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Date of First AGM

Sumit Jaiswal (Company Secretary) (818 Points)

18 February 2011

A Private Limited Company got incorporated on 14.01.2010. For Income Tax purposes, the balance sheet & PL was prepared for the financial year commencing from 14.01.2010 and ending on 31.03.2010. In the first board meeting the financial year was accordingly decided. What should be the last date for holding the first AGM of the company? Can it hold its first AGM within 18 months of its incorporation? For filing of annual accounts and return with ROC, can the financial year be considered to start from 14.01.2010 and end on 31.03.2011, inspite of the fact that the balance sheet & PL was prepared for the financial year commencing from 14.01.2010 and ending on 31.03.2010?

Regards

Sumit Jaiswal

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15 Replies

nidhigoel89 (Company Secretary ) (594 Points)
Replied 18 February 2011

Hello!

I think the first financial year would be upto 31st March, 2010 and accordingly as per sec 210 u need to conduct the first AGM within 9 months from 31.03.2010. I dont think that when u finalize the account upto 31.03.2010 for income tax purpose u can take a different financial year for ROC filing. It would be some contradicting fact i guess...

Rest learned members will confirm it further...............

Regards

Nidhi

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Sumit Jaiswal (Company Secretary) (818 Points)
Replied 18 February 2011

Further to Nidhiji’s reply I would like to mention the following:

A few months back we had filed annual accounts of a public ltd. Company. This company was incorporated on 25.02.2009 and for income tax purposes the annual accounts were prepared for the period 25.02.2009 to 31.03.2009 and then as usual for 01.04.2009 to 31.03.2010. We had shown the first AGM was held on 23.08.2010 and filed form 23AC & 23ACA showing the annual accounts for two financial years as prepared. This form was approved by ROC!

Was everything Okay or this may be a one-off case?

Can we do like that for the private ltd. Company for which I have raised the original query?

Regards

Sumit Jaiswal

Shridhi Jain (Company Secretary) (1678 Points)
Replied 18 February 2011

if you are preparing your b/s from the period 14 jan 2010 to 31 march 2010, it means you are ending your first f/y on 31 march 2010. You have to convene your first AGM with in 9 months of first f/y end i.e you have to convene your first AGM on or before 31 Dec. 2010.

You may also have your first f/y from 14 jan 2010 to 31 march 2011 and hold your first AGM on or before 13th july 2011 ( within 18 months of incorporation of co.).

If you are preparing the b/s of the company for any term then it has to be approved by the shareholders in AGM.

Sudhir Garg (Service) (236 Points)
Replied 18 February 2011

Sumit, Your guess is right. It is certainly one - off case. You can not do so.

Ms Shridhi answer is 100% correct.

Vinita (CA final (clrd grp 1) CS B.com(hons)) (135 Points)
Replied 18 February 2011

Agree with ms Shridhi Jain

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yoka (Chennai) (45 Points)
Replied 18 February 2011

Nidhi u r right...

U cannot use a different term as financial year for ROC filings as u have to produce the balance sheet and P&L that has been produced in the board meeting. And the 1st AGM should be held within 9 months i.e within 31 dec 2010.

Sumit Jaiswal (Company Secretary) (818 Points)
Replied 19 February 2011

Thank you all for your reply. The date of First AGM should be on or before 31.12.2010.

Lastly, I would like to know one thing - Has anyone else ever seen/experienced a 'one-off case' like that?

Thanks and regards

Sumit Jaiswal

Shridhi Jain (Company Secretary) (1678 Points)
Replied 19 February 2011

Dear Sumit,

There are many off-cases and many faults n irregularites that go unnoticed.

As you are talking abt private ltd. co., it may be possible that irregularity, if any, done by your co. may go unnoticed.

But wat is suggested is wat law says.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 19 February 2011

Originally posted by : Sumit Jaiswal
	A Private Limited Company got incorporated on 14.01.2010. For Income Tax purposes, the balance sheet & PL was prepared for the financial year commencing from 14.01.2010 and ending on 31.03.2010. In the first board meeting the financial year was accordingly decided. What should be the last date for holding the first AGM of the company? Can it hold its first AGM within 18 months of its incorporation? For filing of annual accounts and return with ROC, can the financial year be considered to start from 14.01.2010 and end on 31.03.2011, inspite of the fact that the balance sheet & PL was prepared for the financial year commencing from 14.01.2010 and ending on 31.03.2010? Regards Sumit Jaiswal

First Annual General Meeting

Under Section 166:-

Every company shall in each year hold in addition to any other meetings a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next.

Provided that a company may hold its first annual general meeting within a period of not more than 18 months from the date of its incorporation and if such general meeting is held within that period, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation or in the following year.

In case of first Annual General Meeting the extension would not be granted by the ROC.

Under Section 210:-

At every AGM of the company held in pursuance of section 166, the Board of Directors shall lay before the company-

Balance sheet and profit and loss account for the below mentioned period:-

In case of first AGM of the Company, to the period beginning with the incorporation of the Company and ending with a day which shall not precede the day of the meeting (AGM) by more than nine months;

Thus, to comply section 210, if the date of balance sheet is 31/03/2010, the AGM should be held on or before 31^st December, 2010.

