Annual General Meetings under Companies Act 2013

Introduction

An Annual General Meeting (AGM) is indeed a crucial event for companies to engage with their members or shareholders. It serves as a platform to discuss the company’s performance, financial status, and future strategies. Section 96 of the Companies Act, which applies to all companies except one-person companies, mandates the holding of an AGM annually.

According to Section 101 of the Companies Act, 2013 and Secretarial Standards 2 (SS 2), a general meeting can be convened by providing at least 21 clear days’ notice in writing or through electronic means in advance of the meeting date. 

This requirement ensures transparency, accountability, and communication between the company’s management and its stakeholders. AGMs are pivotal for decision-making, electing directors, approving financial statements, and addressing any concerns or queries shareholders may have.

Holding of Annual General Meeting

• Frequency of AGMs

An annual general meeting (AGM) should be held once every calendar year. 

• First AGM

The First Annual General Meeting must be held within 9 months from the closing of the first financial year. Therefore it shall not be necessary for the company to hold any annual general meeting in its year of incorporation.

• Subsequent AGM

 Subsequent Annual General Meeting should be held within 6 months from the date of closing of the financial year.

• Gap

The gap between two AGMs should not exceed 15 months. 

Provisions related to Annual General Meeting and Secretarial Standards 2

1. Convening of Annual General Meeting

A General Meeting shall be convened by or under the authority of the Board. The Board is responsible for ensuring that an Annual General Meeting is held each year to address Ordinary Business items required for the AGM, along with any Special Business matters. If the Board fails to convene the Annual General Meeting in any given year, any member of the company has the right to approach the National Company Law Tribunal (NCLT) This authority can then direct the company to call and conduct the Annual General Meeting.

2. Notice of Annual General Meeting

As per Section 101 (1) of the Companies Act,2013 and Secretarial Standards 2 (SS 2), a general meeting may be called by giving not less than 21 clear days’ notice in writing or through electronic mode in advance of the Meeting. SS-2 on general meeting clarifies that for the purpose of calculating 21 days clear notice, the day of sending the notice and the day of Meeting shall not be counted.

Further in case the company sends the notice by post or courier, an additional two days shall be provided for the service of notice.

As per 5th June 2015 Notification and SS-2, In case of a private company, the period of sending Notice including accompanying documents shall be as stated above, unless otherwise provided in the Articles.

 In respect of companies registered under section 8 of the Act, the length of notice was shortened to 14 days vide notification no. G.S.R. 466 (E) dated 05.06.2015. 

3. Shorter Notice

As per Section 101 (2) of the Companies Act, 2013 and Secretarial Standards 2, for an annual general meeting (AGM), the shorter notice can be valid if consent, in writing or by electronic mode, is received from at least ninety-five percent of the members entitled to vote at the meeting.

However, the Financial Statements and other documents required to be annexed thereto may be given at a shorter period of time if the requisite consent of Members in writing, by physical or electronic means, is accorded thereto: 

(a) if the company has a share capital, consent by the majority in the number of members entitled to vote and represent not less than ninety-five percent of such part of the paid-up share capital of the company as gives a right to vote at the Meeting; 

(b) if the company has no share capital, consent by the Members having not less than ninety-five percent of the total voting power exercisable at such Meeting.

The request for consenting to a shorter Notice and accompanying documents shall be sent together with the Notice and the Meeting shall be held only if the requisite consent of Members is received prior to the time fixed for the Meeting.

4. Mode of Delivery of Notice

Section 101 of the Companies Act, 2013 allows for notice to be given either in writing or through electronic mode. The details regarding the service of notice can be found in rule 18, read in paragraph 1.2.2 of Secretarial Standard-2. 

• Notice can be sent through various methods including hand delivery, ordinary post, speed post, registered post, courier, facsimile (fax), email, or any other electronic means. The term ‘electronic means’ refers to any communication sent by a company through its authorized and secure computer program that is capable of producing confirmation and keeping a record of such communication. This communication is addressed to the person entitled to receive such communication at the last electronic mail address provided by the member.
• If the notice and accompanying documents are provided by email, they should be sent to the members’ email addresses registered with the company or provided by the depository, following the procedures prescribed under the relevant Act. The company must use a system that generates confirmation of the total number of recipients emailed and keeps a record of each recipient to whom the notice has been sent. Additionally, the company should retain a copy of this record, including any notices of failed transmissions and subsequent re-sending, as “proof of sending.” This documentation should be kept by or on behalf of the company for a period decided by the Board, which should be no less than three years from the date of the meeting.
• In case of the Directors, Auditors, Secretarial Auditors and others, if any, the Notice and accompanying documents shall be sent at the e-mail addresses provided by them to the company, if being sent by electronic means.
• Notice shall be sent to Members by registered post or speed post or courier or e-mail and not by ordinary post in the following cases:

(a) if the company provides the facility of e-voting ;

(b) if the item of business is being transacted through postal ballot.

