What are the provisions relating to Annual General Meeting?
Annual General Meeting
As per Section 96 of the Companies Act, 2013, Every Company, other than One Person Company (OPC), must hold a general meeting in each year as Annual General Meeting (AGM). The first AGM must be held within period of not less than one month and more than six months from the closing date of financial year[Section 96(1) of the Companies Act,2013]. The gap between two Annual general meeting should be more than 15 months. Annual general meeting is for the members of the company. Members and also the directors discuss on the matters relating to business.
”There isn’t collaboration happening outside of meetings, so a meeting becomes a place where you collaborate”
The economist, Article named ”The cure for bad meetings” Retrieved on 7th December 2017, Original Article by Julia White.
According to Section 129(2), at every AGM directors of the company shall put forth financial statement for the financial year. Moreover, Section 129(3) says, where the company has one or more subsidiaries, then they have to prepare a consolidated financial statement of all subsidiaries and lay down before AGM.
Following are the businesses transacted at AGM
1) Ordinary Business [Section 102(2)], i.e.
a. Presenting of financial Statements and reports of board of directors and Auditors.
b. Declaration of any Dividend
c. Appointment of directors in place of retiring one
d. Appointment of and Fixation of the remuneration of the auditors.
2) Special Business [Section 102(b)]:
All the rest are special business.
Time and Place of the meeting:
The annual general meeting convened on a working day during business hours and at the registered office of the company or at some other place within the city in which the registered office of the company. An adjourned meeting cannot be on a public holiday.
Notice of at least 21 days’ must be give to call an annual general meeting of the shareholders. Annual general meeting held with a shorter notice if agreed by all the members voting at meeting. (Sec. 171). The notice must expressly specify the meeting to be Annual General Meeting.
It means the minimum number of members required to hold a meeting. Quorum for public comapny is 5 and for others it is 2. The articles may provide for larger number. If quorum is not present within half an hour of the notified time, it is dissolved. Quorum not is necessary in any adjourned meeting.
In every organisation should fix the number which will constitute quorum.The quorum of members must be present not only at the beginning but also till the end. Otherwise the business transacted at the meeting will be invalid. If the quorum is not present it will be adjourned.
List of businesses which need to be transacted at meeting. The company secretary prepares agenda. The notice must also contain agenda of meeting. The Act wants the company to attach annexure. It should contain material facts relating to the business and nature and extend of interests of manager or directors of the company. The statement must contain the time and place of inspection.
Any member of company who is unable to attain the meeting, can appoint another person to attain such meeting and vote on his behalf. The person so appointed is proxy. Written instruction for appointing proxy. Proxy can not speak at the meeting. But can vote only in poll voting system. The member of private company can not appoint more than one proxy. The corporate,if member, can appoint a representative.
DEFAULT IN HOLDING ANNUAL GENERAL MEETING
As per Section 96, if a Company not conducting an Annual General Meeting and also not complying with any direction of the Central Government, then the Company and also its every officer is punishable with fine which may extend to Rs. 100,000 and in case of continuing default, it may also extend to Rs. 5000 for every day.
Further, Section 97 of the Companies Act, 2013, gives powers to tribunal to call AGM if company does not conduct AGM . Any member of the company can request to National Company Law Tribunal for calling AGM. [Section 97(1)].