New private company_first financials and agm

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 November 2013 Dear Expert,

In case of pvt limited company incorporated on 4th November 2011, kindly let me know the following dates -

1. date when the first set of financials should be prepared.

2. date of first AGM and the date of subsequent AGM for the same company.

Your response shall be highly appreciated.

Regards

Ajay Mishra

Ajay Mishra (Expert)
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18 November 2013 Hi

Your first financial year will be decided in your first Board Meeting. So check your first Board meeting.

The expression 'Financial year' defined under section 2(17) means, in relation to any body corporate, the period in respect of which any profit and loss account of the body corporate laid before it in annual general meeting is made up, whether that period is a year or not. A company is at its liberty to follow any financial year whether or not it ends on 31st March. However, for the purpose of Income Tax, accounts will have to be made on 31st March.

The period to which the balance sheet and profit and loss account to be laid before a company in Annual General Meeting relate is called a "financial year".
Section 210(4) provides that a financial year may be less or more than a calendar year, but it shall not exceed fifteen months. The financial year may extend to eighteen months, where special permission has been granted in this connection by the concerned Registrar of Companies [Proviso to section 210(4)]. Thus, annual accounts may be prepared for a period up to eighteen months with the special permission of the Registrar on the application submitted in the new e-Form 61 electronically with the Registrar [prescribed by the Notification No. GSR 56(E) dated 10th Feb., 2006. [previously no form was prescribed for that
purpose]
In terms of the Income-tax Act, 1961, it is mandatory for companies to follow uniform accounting year, i.e., ending 31st March.

Ajay Mishra

Ajay Mishra (Expert)
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18 November 2013
TIME-LIMIT FOR HOLDING THE FIRST ANNUAL GENERAL MEETING
A new company which is registered under the Act, shall hold its first annual general meeting latest within a period of eighteen months from the date of its incorporation, namely, the date on which the Registrar has issued the certificate of incorporation to the company. If the first annual general meeting is so held, it is not necessary for the company to hold another annual general meeting in the year of its incorporation or in the following year. It may also be noted in this connection that the accounts placed before the first annual general meeting shall be for the period beginning from the date of incorporation and ending on a day of financial year, which will not precede the first annual general meeting by more than nine months from the close of the first financial year of the company — section 210(3). This may be illustrated by the following example:
Date of incorporation of company 23-10-2010
Date by which the first annual general meeting ought to be held 22-04-2012
The holding of the first annual general meeting shall comply with the following criteria of the Act:—
(i) The gap between the last date of the accounting period and the meeting shall not exceed 9 months, and
(ii) The second annual general meeting shall be held during the third year of incorporation.
Therefore, in the above example assuming that the first accounts shall be for the period from
23-10-2010 to 31-3-2012
The first AGM was to be held on or before (within a gap of nine months) 31-12-2011
The accounts for next period will end on 31-03-2012
The second AGM will be held on or before (namely the third year after incorporation) 30-09-2012
In the above example, since it was proposed to close the first accounts as on 31-03-2011, the first annual general meeting could be held before 31-12-2011 and the second annual general meeting could be held during the third year of incorporation.
As explained above there is no need to hold annual general meeting in the first calendar year of its incorporation, i.e. 2010

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Ajay Mishra

Ajay Mishra (Expert)
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18 November 2013
TIME-LIMIT FOR HOLDING SUBSEQUENT ANNUAL GENERAL MEETINGS
As mentioned above, every company shall hold every year an annual general meeting and ordinarily there shall not be a gap of more than fifteen months between two such meetings. Further that in terms of the provisions of section 210 an annual general meeting shall be held within a period of six months from the end of the financial year whose accounts are proposed to be considered at the said annual general meeting. Accordingly, it is the rule that a company whose financial year ends on 31st March, shall hold its annual general meeting by 30th September every year.

Querist : Anonymous

Querist : Anonymous (Querist)

18 November 2013 Thanks Ajay for the prompt response.

Thus, in the case which i have stated, whereby the date of incorporation is 4th Nov 2011, the financials for the first year shall be for the period 4/11/2011 to 31/03/2012 and the date of first AGM shall be 31/12/12.

Please confirm.

Also, could you please let me know how many board meetings needs to be held in case of the newly formed company and at what intervals?

Regards.

Ajay Mishra

Ajay Mishra (Expert)
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18 November 2013 Correct.

And first Board Meeting should be held with in 30 days from the date of incorporation.