Section 96: annual general meeting

Introduction

Section 96 sets the AGM deadline. The first AGM is held within nine months of the close of the first financial year. Later AGMs are held within six months of the close of each financial year, and no more than fifteen months may pass between two AGMs.

It also fixes the hours, day and place. Since 13 June 2018, an unlisted company may hold its AGM anywhere in India if all members consent in advance, in writing or by electronic mode.

Key takeaways

Fix the AGM deadline

The notice must identify the meeting as the annual general meeting. The first AGM falls within nine months of the close of the first financial year. If it is held then, the company need not hold an AGM in its year of incorporation. Each later AGM falls within six months of the close of the financial year, and no more than fifteen months may pass between two AGMs.

• India Code — consolidated Companies Act, 2013, section 96
• eGazette — Companies (Amendment) Act, 2017 (1 of 2018)
• eGazette — S.O. 2422(E), 13 June 2018 (commencement of Act 1 of 2018)
• eGazette — S.O. 902(E), 26 March 2014 (commencement from 1 April 2014)
• eGazette — G.S.R. 463(E), 5 June 2015 (exemptions for Government companies)
• eGazette — G.S.R. 466(E), 5 June 2015 (exemptions for section 8 companies)
• eGazette — G.S.R. 582(E), 13 June 2017 (amending G.S.R. 463(E))
• eGazette — S.O. 802(E), 23 February 2018 (amending G.S.R. 463(E))
• eGazette — G.S.R. 151(E), 2 March 2020 (amending G.S.R. 463(E))
• eGazette — G.S.R. 584(E), 13 June 2017 (amending G.S.R. 466(E))

Ask for an extension only for later AGMs

The third proviso allows the Registrar, for a special reason, to extend the time by up to three months. The power does not cover the first AGM.

Choose the time and venue

The AGM must be called during business hours, between 9 a.m. and 6 p.m., on a day that is not a National Holiday. A National Holiday is a day the Central Government has declared as one. The venue is the registered office, or another place in the city, town or village where the registered office is situated.

Since 13 June 2018, an unlisted company may hold its AGM at any place in India if all members consent in advance, in writing or by electronic mode. The Central Government may also exempt any company from sub-section (2), subject to conditions.

Government companies and section 8 companies

G.S.R. 463(E) of 5 June 2015 modified sub-section (2) for a Government company so that, in place of another place in the same city, town or village, the AGM could be held at such other place as the Central Government may approve. G.S.R. 582(E) of 13 June 2017 substituted that entry: the words now read “such other place within the city, town or village in which the registered office of the company is situate or such other place as the Central Government may approve in this behalf”. A Government company may therefore hold its AGM at its registered office, at another place in the same city, town or village, or at a place the Central Government approves. Paragraph 2A, inserted by G.S.R. 582(E) of 13 June 2017, applies the exceptions in G.S.R. 463(E) only to a Government company that has not committed a default in filing its financial statements under section 137 or its annual return under section 92 with the Registrar. The later amendments to G.S.R. 463(E), S.O. 802(E) of 23 February 2018 and G.S.R. 151(E) of 2 March 2020, do not change this entry.

G.S.R. 466(E), also of 5 June 2015, adds a further proviso for a company licensed under section 8: the Board decides the time, date and place of each AGM beforehand, having regard to any directions the company gives in general meeting. G.S.R. 584(E) of 13 June 2017, which amended G.S.R. 466(E), did not change this entry. Paragraph 2A, inserted by G.S.R. 584(E) of 13 June 2017, applies the exceptions in G.S.R. 466(E) only to a section 8 company that has not committed a default in filing its financial statements under section 137 or its annual return under section 92 with the Registrar.

Consequences of default

If a company fails to hold its AGM, section 97 allows the Tribunal, on a member’s application, to call or direct the calling of the meeting.

Under section 99, the company and every officer in default are punishable with a fine of up to one lakh rupees. For a continuing default, there is a further fine of up to five thousand rupees for every day it continues.

Practical preparation

Confirm the financial-year close and the previous AGM date. Calculate the six-month (or nine-month) and fifteen-month limits. Pick a permitted day, time and venue. For an unlisted company meeting outside the registered-office city, collect all members’ consent in advance.

Practical checklist

Glossary

Annual general meeting

The yearly general meeting required by section 96 and identified as such in its notice.

National Holiday

A day declared as a National Holiday by the Central Government, under the Explanation to section 96(2).

Frequently asked questions