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Process of Extension of AGM (Annual General Meeting)

by CS Divesh Goyal
Published: Last Updated on 2 comments 233 views

Short Summary:

In this editorial, the author shall discuss the Process and provisions of extension of Due Date of Annual General Meeting (hereafter referred 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 meetingwithin 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 with in 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 a continuing default, with a further fine which may extend to five thousand rupees for every day during which such default continues).

However, there is provision in act which give power to Registrar of Companies to extend the time period for holding of AGM maximum by 3 months. Extract 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:

  1. About Company: (Name, Registered office, Capital Structure etc)
  2. 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.

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Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).

Disclaimer: The entire contents of this document have been prepared based on relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information.

IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION

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2 comments

kishan kumar August 22, 2020 - 12:08 pm

Whether Professional dsc is mandatory to file Gnl-1 for extension of Agm

Reply
Sanjay sharma September 1, 2020 - 4:52 pm

What should b the justifiable reason for making the application as non finalisation of accounts or delay in audit generally never considered as valid reasons earlier. But due to extension of tax audit date main one more this reason is also a valid ground

Reply

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