Stay in the Know: Complying with Companies Act Requirements at your Annual General Meeting
Is gathering or assembly or getting together of a number of persons for transacting any law full business treated as meeting? Yes, it is a meeting but it is treated as validly held only when it is convened and held in accordance with companies act 2013.
What is Annual General Meeting?
The Annual General Meeting (AGM) is a yearly gathering of a company's shareholders, board of directors, and other stakeholders. During this meeting, the company's regular business matters are discussed, including financial reports, plans for the future, and other important topics. The AGM provides a platform for shareholders to engage with the company's leadership and to exercise their rights as owners of the company. Provision Related to Annual General Meeting Under Companies Act 2013.
Provisions related to Annual General Meeting Under Companies Act 2013.
- Annual General Meeting is dealt under section 96 of the companies act 2013.
- Every company must hold an annual general meeting, in addition to any other meetings, except for one person companies.
- The gap between two annual general meetings shall not elapse fifteen months.
- Every annual general meeting of the company, other than first annual general meeting, shall held within six months from the end of financial year and first annual general meeting shall be held within nine months from the end of financial year.
- The registrar of companies can extend the time period for the annual general meeting of a company, excluding the first AGM, by up to three months if there is a reasonable cause.
- The meeting shall be held either the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated.
- The meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday.
The National Holiday as per secretarial standard
- January 26
- August 15
- October 02
Business In AGM
The AGM is a yearly meeting where a company discusses its regular business matters with its shareholders and board of directors. The four types of ordinary business that are typically conducted are:
- Reviewing the financial statement, board report, and auditor's report.
- Declaring dividends.
- Replacing retiring directors.
- Appointing and determining the pay for auditors. Any other business is considered special business.
Procedure for Conducting Annual General Meeting.
1.Before the AGM
- Hold a board meeting to prepare for the AGM, such as determining the date, time and place, and discussing relevant financial and auditor reports.
- Send a notice of the AGM to shareholders, directors, and auditors, giving 21 days' notice. If the company is listed, notify stock exchanges within 7 days.
- The notice must include details about the AGM, such as time and place, topics to be discussed, e-voting procedure (if any), proxy form and an explanatory statement.
2. At the AGM
- Make sure the chairman arrives within 15 minutes.
- If the chairman is absent, elect one of the directors as the chairman.
- The chairman runs the meeting.
- Conduct each business as stated in the AGM notice.
- Ensure a quorum is present throughout the meeting.
- At the AGM, important reports are reviewed, including the financial statement for the financial year, the board report, and the auditor report. The Board of Directors presents the financial statement, the board report, and the auditor of the company presents their report, which includes considerations of accounts, financial statements, and accounting standards.
3. After the AGM
- Company shall prepare minutes of the meeting
- Company shall submit the resolution of the auditor’s appointment if any with the registrar in Form ADT-1 within 15 days of AGM
- Company shall file audited financial statement along with consolidated financial statement (if applicable) in form AOC-4 or AOC-4 CFS or AOC-4 XBRL as the case may be with the registrar of companies within 30 days.
- File annual return ‘in Form MGT-7 within 60 days of its AGM
- Company shall ensure the declared dividend are to be paid to be shareholders of the company.
What remedy is available to the shareholder in case board fails to call Agm?
Section 97 of the Companies Act 2013, a welcoming section and tool for the shareholder to act when the board fails to call agm. The Tribunal may, upon the request of any member call or direct the calling of agm and give such ancillary or consequential directions as the Tribunal thinks fit. The beauty of this concept is that Tribunal has the power to issue direction, that even one member of the company present in person or by proxy shall be deemed to constitute a meeting.
What if you don’t comply?
Section 99 of the companies act laydown, that the company and every officer of the company who is in default shall be punishable with fine which may extend to one lakh rupees and in the case of a continuing default, with a further fine which may extend to five thousand rupees for every day during which such default continues.
The Annual General Meeting (AGM) is an important event for a company where shareholders have the opportunity to evaluate the company's performance, ask questions related to the company's business performance and hold the board of directors accountable for any underperformance. The company secretary plays a crucial role in conducting the AGM and ensuring that all provisions outlined in the Companies Act 2013 are followed.