 96 of the Companies Act,\n2013. This blog is a perfect guide for young startup companies who do not know\nmuch about company compliances and can help them avoid failure.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/#Type_of_Meetings_in_a_Company\" >Type of Meetings in a Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/#What_is_an_Annual_General_Meeting_AGM\" >What is an Annual General Meeting {AGM}?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/#When_and_where_should_the_AGM_be_conducted\" >When and where should the AGM be conducted?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/#What_is_the_Purpose_of_Holding_an_Annual_General_Meeting\" >What is the Purpose of Holding an Annual General Meeting?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/#Issues_Covered_in_the_AGM\" >Issues Covered in the AGM<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/#Notice_for_Annual_General_Meeting\" >Notice for Annual General Meeting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/#What_are_the_Legal_Requirements_for_Holding_an_AGM\" >What are the Legal Requirements for Holding an AGM?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/#First_Annual_General_Meeting\" >First Annual General Meeting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/#Extension_of_Time_for_Holding_AGM\" >Extension\nof Time for Holding AGM<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/#Consequences_of_conducting_an_AGM_after_the_due_date\" >Consequences of conducting an AGM after the due date<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/#In_Summary\" >In Summary<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Type_of_Meetings_in_a_Company\"><\/span>Type of Meetings in a Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Generally,&nbsp;meetings in a company&nbsp;are categorized based upon the type of members of the company meeting. With this in mind, meetings in a company can be grouped as, one involving the&nbsp;<strong>Directors<\/strong>&nbsp;of the company and the second in which the&nbsp;Shareholders&nbsp;of the company partake in the meeting. Furthermore, there are two types of meetings involving the Shareholders are as follows;<\/p>\n\n\n\n<ul>\n<li><strong>Annual General Meeting (AGM)<\/strong><\/li>\n\n\n\n<li><strong>Extraordinary General Meeting (EGM)<\/strong><\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" width=\"520\" height=\"445\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/03\/image-16.png\" alt=\"Type of Meetings in a Company\" class=\"wp-image-27942\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/03\/image-16.png 520w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/03\/image-16-300x257.png 300w\" sizes=\"(max-width: 520px) 100vw, 520px\" \/><\/figure><\/div>\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_an_Annual_General_Meeting_AGM\"><\/span>What is an Annual General Meeting {AGM}?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An Annual General\nMeeting, also known as AGM or annual meeting, is a meeting of the general\nmembers in an organization. Generally, an Annual General Meeting includes the\nmember associations and companies with&nbsp;<strong>Shareholders<\/strong>.<\/p>\n\n\n\n<p>As per the Companies Act, 2013, every company except&nbsp;<a href=\"https:\/\/corpbiz.io\/one-person-company\"><strong>One Person Companies<\/strong><\/a>&nbsp;are required to hold a general meeting called the&nbsp;<strong>\u2018Annual General Meeting\u2019<\/strong>&nbsp;every year. For conducting an AGM<strong>,&nbsp;<\/strong>a&nbsp;<strong>\u2018Notice\u2019<\/strong>&nbsp;is given to all the shareholders,&nbsp;<strong>21 days<\/strong>&nbsp;prior to the meeting. Moreover, the gap between two consecutive AGMs must not be more than&nbsp;<strong>fifteen months<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_and_where_should_the_AGM_be_conducted\"><\/span>When and where should the AGM be conducted?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The First AGM should be\nheld within a period of&nbsp;<strong>nine months<\/strong>&nbsp;from the date of the\nclosure of the first financial year of the company. However, in the case of\nconsecutive AGMs, it should be held within a period of&nbsp;<strong>six<\/strong>&nbsp;<strong>months<\/strong>&nbsp;from\nthe date of closure of the financial year.<\/p>\n\n\n\n<p>Furthermore, an AGM is conducted at a day which is not a&nbsp;<strong>National Holiday<\/strong>. Additionally, such day should be conducted in the business hours, i.e. between&nbsp;<strong>9 AM to 6 PM<\/strong>. Additionally, it should be held either at the&nbsp;<strong>registered office<\/strong>&nbsp;of the company or at a place that is within the city, town or village in which the registered office is located.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Purpose_of_Holding_an_Annual_General_Meeting\"><\/span>What is the Purpose of Holding an Annual General Meeting?