If a Member requests for delivery of Notice through a particular mode, other than the one followed by the company, he shall pay such fees as may be determined by the company in its Annual General Meeting and the Notice shall be sent to him in such mode

5. Content of Notice

As per Section 101 (2) of the Companies Act, 2013 and Secretarial Standards 2, the notice for a meeting must include specific details such as the day, date, time, and complete address of the venue where the meeting will take place. For an Annual General Meeting (AGM), the notice should also indicate the serial number of the meeting. It shall also specify the nature of the meeting and statement of business required to be transacted thereat.

For items classified as Special Business, each item must be presented in the form of a resolution accompanied by an explanatory statement. This statement should provide all relevant facts necessary for a member to understand the meaning, scope, and implications of the business item, enabling them to make an informed decision. For items classified as Ordinary Business, specific resolutions are not required to be stated in the notice.

The notice should provide comprehensive particulars about the venue, including a route map and prominent landmarks for easy location, unless the company falls under certain exceptions:

• A company where only its directors and their relatives are members.
• A wholly owned subsidiary.

AGMs must be scheduled during business hours, between 9 a.m. and 6 p.m., on a non-national holiday. AGMs are typically held either at the company’s registered office or another location within the same city, town, or village as the registered office.

However, AGMs of an unlisted company can be held at any location in India with prior consent from all members, either in writing or through Electronic Mode. This consent must be obtained before the meeting takes place.

In the case of Section 8 Company, the time, date, and venue of each annual general meeting are determined in advance by the Board of Directors, considering any directions provided by the company in its general meeting regarding these aspects.

SS-2 defines “National Holiday” as Republic Day i.e. 26th January, Independence Day i.e. 15th August, Gandhi Jayanti i.e. 2nd October and such other day as may be declared as National Holiday by the Central Government.

The notice should be accompanied by an attendance slip and a proxy form that includes clear instructions for filling out, stamping, signing, and depositing the proxy form.

6. Persons entitled to receive the notice

• As per Section 101 (3) of the Companies Act,2013, The notice of the Annual General Meeting of the company shall be given to

1. every member of the company, legal representative of any deceased member, or the assignee of an insolvent member;
2. the auditor or auditors of the company; and
3. every director of the company.

• SS-2 provides that Notice in writing of the Annual General Meeting shall be provided to every Member of the company. Such Notice shall also be given to the Directors and Auditors of the company, to the Secretarial Auditor, to Debenture Trustees, if any, and, wherever applicable or so required, to other specified persons. 
• For a Nidhi company, individual notice must be provided to members who hold shares of more than one thousand rupees in face value or more than one percent of the total paid-up share capital of the company, whichever amount is lower. For other members, notice can be served by publishing a public notice in a newspaper circulated in the district where the company’s registered office is located and displaying the notice on the company’s notice board.
  
• For members, notice must be delivered to the address registered with the company or depository. When shares or other securities are jointly held by two or more persons, the notice should be sent to the person whose name appears first in the company’s or depository’s records. For any other person entitled to receive notice, it should be sent to the address provided by that person.
• When a company receives notification of a member’s death, the notice of the meeting should be sent as follows:

1. If securities are held by a single holder, the notice should be sent to the nominee appointed by the single holder.
2. If securities are held by more than one person jointly and any joint holder dies, to the surviving first joint holder;
3. If securities are held by more than one person jointly and all the joint holders die, to the Nominee appointed by all the joint holders.

7. Accidental omission to give notice

The accidental omission to give notice to, or the non-receipt of such notice by, any member or other entitled person for a meeting will not invalidate the proceedings of the meeting.  

8. Hosting of Notice on the Website

In case of companies having a website, the Notice shall simultaneously be hosted on the website till the conclusion of the Meeting. In case of a private company, the Notice shall be hosted on the website of the company, if any, unless otherwise provided in the Articles.

9. Quorum

Requisite Quorum as per Section 103 of the Companies Act 2013 and Secretarial Standards 2 is required to be present not only at the commencement but throughout the meeting, Unless the Articles prescribe for a higher number, the Quorum for general meetings shall be as follows:

For public companies:

 For private companies:

If the quorum requirement specified in the company’s Articles of Association is higher than the minimum quorum prescribed by the Act, the quorum for the meeting must adhere to the higher requirement specified in the Articles.

