Annual General Meeting (AGM) is a meeting conducted by every Private Limited Company or Limited Company that provides an opportunity to the shareholders to meet every year and discuss matters relating to the Company. The AGM ensures the interest of the shareholders is protected.
Annual General Meeting is conducted by the Shareholders and Directors of the Company. Financial Statements of the Company of the Company are considered and adopted. Other Business item in an AGM includes declaration of Dividend for Shareholders, appointment of director in place of director who retires by rotation, appointment of auditor and to answer any issue raised by shareholders.
The first annual general meeting of the company must be held within the period of nine months from the date of closing of the first financial year of the company and in any other case, within a period of six months, from the date of closing of the financial year.
Further, if a company holds its first annual general meeting as aforesaid, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation.
Subsequent AGM should be held on the earliest of the following dates:
The Registrar of Companies may, on an application made to it by way of filing of Form GNL-2 with certified true copy of the Board Resolution/General Meeting Resolution, extend the period for holding the Annual General meeting for a period not exceeding 3 months.The Companies are not allowed to make an application for extension of time for the First Annual General Meeting. And, therefore, the non-holding of 1st AGM will be a non-compliance of the Section 96 of the Companies Act, 2013 and the Company will be liable for penal provisions.
The business at a meeting is said to have been “validly transacted” if the members of the organisation or body concerned, whether or not they were present, are bound by the decision made there at. They cannot be so bound unless the meeting is validly held. The essentials of a valid meeting are that the meeting should be:
Notice for Annual General Meeting
The notice for annual general meeting must be sent to all the member, auditors and debenture trustees at least 21 days clear days before the meeting along with the annual report of the Company. It excludes:
Notice is deemed to have been received by the members at the expiration of 48 hours after the letter containing it is posted. In nut shell, a notice must be sent 25 days before the meeting to the effective.
Annual general meeting may be held with a shorter notice if it is so agreed by at least 95% the members entitled to vote in the meeting. The consent for a shorter notice may be obtained either before or after the meeting.
The notice shall state the meeting to be an annual general meeting specifically.
Quorum means the minimum number of persons who being entitled to attend a meeting must be present at the meeting so that the business of the meeting can be transacted validly
In case of public company
In case of private company
Two members should be personally present in the meeting
Moreover quorum needs to be present only at the commencement of General Meeting. The proxies cannot be counted for the purpose of quorum.
At every AGM, the following matters must be discussed and decided. Since such matters are discussed at every AGM, they are known as ordinary business. All other matters and business to be discussed at the AGM are special business.
The following matters constitute ordinary business at an AGM:-
In case any other business (Special business) has to be discussed and decided upon, an explanatory statement of the special business must also accompany the notice calling the meeting. The notice must also give the nature and extent of the interest of the directors or manager in the special business, as also the extent of the shareholding interest in the company of every such person. In case approval of any document has to be done by the members at the meeting, the notice must also state that the document would be available for inspection at the Registered Office of the company during the specified dates and timings.
The procedure for conducting the annual general meeting is explained in detail below:
Before the Meeting
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