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The primary purpose of\nholding an Annual General Meeting is to allow the Shareholders to vote on\nmatters like the company issues, selection of board directors of the company\nand informing the members about the previous or future activities of the\ncompany. Additionally, in big companies, it is the only time of the year where\nall the shareholders of the company sit and interact on various issues.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Issues_Covered_in_the_AGM\"><\/span>Issues Covered in the AGM<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The major agendas\ncovered in the Annual General Meeting are as follows;<\/p>\n\n\n\n<ul>\n<li>Annual accounts<\/li>\n\n\n\n<li>Dividend among shareholders<\/li>\n\n\n\n<li>Director\u2019s report\/auditor\u2019s report<\/li>\n\n\n\n<li>Appointment\/remuneration of statutory auditors<\/li>\n\n\n\n<li>Appointment\/ replacement of directors&nbsp; <\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Due Date of AGM<\/h3>\n\n\n\n<p>As per the provisions of\nthe Companies Act, there are three conditions for conducting the AGM. These\nconditions can be listed as;<\/p>\n\n\n\n<ul>\n<li>The time period between two &nbsp;consecutive AGMs should not be more than 15 months<\/li>\n\n\n\n<li>It should be conducted every year<\/li>\n\n\n\n<li>Six months from the date of closing of the financial year<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Quorum for AGM<\/h3>\n\n\n\n<p>The quorum or number of\nmembers for an Annual General Meeting is as follows;<\/p>\n\n\n\n<ul>\n<li><strong>Private Companies<\/strong>: Minimum of two members within half an hour of the commencement of the annual meeting.<\/li>\n\n\n\n<li><strong>Public Companies<\/strong>: At least five members should be present.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Notice_for_Annual_General_Meeting\"><\/span>Notice for Annual General Meeting<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The notice for the\ncommencement of the AGM should be sent to all the members at least <strong>21 days<\/strong> before the meeting along with\nthe annual report of the company. However, a shorter notice can be provided\nafter taking consent from all the members who are entitled to vote at the\nmeeting.&nbsp; &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Legal_Requirements_for_Holding_an_AGM\"><\/span>What are the Legal Requirements for Holding an AGM?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Legally, the company\nsends a notice to all the members of the annual meeting, 21 days prior to the\nmeeting. However, there is an exception to this rule, and a special notice is\nissued for a shorter notice period, under specific conditions. Furthermore, the\nfollowing documents need to be sent along with the notice;<\/p>\n\n\n\n<ul>\n<li>A copy of the annual accounts of the company<\/li>\n\n\n\n<li>Report on the company\u2019s position in the provided year, prepared by the director<\/li>\n\n\n\n<li>Auditor\u2019s report of the annual accounts<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"First_Annual_General_Meeting\"><\/span>First Annual General Meeting<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The first\u00a0<strong>Annual General Meeting<\/strong>, as the name suggests, is held in the first year of the incorporation of a company. As per the provisions of the Companies Act, 2013, it should be commenced within nine months from the date of the closure of the first financial year of the company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Subsequent Annual General Meeting<\/h3>\n\n\n\n<p>There is a provision to\nconduct the Subsequent AGM within six months from the date of the end of the\ngiven financial year as per the Companies Act.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Exemption of Holding AGM<\/h3>\n\n\n\n<p>Provided under Section\n96, Sub-section 1 of the Companies Act, 2013 <strong>One Person Companies<\/strong> do not need to hold an Annual general meeting.\nHowever, they have to pass a resolution as prescribed in Section 122 of the\nCompanies Act. &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Extension_of_Time_for_Holding_AGM\"><\/span>Extension\nof Time for Holding AGM<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For an extension of time for holding an AGM the company shall apply with\nan e form GNL-1 mentioning the reasons behind seeking extension and the time\nperiod for which such extension is required by the company. The Registrar of\nCompanies is the competent authority to extend the time by three months to hold\nan AGM. The RoC shall record the reasons behind giving the extension as it is\nrare situation and without an urgent reasonable ground no such extension is provided\nto hold the first annual general meeting.