For a meeting to meet the quorum requirement:

• Members must be physically present at the meeting venue.
• Proxies are not counted towards determining the quorum. Only members physically present are considered for establishing the quorum.

10. Presence of Authorised Representative, Directors and Auditors

A duly authorized representative of a body corporate, or the representative of the President of India or the Governor of a State, is considered to be a member personally present at a meeting and has all the rights of a member attending in person.

If any director is unable to attend the meeting, the chairman is responsible for explaining the absence during the meeting. Directors who do attend general meetings and the company secretary will sit with the chairman and assist in conducting the meeting.

The auditors, unless exempted by the company, must attend general meetings either in person or through an authorized representative. They have the right to be heard at these meetings on matters that concern them as auditors. The authorized representative attending the general meeting must also be qualified to act as an auditor.

11. Chairman of Annual General Meeting

As per the Secretarial Standards 2, The Chairman of the Board shall take the Chair and conduct the meeting. In case the Chairman is not available within 15 minutes from the time decided for holding the meeting, or if he is not willing to take the Chair and the meeting, or if no director has been designated, the Directors attending the meeting shall choose one of the Directors among themselves as the Chairman of the meeting.

If the Director is not present within 15 minutes from the time decided for the meeting, or if he is not willing to take the Chair, or if no director has been designated, the Members present shall choose by conducting voting by show of hands to one of the members among themselves take the Chair and preside over the meeting.

12. Appointment of Proxies

Section 105 of the Companies Act 2013 and Secretarial Standards 2 governs the provisions relating to the proxies. The proxy can be appointed by members who are eligible to attend the meeting and carry voting rights. A member who is entitled to attend and vote at a meeting has the right to appoint a proxy, or multiple proxies if permitted, to attend and vote on their behalf. Importantly, the proxy does not need to be a member of the company themselves. 

Proxies are not considered for considering the quorum for the meeting. An instrument appointing a Proxy shall be in the Form prescribed under the Act. (Format Given below)Proxies must be deposited with the company either in person or through post no later than forty-eight hours before the commencement of the meeting for which they are deposited.

Additionally, the company is required to accept proxies even on a holiday if the deadline for accepting proxies falls on a holiday.

13. Voting at Meeting

Every resolution placed at the meeting shall be firstly put to vote on a show of hands, except a poll has been demanded or the resolution is put to vote by remote e-voting.

14. Business to be transacted at AGM

Section 102(2) of the Companies Act,2013 specifies that all business transacted at an Annual General Meeting (AGM) is considered special business, except for certain specific items which are considered ordinary business which are as follows:

1. the consideration of financial statements and the reports of the Board of Directors and auditors;
2. the declaration of any dividend;
3. the appointment of Directors in place of those retiring;
4. the appointment of, and the fixing of the remuneration of, the auditors

Accordingly, above mentioned four businesses are ordinary business rest shall be deemed to be special business. Explanatory Statement is not required for transacting any item of ordinary business. All Businesses except those mentioned above shall be deemed as special business at AGM.

15. Minutes of Annual General Meeting

The minutes of a general meeting must be entered into the Minutes Book within 30 days from the date of the conclusion of the meeting. These minutes should be signed and dated by the Chairman of the meeting.

In the event of the Chairman’s death or inability to sign, any Director who attended the meeting and was duly authorized by the Board can sign the minutes within thirty days of the general meeting. The Chairman should initial each page of the minutes, sign the last page, and append the date and place where the minutes were signed.

Annual General Meeting Notice Format

NAME OF THE COMPANY

 Regd. Add: 

  CIN: 

Email id:  

NOTICE

Notice is hereby given that the ____Annual General Meeting of the Members of________________ will be held on (Day) (Date)  at (Time). at the registered office of the Company at____________________ to transact the following business:

ORDINARY BUSINESS:

1. To consider and adopt the Director’s report and Audited Balance Sheet and Statement of Profit and Loss for the year ended on 31st March, 2024 together with the Auditor’s Report thereon.
2. To appoint Statutory Auditors of the Company.

To consider and if thought fit, to pass following resolution with or without modification(s) as an Ordinary Resolution:

“RESOLVED THAT pursuant to Sec 139, 142 of the Companies Act, 2013 and other applicable provisions if any, M/s. ________________________, Chartered Accountants, (FRN: 148611W) Pune be and are hereby appointed as Statutory Auditors of the Company for the period from the conclusion of this Annual General Meeting till the conclusion of the next Fifth Annual General Meeting of the company is held and convened at remuneration to be decided by Board of Directors plus traveling and out of pocket expenses.”