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cs ashwini kumar (Company Secretary in Practice) (173 Points)
Replied 19 February 2011

Dear Mr. Sumit,

Keeping in mind the provisions of Section 166 read wtih 210 of the Companies Act, 1956 the accounting period of a company may be less or more than a calender year, but it shall not exceed fifteen months [Sec 210(4)], accordingly your company's accounting period for Companies Act purpose may be from 14.01.2010 to 31.03.2011 even though the company has already prepared the accounts for the year ended on 31.03.2010 which is otherwise required under the Income Tax Act. Further the first AGM must be held not later than 13th July 2011 [i.e. within 18 months from the date of incorporation or within 9 months from the date of closing of financial year , whichever is earlier]

As you have mentioned that "In the first board meeting the financial year was accordingly decided", to rectify that, convene a Board Meeting and pass a resolution with regard to extension of first accounting period upto March 31, 2011 instead of March 31, 2010.

Regards

CS Ashwini Kumar

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Sumit Jaiswal (Company Secretary) (818 Points)
Replied 19 February 2011

The reply of Mr. Ashwini is a little contradicting with regard to the earlier replies received for this query.

But it is implementable. The first financial year of the company can be fixed from 14.01.2010 to 31.03.2011 by the board of Directors.

Also as mentioned by me earlier, this type of case had happened prevously and ROC had approved the Form 23AC & ACA filed disregard of the fact that accounts of two f/y were shown while filing that form for the first AGM held.

But I am a little confused. Can anyone give me the final conclusion?

Regards

Sumit Jaiswal

prathiba (company secretary) (259 Points)
Replied 03 September 2011

Given below is the full text of the MCA circular for the ready reference of the readers.

“With reference to the correspondence resting with your letter No. Sec.166/5694 dated 20-7-1964 on the above subject, I am directed to say that the question raised by you has been carefully examined in the Department. From the strictly legal point of view, the time within which an AGM of a company is required to be held is governed solely by section 166 of the Companies Act, 1956 and the date on which an AGM is required to be held has no direct relationship with the financial year of a company.

Accordingly, the Registrar's powers to grant extension of time under the second proviso to section 166(1) does not become exercisable if the extension sought by the company is for holding the meeting falling within the time-limits mentioned in the said section 166 and is asked solely on the ground that it has not been able to prepare the accounts for the period mentioned in section 210(3). Notwithstanding the legal provision aforesaid, the board is of the view for administrative and practical consideration where a company approaches for the grant of extension of time for holding the annual general meeting in terms of the proviso to section 166(1) of the Act, the Registrar may continue to give the required extension for the holding of AGM beyond the period of six months from the close of the financial year of the company as contemplated under section 210(3) even though the time-limit for holding the meeting as per section 166 may not have reached. It is considered that apart from facilitating the smooth working of companies, such a practice would be administratively desirable as well. It was also in this context that the Department had earlier advised the field offices and companies which sought clarification on the point that sections 166 and 210 should be read together and if a breach of the provisions of one or the other of the two sections is to be avoided, an annual general meeting should be held in the earliest of the three relevant dates prescribed under these two sections (vide item No. 27 of interpretation, explained above, Circular No. 8/16(1)/61-PR dated 25-2-1961.) However, when it comes to determining for purposes of legal proceedings or levy of additional fees as to whether there has been a default in holding the AGM it would no doubt be necessary for the Registrar to continue the provisions of section 166 strictly in the manner indicated above. For this purpose the financial year of a company or the provision of section 210 is irrelevant. In other words, where a company holds its AGM within the time prescribed under section 166, though such a meeting is held after the expiry of six months from the close of its financial year and the company files its annual return within 42 days of the holding of the said meeting (now extended to 60 days), no action should be taken against the company for default of section 159 or 166 nor additional fee be levied in such a case in respect of the filing of the annual return and audited accounts.”

Circular No. 8/45(166)/64-PR dated 12-1-1964

Hariharakrishnan (Officer) (46 Points)
Replied 26 March 2012

A private limited company was incorporated on 10.09.2010. What will be the financial year end, due date of AGM. KIndly clarify. Thanks Hariharakrishnan

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 10 September 2012

First Annual General Meeting

Under Section 166:- Every company shall in each year hold in addition to any other meetings a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next.

Under Section 210:- At every AGM of the company held in pursuance of section 166, the Board of Directors shall lay before the company- Balance sheet and profit and loss account for the below mentioned period:-

In case of first AGM of the Company, to the period beginning with the incorporation of the Company and ending with a day which shall not precede the day of the meeting (AGM) by more than nine months;

Thus, to comply section 210, if the date of balance sheet is 31/03/2012, the AGM should be held on or before 31^st December, 2012. In any other case the date is to be decide accordingly.

Section 166 and 210 are to be read together.

First Annual General Meeting Under Section 166:- Every company shall in each year hold in addition to any other meetings a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next. Provided that a company may hold its first annual general meeting within a period of not more than 18 months from the date of its incorporation and if such general meeting is held within that period, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation or in the following year. In case of first Annual General Meeting the extension would not be granted by the ROC. Under Section 210:- At every AGM of the company held in pursuance of section 166, the Board of Directors shall lay before the company- Balance sheet and profit and loss account for the below mentioned period:- In case of first AGM of the Company, to the period beginning with the incorporation of the Company and ending with a day which shall not precede the day of the meeting (AGM) by more than nine months; Thus, to comply section 210, if the date of balance sheet is 31/03/2010, the AGM should be held on or before 31st December, 2010.

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