<\/p>\n\n\n\n<p><strong>After the Meeting procedure <\/strong><\/p>\n\n\n\n<ul>\n<li>The minutes of the proceedings shall be prepared and recorded and within 30 days from the meeting the minutes have to be signed by the chairman.<\/li>\n\n\n\n<li>Within 30 days from the appointment of directors an intimation of the appointment shall be sent by filing form DIR-12 to the company\u2019s registrar together with the applicable fee.<\/li>\n\n\n\n<li>Within 30 days of the meeting the copies of special resolution and others shall be filed together with the form MGT-14 to the registrar of companies.<\/li>\n\n\n\n<li>It is important to file the balance sheet reports and the profit and loss account of the auditors and the directors and also the notice of the meeting in the form AOC-4 within 30 days from the meeting date.<\/li>\n\n\n\n<li>Deposit of the dividend distribution tax within the specific time limit and at the appropriate rate under the Income Tax Act.<\/li>\n\n\n\n<li>They shall forward the copy of the balance sheet to the RBI where public deposits were invited by the company.<\/li>\n\n\n\n<li>A separate bank account as \u201cDividend Account\u201d shall be opened and the total amount of dividend shall be deposited within the time period of five days.<\/li>\n\n\n\n<li>Dividend warrants and a notice of dividend to be signed by the authorised persons.<\/li>\n\n\n\n<li>Within 60 days of the meeting in form MGT-7 the annual return shall be filed with the registrar of companies and in Form MGT-8 there should be the certificate of the company secretary and to verify that the annual return is signed by the company secretary.<\/li>\n\n\n\n<li>In the cases of listed companies- Within 30 days of the meeting, in form MGT-15 an annual general meeting report should be submitted to ROC.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Consequences_of_conducting_an_AGM_after_the_due_date\"><\/span>Consequences of conducting an AGM after the due date<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Under the provisions of\nthe Companies Act, companies need to hold the AGM within the specified time.\nAdditionally, failing to do so may lead to legal consequences, including\nfinancial punishments.<\/p>\n\n\n\n<p>Furthermore, the\ndefaulting companies have to pay a fine of Rs. 50, 000. Moreover, a fine of Rs.\n2500 is levied per day for continuing the default.&nbsp;<\/p>\n\n\n\n<p>In case if the company\nis ordered to hold the AGM through a tribunal under section 97, such a company\nis liable for a penalty. In such a case, the company and every officer of such\ncompany is punishable for a fine which may extend to Rs. 1 lakh. Furthermore,\nin case of the continuance of such default, a fine of Rs. 5000 is levied per\nday in the company. &nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"In_Summary\"><\/span>In Summary<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The annual general meeting is obligatory compliance for companies in India. Moreover, companies not holding or conducting the AGM become liable for legal actions taken against them. Furthermore, at least five members in a&nbsp;<a href=\"https:\/\/corpbiz.io\/public-limited-company-registration\"><strong>Public Limited Company<\/strong><\/a>&nbsp;and two members in a Private Limited Company should personally attend the AGM. Also, the Companies Act specifies the time of holding an AGM in the business hours and on a day which is not a National Holiday.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/appointment-and-removal-of-auditor-in-a-privately-held-organization\/\">\nAppointment and Removal of Auditor in a Privately-held Organization\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>An Annual General Meeting is that time of the year in a company when all the important officials of the company come together and make important decisions on matters of the company.&nbsp; Furthermore, it is mandatory for every company except OPCs to hold the AGM every year, as specified under Section 96 of the Companies [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":825,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[120],"tags":[148],"acf":{"service_id":"321"},"authorName":"Tanya Verma","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2019\/10\/IMG-20190703-WA0001__01-150x150.jpg","authorDescription":"Tanya is working as writer &amp; editor from past 2 years with experience in covering startup and technology related topics.","postViews":12784,"readingTime":6,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/822"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=822"}],"version-history":[{"count":20,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/822\/revisions"}],"predecessor-version":[{"id":65064,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/822\/revisions\/65064"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/825"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=822"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=822"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}