ANNUAL GENERAL MEETING

Annual general meeting (AGM) is the meeting which is hold once in a year, any general meeting hold between two AGMs is called "extra ordinary general meeting". The most commonly asked questions about AGM is the time limit for holding AGM, provisions for extension of AGM and the consequences of not holding an AGM within the specified time limit.

TIME LIMIT FOR HOLDING FIRST AGM:

Ø  UNDERS SECTION 166 of the Companies Act, 1956: Within 18 months of incorporation;

Ø  UNDERS SECTION 210 of the Companies Act, 1956: Within 9 months of the end of the first financial year;

Whichever is earlier.

Now suppose the date of incorporation of a company is 10^th July, 2012, and the first financial year ended on 31^st March, 2013; it will have to held its first AGM latest by:

UNDERS SECTION 166: 9^th January, 2014;

UNDERS SECTION 210: 31^st December, 2013;

Latest by 31^st December, 2013.

TIME LIMIT FOR HOLDING SUBSEQUENT AGMs:

Ø  UNDERS SECTION 166 of the Companies Act, 1956:

a)      There shall be at least one annual general meeting in one calendar  year, i.e. one meeting between January to December of every year;

b)      There shall not be more than fifteen months gap between two AGMs;

Ø  UNDERS SECTION 210 of the Companies Act, 1956:

The AGM must be held within 6 months of the end of the financial year.

Suppose the company hold its first AGM on 31^st December, 2013. And the financial year is 31^st March ending. The next AGM must be hold by:

UNDERS SECTION 166: a) one AGM in the year 2014 i.e. latest by 31^st December, 2014;

            b) Latest by 30^th March, 2015;

i.e. latest by 31^st December, 2014 as per section 166.

UNDERS SECTION 210: Latest by 30^th September, 2014.

Thus the Company will have to hold its second AGM latest by 30^th September, 2014.

PROCEDURE FOR EXTENSION OF AGM’S TIME LIMIT:

If the company not be able to hold the AGM within the specified time limit it must apply to the ROC before expiry of the specified time limit for extension of time limit for holding AGM (not being the first annual general meeting), as per the provisions of section 166 of the companies act, 1956, on being satisfied with the reason of not holding of AGM within the specified time limit, ROC may grant an extension of three months, but this is a discretionary power of ROC.

Consequences of not holding AGM within the specified time limit:

Under section 168 of the Companies Act, 1956 it has been mentioned that if a company defaults in compliance of provisions regarding holding of AGM, every officer of the Company who is in default, shall be punishable with fine which may extend to Rs. 50,000 and in case of continuing default for a further fine of Rs. 2500 for each day of default.