BY ORDER OF THE BOARD OF DIRECTORS

FOR  

_______________________

NAME OF THE DIRECTOR

DIRECTOR

DIN:  

Date: 

Place:  

NOTES:

1. The audited financial statements as at 31st March 2024 and the report of the Board of Directors, Auditors Report thereon are enclosed with this notice.
2.  A member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself/herself and the proxy need not be a member. Proxies in order to be effective must be received by the company not later than forty eight (48) hours before the meeting. Proxies submitted on behalf of limited companies, societies, etc., must be supported by appropriate resolutions/authority, as applicable.
3. A person can act as a proxy on behalf of Members not exceeding fifty in number and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights. A Member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as a proxy and such person shall not act as proxy for any other person or shareholder.
4. Members are requested to bring their attendance slips duly completed and signed mentioning therein details of their Folio No.
5. Relevant documents referred to in the accompanying Notice and in the Explanatory Statements, if any are open for inspection by the Members at the Company’s Registered Office on all working days of the Company, during business hours up to the date of the Meeting.
6. Corporate Members intending to send their authorized representatives to attend the Meeting pursuant to Section 113 of the Companies Act, 2013 are requested to send to the Company, a certified copy of the relevant Board Resolution together with their respective specimen signatures authorizing their representative(s) to attend and vote on their behalf at the Meeting.

Format of Proxy Form:

Form No. MGT-11

Proxy form

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

  I/We, being the member(s) of shares of the above-named company. Hereby appoint

as my/ our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 06th Annual General Meeting, to be held on Saturday 30th September, 2023 at the Registered Office of the Company at FLAT NO 202, 2ND FLOOR, U-A3/1, AJMERA COLONY, PIMPRI PUNE MH 411018 IN at 11.00 A.M. and at any adjournment thereof in respect of such resolutions as are indicated below:

Resolution No.

Affix Revenue Stamps

Signed this _______ day of______ 2023

Signature of Shareholder          Signature of Proxy holder         Signature of the shareholder across 

                                                                                                                   Revenue Stamp

Note:

1)  This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company not less than 48 hours before the commencement of the Meeting.

2)  The proxy need not be a member of the company

FORMAT OF ATTENDANCE SLIP

ATTENDANCE SLIP

(To be handed over at the entrance of the meeting hall)

____Annual General Meeting on ___________________

Full name of the members attending __________________________________ (In block capitals)

Ledger Folio No./Client ID No. ___________________  No. of shares held:

Name of Proxy

________________                                                                               

(To be filled in, if the proxy attends instead of the member)

I hereby record my presence at the ___Annual General Meeting of ______________________, held on ___day the _________________at the Registered Office of the Company at ________________ .

(Member’s /Proxy’s Signature)

Note:

1. Members are requested to bring their copies of the Annual Report to the meeting since further copies will not be available.
2. The Proxy, to be effective should be deposited at the Registered Office of the Company not less than FORTY EIGHT HOURS before the commencement of the meeting.
3.  A Proxy need not be a member of the Company.
4.  In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by Proxy, shall be accepted to the exclusion of the vote of the other joint holders. Seniority shall be determined by the order in which the names stand in the Register of Members.
5. The submission by a member of this form of proxy will not preclude such member from attending in person and voting at the meeting.

Penal Provisions

Section 97 of the Companies Act grants the Tribunal the authority to call or direct the calling of an annual general meeting for a company if there is a default in holding the meeting as required by Section 96. This power can be exercised upon the application of any member of the company. The Tribunal has the discretion to provide ancillary or consequential directions as it deems fit. One of the directions that the Tribunal may include is that one member present in person or by proxy shall be deemed to constitute a meeting. 

Section 99 of the Companies Act, 2013 states that if a company defaults in holding a meeting or fails to comply with any directions issued by the Tribunal, the company and every officer of the company responsible for the default shall be liable to punishment. The punishment may include a fine of up to one lakh rupees. If the default continues, an additional fine of up to five thousand rupees for each day of the continuing default may be imposed.

Conclusion

An annual general meeting (AGM) is an annual gathering of a company’s shareholders and directors where important business matters are discussed and decisions are made. These include approving financial statements, electing directors, appointing auditors, and addressing other crucial corporate issues. The AGM allows shareholders to engage with company management, ask questions, and vote on significant company matters.

It’s essential to ensure that AGMs comply with the Companies Act, 2013, and Secretarial Standards 2.

At Registration Arena, we offer assistance in preparing meeting documents and conducting AGMs efficiently and seamlessly.

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