Background

Every company is required to hold, during every Calendar Year, a Meeting of its Members called the Annual General Meeting. Every company incorporated under the Companies Act except One Person Companies, Companies licensed under Section 8 and specified International Financial Services Centres (IFSC) companies shall observe Secretarial Standards SS-2 with respect to the General Meetings. As part of the STATUTORY COMPLIANCE FACILITATION KIT, this tutorial notes on Annual General Meetings is meant to facilitate compliance under Companies Act, 2013 of a Private Limited Company.

References

  • 1. Section 96, 99 and 118 of the Companies Act, 2013
  • 2. Secretarial Standard-2 (SS-2) under Section 118 (10) of Companies Act 2013
  • 3. Companies (Management and Administration) Rules, 2014

Key Provisions

  • Convening a Meeting: A General Meeting shall be convened by or on the authority of the Board. The authority to convene a General Meeting of the company is with the Board.
  • Notice: Notice specifying the day, date, time and full address of the venue of the Meeting in writing of every Meeting shall be given at least twenty-one clear days in advance or as provided in the Articles of the Company to every Member of the company and also to every person entitled to such Notice.
  • Frequency of Meetings: Every company shall hold its first Annual General Meeting within nine months from the date of closing of the first financial year of the company and thereafter in each Calendar Year within six months of the close of the financial year.
  • Quorum: Unless the Articles provide for a larger number, the Quorum for a General Meeting of a private limited company shall be two Members personally present. Personal presence necessary to constitute Quorum. Quorum shall be present throughout the Meeting.
  • Proxies: A Member entitled to attend, and vote is entitled to appoint a Proxy to attend and vote instead of himself and a Proxy need not be a Member.
  • Voting: Only those Members entitled to vote either in person or, where permissible, through authorised representative or Proxy, can participate in the voting process. The voting process may be through show of hands, ballot process, e-voting or voting by postal ballot.
  • Minutes: ‘Minutes’ are the official recording of the proceedings of the Meeting and the business transacted at the Meeting. Every company shall keep Minutes of all Meetings. Minutes of all Meetings shall be preserved permanently in physical or electronic form with Timestamp.
  • Disclosure: Form No. MGT-7 (Format of Annual Return) prescribed by MCA requires all companies to disclose the dates of all General Meetings held during the financial year, total number of Members entitled to attend the Meeting, and number of Members who attended the Meeting along with their total shareholding.
  • Implications of non-compliance: The Company and every officer of the company who is in default shall be punishable with fine which may extend to Rs. 1.00 lakh and in the case of a continuing default, with a further fine which may extend to Rs.5,000 for every day during which the default continues. Default in holding of AGM can be compounded under Section 441 of the Act.

CHECK-LIST OF ACTIVITES

Sl.No Activity Requirement
1 Notice Notice in writing of Meeting shall be given at least twenty-one clear days in advance, unless the Articles prescribe a longer period
2 Quorum Unless the Articles provide for a larger number, the Quorum for a General Meeting shall be two Members e in the case of a private company.
3 Minutes Minutes of all Meetings shall be kept and preserved permanently in physical or electronic form.
4 Disclosure Form No. MGT-7 prescribed by MCA requires all companies to disclose the details of all General Meetings held during the financial year.

For any further clarifications or assistance, get in touch with us.

This tutorial notes on Annual General Meetings is not intended to be a form of solicitation or advertising. The information contained in this update is of a general nature. Users of this information are expected to refer to the relevant existing provisions of the Companies Act, 2013.