Provisions of the Company’s Act relating to Annual General Meeting: (Sec. 96 of the Companies Act, 2013)
As the term denotes, annual general meeting is the meeting under section 96 which has to be held annually. It is the meeting of the members through which they get the opportunity to express their views on the management of the company. Through this meeting, the shareholders can exercise control over the affairs of the company. The ‘Annual General Meeting’ is sometimes called ‘”Ordinary General Meeting” as it usually deals with the so-called ‘Ordinary Business’.
The main purpose (Objectives) to hold these meetings are:
1. To submit the annual account, balance sheet, director’s report and auditor’s report.
2. To declare the dividend.
3. Special business- any other business to be transacted will be deemed special business likes:
4. To increase share capital
5. To alter Article of Association
6. To appoint auditors and fix their remuneration.
7. To elect directors are that liable to retire by rotation.
Legal Provisions Relating to Annual General Meeting
Every company is required to hold this meeting. But, there are certain legal provisions which have to be followed, relating to the annual general meeting as contained in sections 96 and 97. There are:
a. A company may hold its first annual general meeting within a period of 9 months from the date of incorporation. However this should not be more than 9 months from close of financial years.
b. There must be one meeting held in each year. The gap between two annual general meetings must not be more than 15 months. Meeting must be held not later than 6 months from close of financial year.
c. the registrar has the power to extend the time of 15 months by 3 more months in special cases.
d. The meeting can be held at any working place, on any working day and working hours. If the day scheduled for meeting is declared by the Central Government to be a public holiday after the issue of the notice, it shall not be deemed as a holiday.
e. 21 clear days notice or any shorter notice if agreed by all shareholders must be given.
f. 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 :
a. Consideration of annual accounts, director’s report and the auditor’s report
b. Declaration of dividend
c. Appointment of directors in the place of those retiring
d. Appointment of and the fixing of the remuneration of the statutory auditors.
Ordinary business is transacted by passing ordinary resolution.
g. : As mentioned earlier, every company is required to hold this meeting according to the provision of the Companies Act. If any company fails to hold the annual general meeting the consequences are as follows:
A. As mentioned above, the annual general meeting provides the opportunity to the members to express views on the management of the company. Any member can apply to the Central Government for the failure of the company to call the meeting. The Central Government may give direction to the company for calling the meeting.
B. The company as well as every officer will become liable if they fail to held the meeting and shall be punishable with fine upto Rs. 50,000, and if the default continues , with a further fine of Rs. 2,500 for every day after the first day of default during which the default continues.