Annual General Meeting

May 4, 2023

This article has been written by Ms. Khushi Sarkhedi , a 1-year BA LLB student from AURO University.

An AGM also known as Annual General Meeting. So now what do we mean by Meeting? The term “meeting” means when a group of person or association who comes together on given notice and solves the particular problem on mutual understanding . AGM is a regular meeting of the member of a company which is hold annually under the companies Act 2013 here the agenda of meeting is already fixed and here only equity shareholders can sit in the meeting . during AGM a company’s performance is analysed and its future strategy is discussed . this is an opportunity for the shareholders to question the board get answers for unsatisfactory performance and challenges . equally an AGM is time to praise good return . voting shareholders vote on current issues such as the composition of the company’s board of directors , board remuneration , dividend payments and the election of auditors. Shareholders who do not attend the general meeting in person may cast proxy votes,which can generally be done online or by mail . shareholder meetings often provide time for shareholders to ask questions of the company’s directors . activist shareholders can use shareholder meetings as and opportunity to voice concerns . section 96 of the companies act 2013 comprises provision related to annual general meeting.

Legal provisions regarding AGM:

To be held each year: every company other than a one person company shall in each year (calendar year) hold an annual general meeting .
Time for holding First AGM: the first annual general meeting of a company must be held within 9 month from the date of closing of the first financial year of the company.
Gap between two AGM: the gap between any two AGM must not more than a period of 15 month except where the registrar grants the extension.
Time and day for meeting: the AGM must be held any day which is not a national holiday during business hours , that is between 9 a.m. and 6 p.m. .
Place of the meeting: company must call the AGM meeting either the registered office of the company or at some other place within the city in which the registered office of a company is situated.
Notice requirement: company must give at least 21 day’s written notice or through electronic mode to call an annual general meeting.
Statement of the business to transacted at AGM: a) the consideration of financial statement and the report of the board of the director and auditor. b) the declaration of dividend . c) the appointment of director in place of those who are retiring . d) the appointment and fixing of the remuneration of auditor of company .
Time of holding AGM: a) First annual general meeting : here when a company starts its business and it completes its first financial year then within 9 month a company has to held its meeting . b) subsequent annual general meeting : these meeting held within the 6 months from close of financial year . c) the interval between two annual general meeting : the maximum gap between two annual general meeting should be 15 months . d) extension of time for conducting annual general meeting : here company due to any reason is unable to conduct the meeting the they have to file an application to registra of office (ROF) with an valid reason and reason of incressing the duration of annual general meeting should must be clearly mentioned in application.
Authority to convene meeting : here all the rights of conducting all the meetings are with board of directors (BOD).

Members rights in Annual General Meeting :

Members of the company (including shareholder) are entitled to attend and vote at general meetings . members may vote through physical ballot , absentee ballot or electronic ballot . members may appoint proxies to attend and vote on their behalf at the general assembly. The power of attorney must be submitted in writing and signed by the member.

If the power of attorney is appointed by a shareholder the power of attorney must be signed and stamped by an authorized signatory of the company . members can choose a leader fromamong the members however , if the articles of incorporation appoint a chairperson , the chairperson presides over the general meeting .

Minutes of Annual General Meeting :

The minutes of the AGM means the written record of the proceedings of the meeting .

The company secretary will record the proceedings of the AGM. Where there is no company secretary any other person duly authorised by the board or by the chairman will record the proceedings the minutes book will kept at the registered office of the company or at such places approved by the board. Any member/shareholder of the company upon request to the company can inspect the minutes book of the AGM on paying the prescribed fee. Upon request the company will give a copy of the minutesof the AGM to the member within seven days of request.

If the minutes are not given by seven days of the request , the company shall be laiable to a penalty of Rs. 25,000 and every officer of the company who is in default shall be liable to a penalty of Rs. 5,000.

Quorum of Annual General Meeting :

In case of a partnership the general assembly shall have a quorum of two members present , for public companies there quorum is :

If the number of members is less than 1000 , 5 members will attend the meeting .
If the number of members is 1000 or more and less than 5000 , then 15 members will attend the meeting .
If the number of the members is 5000 or more then 30 members will attend the meeting .

If a quorum for the meeting is not within 30 minutes of the scheduled time , the meeting will be adjourned to the same day , same time and place the following week.

Reporting of Annual General Meeting :

After holding a general meeting , each public company must file a report of the general meeting on form MGT-15 within 30 days of the conclusion of the general meeting .

Consequences and penalties for not holding a general meeting:

If the company fails to hold a general meeting of shareholders within the stipulated time or an extended period , it may at the request of the arbitral tribunal itself or any of its directors or members ,order the holding of a general meeting of shareholders in accordance with its instructions.

If the company continues to fail to hold meetings as directed by the court , the company and the officers of the defaulting company will be fined up to INR 100,000.

However , the central government has the power to exempt a company from the provisions of the general assembly under coditions determined by the centeral government . therefore a company may hold general meeting outside india by applying to the central government to relax the provisions of the section 96 of the companies Act, 2013 to allow the holdin of general meetings outside india.

References:

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May 4, 2023