Extension of Annual General Meeting 2020
Extension of Annual General Meeting 2020
Holding an Annual General Meeting is a yearly procedure to be followed by every company. However, practically, it is quite challenging to hold an AGM due to present COVID-19 pandemic. The present article tries to clear up the basic provisions relating to holding of an AGM, various clarifications issued by the ministry with regard to holding of AGM 2020 and procedure to the followed for applying for an extension of time for holding an AGM.
Basic provisions relating to holding of an Annual General Meeting
Section 96 of the Companies Act, 2013 covers the provisions relating to the Annual General Meeting (i.e., AGM). The gist of the provisions is summarized hereunder-
- Every company is required to hold a general meeting in each year.
- One person company is not required to hold the annual general meeting.
- In the case of first AGM, it should be held within a period of nine months from the end of the first financial year. However, in any other case, the AGM should be held within a period of six months from the end of the financial year. Accordingly, the due date will be as under-
| First AGM | Any other case | ||
| AGM holding period for companies whose financial year ends on 31st December | AGM holding period for companies whose financial year ends on 31st March | AGM holding period for companies whose financial year ends on 31st December | AGM holding period for companies whose financial year ends on 31st March |
| 30th September | 31st December | 30th June | 30th September |
Summing up various circulars already issued in the matter
- General Circular No. 18/2020 dated 21st April 2020-
The circular allows the companies, whose financial year ended as on 31st December 2019, to hold its AGM within a period of nine months from the end of the financial year. In nut-shell, the companies having the financial year ending on 31st December 2019 can hold their AGM on or before 30th September 2020.
- General Circular No. 20/2020 dated 5th May 2020-
The circular allows the companies to conduct the AGM via video conferencing or other audio visual means.
- General Circular No. 28/2020 dated 17th August 2020-
The circular clarifies that if the company, whose financial year ended as on 31st March 2020, is unable to hold its AGM via video conferencing or other audio visual means. Then, such companies can file their application for extension of time for holding of AGM by submitting Form No. GNL-1 on or before 29th September 2020.
Recent clarification on an extension of holding AGM
Recently, vide General Circular No. 28/2020 dated 17th August 2020, the Ministry of Corporate Affairs clarified on an extension of holding AGM for companies whose financial year ended as on 31st March 2020. The circular states as under-
- Companies whose financial year ended as on 31st March 2020 are required to hold their AGM via video conference mode or any other mode as specified vide General Circular No. 20/2020 dated 5th May 2020.
- However, in case such companies are not able to hold the AGM, then the companies are required to file an application seeking an extension of time for holding of an AGM in Form GNL-1. Such an application is to be filed on or before 29th September 2020.
- Based on the application, the registrar can grant an extension for a maximum period of three months.
In short, the extension of the maximum period of three months for holding an AGM will be available, if both the below conditions are satisfied-
Condition No. 1 – the financial year of the company must be ended as on 31st March 2020; and
Condition No. 2 – the company is not able to hold the AGM via video conferencing or any other applicable mode.
Steps for applying for an extension of holding of AGM
The company needs to follow the below steps for applying for an extension of holding of AGM as per general circular no. 28/2020 dated 17th August 2020-
STEP 1 – Calling a Board Meeting approving the proposal of extension of AGM.
STEP 2 – Passing of the board’s resolution.
STEP 3 – Filing of an application in Form GNL-1 on or before 29th September 2020. A true copy of board resolution is to be attached with the application.
STEP 4 – Payment of fees. Applicable Fees for applying for an extension of AGM are tabulated hereunder-
| Nominal Share Capital | Applicable Fees |
| Less than INR 1,00,000 | INR 200 |
| INR 1,00,000 to INR 4,99,999 | INR 300 |
| INR 5,00,000 to INR 24,99,999 | INR 400 |
| INR 25,00,000 to INR 99,99,999 | INR 500 |
| INR 1,00,00,000 or more | INR 600 |
On being satisfied, the registrar will issue a certificate allowing extension of a time period for holding an AGM.
Conclusion
- Companies whose financial year ended on 31st December 2019 – due date for holding AGM extended up to 30th September 2020.
- Companies whose financial year ended on 31st March 2020 and who are able to hold the AGM via video conferencing or any other specified mode – there is no due date extension.
- Companies whose financial year ended on 31st March 2020 and who are not able to hold the AGM via video conferencing or any other specified mode – maximum three months extension will be available by applying in Form No. GNL-1.
