ADJOURNMENT OF AGM
In this editorial author shall discuss the provisions of Adjournment of AGM. Many professionals asked this question that, if the company adjourned AGM and held after Due Date. Whether company required to go for compounding or not? We will also publish a video on this topic on our YouTube Channel FCS Divesh Goyal with FAQ’s.
A. PROVISION OF LAW:
As per Section 96 of Companies Act, 2013, Every company should hold one Annual General meeting of Members of the Company.
- TIME PERIOD OF HOLDING OF AGM
AGM should hold within 15 month from the date of last AGM or 6 month from the end of financial year, Whichever is earlier.
2. ADJOURNMENT OF AGM:
Adjournment of AGM can be of many reasons. It also can be intentional or unintentional, planned or unplanned. Meetings shall stand adjourned for want of requisite Quorum.
The Chairman may also adjourn a Meeting in the event of disorder or other like
causes, when it becomes impossible to conduct the Meeting and complete its business.
3. ISSUE OF NOTICE FOR ADJOURN AGM:
|If adjourn for period of 30 days or more||Notice of the adjourned Meeting shall be given in accordance with the provisions contained in Section 96|
|If adjourn for period less than 30 days||The company shall give not less than three days’ Notice specifying the day, date, time and venue of the Meeting,|
|If adjourn for period not exceeding 3 days||an announcement of adjournment has been made at the Meeting itself giving in the details of day, date, time, venue and business to be transacted at the adjourned Meeting
the company may also opt to give Notice of such adjourned Meeting either individually or by publishing an advertisement.
4. TRANSACTION IN ADJOURNED AGM:
Any Resolution passed at an adjourned Meeting would be deemed to have been passed on the date of the adjourned Meeting and not on any earlier date.
Question1 : If AGM adjourned and adjourned AGM held after Due Date of AGM. Whether Company is liable for compounding or not?
- Due Date of AGM: 30th November 2021
- Original AGM Date: AGM held on 29th November 2021 and adjourned
- Adjourned AGM Date: 5th December 2021
As in the given example, original AGM held within Due Date so whether, Company required to apply for compounding with Regional Director for holding of adjourned AGM at 5th December 2021.
Language of Law:
The company shall ensure compliance of the provisions of holding the Annual General Meeting every year, including adjournment thereof within a gap of not exceeding 15 months from the date of the previous Annual General Meeting or within such extended period permitted by the Registrar of Companies
As per the interpretation of above mention provision, one can opine that:
AGM should be held
- Within 15 months from the Date of last AGM OR
- Within 6 months from the end of Financial year
As per provisions of Section 96 read with Secretarial Standard 2, Company should Annual General Meeting including adjourn annual general meeting should be held within above mentioned period.
Therefore, in the given example Company hold adjourned AGM after Due Date i.e. 30 November 2021 therefore, company is required to apply for compounding of holding of AGM after due date.
Question 2: If AGM adjourned and adjourned AGM held within Due Date of AGM. Whether Company is liable for compounding or not?
- Due Date of AGM: 30th November 2021
- Original AGM Date: AGM held on 01st November 2021 and adjourned
- Adjourned AGM Date: 29th November 2021
As in the given example, original AGM as well as adjourned AGM held within Due Date so whether, Company required to apply for compounding with Regional Director for holding of adjourned AGM at 29th November 2021.
As per provisions of Section 96 read with Secretarial Standard 2, Company should Annual General Meeting including adjourn annual general meeting should be held within Due Date.
Therefore, in the given example Company hold original AGM, as well as Adjourned AGM within Due Date i.e. 30 November 2021 therefore, company, is not required to apply for compounding of holding of AGM as AGM held within due date.
Step by Step, Process of Compounding of AGM shall be shared by us in our Next EDITORIAL and YouTube Video. To watch YouTube videos, subscribe our YouTube channel “FCS Divesh Goyal” Link of the same is given here:
Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected]).
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