FAQs on Annual General Meeting (AGM) & Extension due to COVID 19

Short Summary

In this editorial, the author shall discuss the Quick bites on Annual General Meeting & Extension due to COVID 19. In this editorial we have attempted to clarify all those questions relating to the same.

QUICK BITES

1. What is an Annual General Meeting (AGM)?

An Annual General Meeting (AGM) is a mandatory yearly gathering of a company's shareholders. At an AGM, the directors of the company present an Annual report containing information for the shareholders about the company's performance and strategy.

2. Is AGM compulsory for the Companies?

There is a statutory requirement u/s 96 of the Companies Act, 2013. According to this section, every company is required to hold at least one meeting of the shareholders of the Company as an Annual General Meeting.

3. What are the consequences of not holding the AGM ?

If any default is made in complying or holding the AGM of the company, the company and every officer of the company who is in default shall be punishable with a fine which may extend to Rs.1 lakh and in case of continuing default, with a further fine which may extend toRs.5,000 for each day during which such default continues.

4. Can an AGM be extended?

As per Section 96(1) of the Companies, Act, 2013, the Registrar of Companies (ROC) may extend the time limit of holding the AGM up to a maximum period of three months; however, extension doesn't apply on the first AGM.

5. What is the time of holding the subsequent Annual General Meeting?

As per Section 96 of the Companies Act, 2013,The companies are required to hold their 2nd and subsequent Annual General Meetings within a period of six months from the date of the closing of the financial year.

6. Is OPC required to conduct an AGM?

OPC is not required to hold an Annual General Meeting as there is only one shareholder in OPC.

7. Can a single person hold an Annual General meeting?

To Convene a meeting, two or more person must be present. A meeting cannot be constituted by a single person.

8. Can an AGM be held through video conferencing?

It is not allowed to hold the AGM through video conferencing under the Companies Act, 2013. However, due to CoVID 19, MCA has given the relaxation to the companies to hold an AGM through video conferencing till 31st December 2021.

9. Can an AGM be held outside India?

As per Section 96, An AGM cannot be held outside India.

10. What is the quorum for an AGM in a Private Limited Company?

The minimum number of members who must attend an AGM for it to be a valid meeting is called the quorum. The law says that the quorum for a private company (other than a single-member company) is two members.

11. Who can propose and second a resolution in an AGM?

Every Resolution should be proposed by a Member and seconded by another Member entitled to vote thereon. Every Member holding equity shares and, in certain events as specified in the Act, every Member holding preference shares, shall be entitled to vote on a Resolution.