{"id":100963,"date":"2020-08-05T10:19:00","date_gmt":"2020-08-05T10:19:00","guid":{"rendered":"https:\/\/legalwindow.in\/?p=100963"},"modified":"2021-11-20T17:54:27","modified_gmt":"2021-11-20T12:24:27","slug":"extension-of-agm-for-fy-19-20","status":"publish","type":"post","link":"https:\/\/www.legalwindow.in\/blog\/extension-of-agm-for-fy-19-20\/","title":{"rendered":"Extension of AGM for FY 19-20"},"content":{"rendered":"\r\n

In order to reduce the compliance burden on the corporate sector,\u00a0the Ministry of Corporate Affairs (MCA) has announced that the companies whose financial year has ended in December 2019, would be allowed to hold their first Annual General Meeting (AGMs)<\/a> within the first nine months of their current fiscal or September 30 without it being considered a violation of the\u00a0Companies Act.<\/p>\r\n\r\n\r\n\r\n

The above relaxation comes in account of the\u00a0coronavirus\u00a0pandemic (COVID-19) as many companies requested for leniency on the AGM rules owing to the social distancing norms and the nationwide lockdown that was in force till May, 2020 by PM Narendra Modi.<\/p>\r\n\r\n\r\n\r\n

\"Extension<\/figure>\r\n\r\n\r\n\r\n

Provisions of Holding AGM (Annual General Meeting) as per Companies Act, 2013<\/strong><\/h3>\r\n\r\n\r\n\r\n

According to\u00a0Section 96 of the Companies Act, 2013, an Annual General Meeting is hold by the Company every year in a following below mentioned intervals:<\/p>\r\n\r\n\r\n\r\n

\r\n
\"Provisions<\/figure>\r\n<\/div>\r\n\r\n\r\n\r\n

The AGM of any company is held by giving 21 days advance notice to all the members and not more than 15 months should be elapsed between two AGMs.<\/p>\r\n\r\n\r\n\r\n

The main purpose of holding\u00a0Annual General Meeting\u00a0is to obtain approval of financial statements from the members of the company. Other than this, ordinary as well as special business also transacted at the Annual General Meeting. As per the Companies Act, 2013, all companies, other than One Person Company (OPC)<\/a>, must hold a general meeting each year apart from other meetings as the AGM.<\/p>\r\n\r\n\r\n\r\n

Applicability and scope of the MCA Circular<\/strong><\/h3>\r\n\r\n\r\n\r\n

The AGM Circular applies to all the AGMs to be called by companies within the calendar year 2020. In simple words, all the companies will call their AGM for the financial year 2019-2020 in the calendar year 2020 only. Therefore, one may conclude that this AGM Circular can be availed by all the companies without any exception.<\/p>\r\n\r\n

\"ROC<\/a><\/p>\r\n\r\n

Condition for companies laid down by MCA in circular<\/strong><\/h3>\r\n\r\n\r\n\r\n
    \r\n
  • MCA has mentioned a specific condition for companies that they cannot provide e-voting facility, to call their AGMs under this relaxation<\/li>\r\n
  • Further, Companies can conduct their AGM through VC (Video Conferencing) only if the company has in its record, the email-ids of at least half of its total number of members, who:<\/li>\r\n
  • in case of a Nidhi Company, hold shares of more than one thousand rupees in face value or more than one per cent. of the total paid-up share capital, whichever is less;<\/li>\r\n
  • in case of other companies having share capital,\u00a0who represent not less than seventy-five per cent. of such part of the paid-up share capital of the company as gives a right to vote at the meeting;<\/li>\r\n
  • in case of companies not having share capital,\u00a0who have the right to exercise not less than seventy-five per cent. of the total voting power exercisable at the meeting<\/li>\r\n
  • \u00a0Entities like public sector banks will not be covered under this circular.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n

    Advantages of conducting AGM through VC mode<\/strong><\/h3>\r\n\r\n\r\n\r\n
      \r\n
    • Helps in maintaining social distancing<\/li>\r\n
    • Less time consuming process;<\/li>\r\n
    • Operating convenience;<\/li>\r\n
    • Saving in Cost<\/li>\r\n
    • Environment friendly;<\/li>\r\n
    • Sooner getting the advantage of last audited accounts;<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n

      Provision of extension of AGM<\/strong><\/h3>\r\n\r\n\r\n\r\n

      As per\u00a0Section 96(1) of the Companies, Act, 2013, the Registrar of Companies (ROC) may extend the time limit of holding AGM up to maximum period of three months; however extension doesn\u2019t apply on first AGM. In order to apply for extension, an application needs to be submitted in\u00a0e-form GNL-1.<\/p>\r\n\r\n\r\n\r\n

      Penal Provisions \u2013 Defaulting in Convening AGM<\/strong><\/h3>\r\n\r\n\r\n\r\n

      Penalty provisions regarding the default made in holding AGM are defined under\u00a0Section 99 of the Companies Act, 2013, as per which every office officer in default shall be punishable with fine which may extend to Rs. 1,00,000\/- while in case of continuing default it will go up to Rs. 5,000\/- per day.<\/p>\r\n\r\n\r\n\r\n

      Takeaway<\/strong><\/h3>\r\n\r\n\r\n\r\n

      The circular issued on 21st April 2020 notifies that companies whose financial year (other than first financial year) ended on 31st December, 2019, can convene their AGM within nine months from the closure of the financial year (i.e. by 30th September, 2020), and it shall not be viewed as a violation. From the above discussion, we can say that it is a welcome move by the MCA keeping in mind the difficulty faced by stakeholders due to COVID-19 and following social\u00a0distancing norms and consequential restrictions.<\/p>\r\n\r\n\r\n\r\n

      For more information on the above extension, contact Legal Window now.<\/p>\r\n","protected":false},"excerpt":{"rendered":"

      In order to reduce the compliance burden on the corporate sector,\u00a0the Ministry of Corporate Affairs (MCA) has announced that the companies whose financial year has ended in December…<\/p>\n","protected":false},"author":3,"featured_media":100967,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-100963","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-law"],"yoast_head":"\nExtension of AGM for FY 19-20 » Legal Window<\/title>\n<meta name=\"description\" content=\"Read about Extension of AGM for FY 19-20, Condition for companies laid down by MCA in circular, Advantages of conducting AGM through VC mode, etc.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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