What is AGM (Annual General Meeting)?
An annual general meeting (AGM) is a meeting that is required to be held a mandatory yearly gathering of a company’s interested shareholders. Whereas At an AGM, the company’s director presents an annual report containing information for shareholders regarding the company’s performance and strategy for ahead vision.
Is the only the Company required to hold AGM?
AGMs are not only just held by companies. For example, universities, schools, charities, and unions could all be required to hold an AGM to discuss the future of the organization or institution in question.
AGM Holding Frequency:-
Every Company shall in each year hold, in addition to any other meetings, a General Meeting as its Annual General Meeting. However, OPC companies are not required to hold AGM. Accordingly, Company will have to specify the meeting as such that required t be conducted in the notices calling Annual General Meeting.
- The first AGM of the Company should be held within 9 months from the closing of the financial year.
- Subsequent AGM of the company should be held within 6 months from the closing of the financial year
- The gap between the holding two subsequent meetings i.e. AGM should not exceed 15 months.
- In case, if it is not possible for a company to hold AGM within the prescribed time, the registrar may, for any special reason, extend the time within which any AGM shall be held. However, such an extension can be for a maximum of 3 months. No such extension is allowed for the holding of the first AGM.
- There is no need to hold an AGM in the case of the one-person company.
POINT to be Noted:–
Timing restrictions need not be followed in case of an Extraordinary General Meeting(EGM)
Transactions executed in AGM:–
Two categories of transactions may be executed depending upon the nature of the business that required to be conducted. Two of them transactions namely, Ordinary business transactions and Special Business Transactions
Further Ordinary business transactions are the following namely:-
- The consideration/adoption of financial statements and the reports of the Board of Director and auditors
- The declaration of dividend, if any
- The appointment of directors in place of those retiring
- The appointment of fixing of the remuneration of the auditors.
In all these transactions, Ordinary Resolution required to be passed for transacting ordinary business Items.
Special Business Transactions
All other businesses will be Special business transactions that require a special resolution.
Notice for Calling of Meeting:-
For transacting the above business, there is a requirement of Resolutions either they may by Ordinary Resolution or Special Resolution. For this Resolution, we need to Intimate our Stakeholders by way of notice. The following are the characteristics of Notice are as given below:-
- Notice of AGM shall be given to every Member of the company, every Director, Auditors, Secretarial Auditor, Debenture trustee (if any) and other specified persons.
- Notice and another document shall be given at least 21 days in advance of the meeting. For the purpose of reckoning 21 days, the day of sending the notice and the day of the meeting shall not be counted. If notice is given by post/courier, an additional 2 days shall be provided for the service of the meeting.
- Shorter notice may be allowed if consent is obtained from 95% of the meeting entitled to vote at such a meeting.
- Notice shall specify the day, date, time and full address of the venue of the meeting.
Note: Any accidental omission to give notice or the non-receipt of such notice by any member or other person entitled to such notice of the meeting shall not invalidate the proceedings of the meeting.
CRUCIAL points to be pondered:-
- In the case of companies having a website, the notice shall be simultaneously hosted on the website until the conclusion of the meeting.
- Notice shall clearly specify the nature of the meeting and the business to be transacted thereon.
- Notice shall be accompanied by an attendance slip and proxy form with clear instructions.
- No business shall be transacted at a meeting if notice in accordance with this standard has not given and the business is permitted by the Act.
Default In Holding the AGM :
As per the company act, 2013, it is mandatory for the company to hold AGM as per prescribed Periods. However, if any non-compliance happens then Punishment has been prescribed that is:-
The Company and every officer of the company, who is in default shall be punishable with fine which may extend to rupees 1,00,000 and in case of continuing default, with a further fine which may extend to rupees 5000 for each day during which the default continues.