Process of Extension of holding Annual General Meeting

Section 96 of the Companies Act, 2013 provides that each company other than a one person company will in every year hold an Annual General Meeting of its investors and not over 15 months will exceed between the date of one Annual General Meeting of the company and that of the next.

Procedure to file application for extension of time for holding AGM

As provided under Section 96 of the Companies Act, 2013, each Company other than a One Person Company will in every year hold notwithstanding some other meetings, a general meeting as its Annual General Meeting. Not over 15 months will slip by between the date of one Annual General Meeting of a company and that the next.

In case of first Annual General Meeting, it shall be held within 9 months from the date of ending the first financial year of the Company. In some other cases, annual general meeting will be held within 6 months from the date of closing of the financial year.

The Registrar may, for any exceptional explanation, extend the time inside which any annual general meeting, other than the first annual general meeting, will be held, by a period not surpassing 3 months.

Reasons for extension of holding of AGM

• Non-marking of fiscal reports because of non-accessibility of Auditors because of abdication, demise, inadequacy to sign or such other explanation.
• Non-availability of fiscal reports because of some other legitimate explanation.
• Non-marking of fiscal reports by the Managing Director because of non-accessibility of a Managing Director.
• Non-availability of Director.
• Abrupt passing of Directors, and because of this limit of directors goes under the minimum requirement of directors
• Such other substantial and valid reasons.

Procedure to file application for extension of time for holding AGM

• Chairman/head of a company will hold a meeting of the Board of Directors for which notice should be sent no less than 7 days before the gathering.
• To hold a general meeting on a set date.
• Pass a resolution for extension of time limit for AGM determining the reason behind the extension for holding of AGM.
• To file an application to the Registrar of companies in Form No-GNL1.
• In GNL-1, the reason for not holding AGM alongside essential information is to be given.
• To connect the copy of Board resolution in E structure GNL-1.
• Follow up with the office of Registrar of Companies.
• The registrar will analyze the application and may allow an expansion, whenever fulfilled.
• To acquire the certificate of grant of extension in holding AGM of the company.

Compounding for the offence of not holding AGM

Compounding of offence infers an instrument wherein the defaulter company settles default by paying the money rather than a prosecution, in this way avoiding litigation.

If the Annual General Meeting isn’t held inside the due date as referenced without applying for extension for holding of AGM with the Registrar of Companies then the company should apply for compounding of that offence with the National Company Law Tribunal (NCLT).

Section 441 of the Companies Act, 2013 relates to the compounding of offences. The offences which are culpable with fines and punishments must be compounded either by Regional Director (RD) or by the National Company Law Tribunal (NCLT).

Effects of grant of extension for holding Annual General Meeting

When the extension is being granted, the company might start the Annual General Meeting of the Company inside the period as permitted by the Registrar of Companies. Extension maybe granted just once in a Financial Year as the Act doesn’t permit the Registrar of Companies to give further extension.

Final Words

The Annual General Meeting (AGM) is a significant administration process for the members from an organisation. It can guarantee transparency, give updates and offer individuals a chance to vote on a scope of issues. The board should utilize the AGM to speak with financial investors and support their interest. It isn’t just a meeting of directors to introduce talks to investors, yet for investors to pose inquiries and discussion.