A Private Limited company calls an AGM one month after the due date. Wish to know the consequences for default in holding AGM. Also suggest the easy remedy for this default.
Where the company has defaulted under section 156 and/or 210 of the Companies Act, 1956, that is, where they have not held the annual general meeting and/or have not placed the balance sheet and the profit and loss account before the annual general meeting, prosecutions are rarely launched. The fact that the complaint has to be filed in the court of first class Magistrate having territorial jurisdiction over the place at which the Registered office of the company is situated, which is at the place other than the Head Quarter of the Registrar need not prevent the Registrar from enforcing the penal provision in this regard. Section 168 contains penal provision for not complying with the provisions of section 166 or 167. It provides that if default is committed in holding the annual general meeting of the company, the company and every officer of the company who is in default shall be punishable with fine which may extend to Rs. 50,000 and if the default is continuing one then with further fine extending upto Rs. 2,500 for every day after the first day during which the default continues. However, if the books of accounts have been ceased by the police and produced in criminal court, the default is beyond the control of the company and should not be punished. Failure to hold the meeting in each calendar years is a separate offence different from failure to had it within 15 months of the earlier meeting. In State of Kerela v West Coast Planters Agencies (P) Ltd. (1958) 28 Comp Cas. 13 (Ker) (DB) it was held that where there was only a single member in a company then not holding the AGM would not amount to a default. In ROC v Krishna Nambiar (1958) Comp Cas 225, it was held that if there was any default in holding AGM the company immediately becomes punishable but for an officer of the company to be punished it is necessary to prove that he was knowingly responsible for the default.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
09 October 2012
Thanks a lot... Ajay Ji,
Here the company in question is a pvt ltd company having paid up capital of Rs. 1 lac and only two share holders. The Company had to hold AGM till 31st Aug, 2012 (as per the period of 15 months from the last agm). However, owing to certain business exegencies it holds AGM on 29th Sept, 2012 only. Company did not apply for extended period. You mentioned that complaint has to be filed before the first class magistrate. Does it suggest that there will be no penalty proceedings if nobody complains? I also wish to ask whether the MCA site will hinder anyway the process of filing by computing the period of 15 months? Please guide sir...
CAclubindia
