The Ministry of Corporate Affairs (MCA) has released a Circular (General Circular No. 18/2020) dated April 21, 2020 clarifying that if a company whose financial year (other than first financial year) has ended on December 31, 2019, can hold their Annual General Meeting (AGM) for such financial year within a period of nine months from the closure of the financial year (i.e. by 30th September, 2020) and that the same shall not be viewed as a violation of the provisions of the Companies Act, 2013.
The MCA issued the aforesaid Circular after receiving several representations from stakeholders, wherein the stakeholders expressed their difficulty in holding AGMs due to the COVID-19 outbreak.
The Circular further states that the Companies Act, 2013 allows a company to hold its AGM within a period of six months and nine months in case of first AGM from the closure of the Financial year and not later than a period of 15 months from the date of last AGM. The Circular states that the due date of the AGM under the Act will now be construed according to this notification.
Annual General Meeting (AGM)
The Companies Act, 2013 mandates under Section 96 that every company (other than a one-person company) holds a general meeting (AGM) each year apart from other meetings held in general. At an AGM, the directors of the company present an annual report containing the relevant information for shareholders about the company’s performance and strategies.