In this editorial, the author shall discuss the Process and provisions of extension of Due Date of Annual General Meeting (hereafter referred to as “AGM”).
Every company other than a One Person Company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting within a period of six months, from the date of closing of the financial year (mostly financial years end on 31st March and due date of AGM become 30th September).
If a company fails to hold AGM within due date then such company is liable for penalties u/s 99 of Companies Act, 2013 i.e. (complying with any directions of the Tribunal, 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 continuing default, with a further fine which may extend to five thousand rupees for every day during which such default continues).
However, there is a provision in the act that gives power to the Registrar of Companies to extend the time period for holding of AGM maximum by 3 months. The extract is given below:
The Registrar may, for any special reason, extend the time within which any annual general meeting, by a period not exceeding three months.
Process of Extension of AGM
As per Section 96(1), if a company wants to get extension for holding of AGM after due date, such company have to follow the below mentioned process:
STEP – I : Calling of Board Meeting
- Company shall call its Board Meeting as per section 173 and Secretarial Standard I.
- Board of Directors shall discuss reason for non-possibility of holding of AGM within due date.
- Board of Directors shall pass a Board resolution for filing of application with ROC for extension of AGM and authorization of any director to sign such application. (Draft attached at the end of editorial)
STEP – II : Preparation of Application
Company shall prepare an application for approval of ROC for extension of AGM. Following Points to be covered in application:
- About Company: (Name, Registered office, Capital Structure etc)
- Reason for non-possibility of holding within due date
- Attach copy of MOA, AOA of Company
STEP – III : Preparation & filing of e-form
Company shall prepare e-form GNL-1 for filing of application with Registrar of Company. GNL-1 is required to file with ROC “Form for filing an application with Registrar of Companies”
- Mention Name of Company
- Select reason for application in point no 6
- Affix DSC of Director
- File same with ROC
After Step III company don’t have to do anything. Now ROC will check the facts of application and ROC feels that according to facts extension should be granted then, ROC shall give extension letter for any period maximum for three months.