Procedure for seeking Extension of date for holding of Annual General of the Company by CS Mohit Saluja



Section 96 of the Companies Act, 2013 provides that every company other than a one person company shall in each year hold an Annual General Meeting of its shareholders and not more than fifteen months shall elapse between the date of one annual general meeting of the company and that of the next.

Provided that first annual general meeting of the Company shall be held within nine months of the closing of the financial year and subsequent annual general meetings shall be held within six months of the closing of the financial year.

The above can be explained as follows:

(i) For Newly Incorporated Company and the First Annual General Meeting-

9 months from the date of end of financial year.

(ii) For Other Companies and subsequent Annual General Meeting

6 months from the date of end of financial year

(iii) Maximum time gap between two annual general meetings shall not be more than 15 months.

So from above, it is clear that Annual General Meeting can be held only upto September 30, 2019 (which is within 6 months of closing of Financial Year i.e. 31.03.2019).

However, if the companies feel that it is not possible to hold the Annual General Meeting within the due time period of 6 months from close of Financial Year, the company may apply for extension of date of AGM and the Registrar may, for any special reason, extend the time within which any annual general meeting, other than the first annual general meeting, shall be held, for a period not exceeding three months. That means Registrar on special circumstances, may extend the time of holding of AGM by a company, which has applied for extension, upto December 31, 2019.

The same has been provided under the THIRD-PROVISO TO SECTION 96 OF THE 2013 ACT which state as follows:

“Provided also that the Registrar may, for any special reason, extend the time within which any annual general meeting, other than the first annual general meeting, shall be held, by a period not exceeding three months.”

APPLICATION MUST BE FILED WELL IN ADVANCE BEFORE THE DUE DATES

Company may file an application for extension of time limit for holding of Annual General Meeting. But it is to be noted that the date of filing of an application must be well in advance. And the dates depend from case to case.

Some of the cases are as follows:

(i) Non finalization of account: There may be chances that accounts may not be finalized on time.

Eq.: If the company intends to hold AGM on 30.09.2019. Notice must be sent along with annual Final Accounts atleast 25 days back i.e. on or before 05.09.2019. So if the company thinks that it is not possible to finalise the accounts till 05.09.2019, then company has to file an application before 05.09.2019 otherwise it may result in contravention of act.

(ii) Non availability of shareholders which may result in absence of quorum (specially in case of Private Limited Company)

Eq.: In case a company has only 2 shareholders and one of the shareholder is on foreign tour and it is not possible for him to be in India on date of Annual General Meeting of the company (and in AGM two shareholders are required to be present in person to form a quorum) and the company knows of the same and it is being found that non availability of such shareholders may cause absence of quorum. In such case, company may apply for extension of AGM well in advance before date of holding of AGM. In such case, application can be filed ay time, even one day before the date of AGM.

And accordingly there may be any reason for extension of AGM and date of filing of application depends accordingly.

Some of the other reasons for extension of AGM have been provided hereunder:

  • Due to non-signing of financial statements due to non-availability of Auditors due to resignation, death, incapacity to sign or such other valid reason.
  • Non-readiness of the financial statements due to natural calamity, due to loss of financial data, absence of Directors
  • Non availability of Managing Director since the financial statements need to be signed by the Managing Director.
  • Non-availability of directors on the valid grounds
  • The sudden death of Directors and consequence of this the limit of directors goes below the minimum requirements of directors.
  • Confiscation of Books of accounts by Income Tax Department, Serious and Fraud Investigation Cell or any other Government officials.
  • Such other special reasons if such reasons are valid and justified.

Procedure to file application seeking extension of time for holding annual general meeting:

  1. Chairman/ Director of the company shall call for a meeting of Board of Director for which a notice must be sent at least 7 days before holding of Meeting of Board.
  2. To Convene a Board Meeting on the specified date;
  3. To Pass a resolution for extension of time limit for holding annual general meeting specifying the due reason for extension of AGM;
  4. The file an application to the Registrar of Companies in Form No – GNL1.
  5. In GNL-1, the special reason for not to be holding of AGM along with other necessary information to be provided
  6. To attach the Certified true copy of the Board Resolution in E Form GNL-1
  7. Follow up with the office of the Registrar of Company
  8. The registrar shall examine the application on the specific grounds and may grant an extension, if it thinks it necessary to grant the same.
  9. To obtain the certificate of grant of extension in holding of Annual General Meeting of the company

CONVENING OF ANNUAL GENERAL MEETING IN EXTENDED PERIOD

Once the extension is being granted, the company may convene the Annual General Meeting of the Company within the period as allowed by the Registrar of Companies.

It is to be noted here that the extension can be granted only once in a Financial Year. Since the Act does not allow Registrar of Companies to give further extension.

PENALTY IN CASE OF DEFAULT BY THE COMPANY/ DIRECTORS

Company and every officer of the Company who is in default shall be punishable with fine which may extend to Rs. 1 Lakh and in case of continuing default with a further fine which may extend to Rs. 5000/- for every day during which such default continues.

Compounding in case AGM is not held or held after due date without approval from ROC:

If the Annual General Meeting is not held within the due date mentioned above or held after the due date but without taking approval of ROC for an extension then the Company will have to go to NCLT/RD, as the case may be, for compounding.

Conclusion: Hence, it can be concluded from the above that if the company has any special reason, the Registrar may grant the time for holding of extension of Annual General Meeting of the company.

                                                                 Format of Detailed Application To ROC


To,

Registrar of Companies,
___________(Region/State)

Subject: Application for the extension of Annual General Meeting.

Sir,


The ___th Annual General Meeting of the members of the company in respect of the year ended on 31st March, 20XX is required to be held on or before ________, 20XX. The company is not in a position to hold its Annual General Meeting within the stipulated time period. The main reason for this is that despite all efforts made in this direction, ____________________________________________________________________________________________________________________________
The company is making its best efforts to ________________________(resolve the reason for not conducting the AGM) at the earliest. This is going to take some more time this year and by no means the accounts duly audited can be made ready to place before the Annual General Meeting on or before_______, 20XX (due date of AGM) . Due to this unavoidable position, the Board of Directors of the company passed the following resolution in its meeting held on __________, 20XX:.

“RESOLVED THAT pursuant to the provisions of Section 96 and other applicable provisions, if any, of the Companies act 2013, the company do hereby make an application with the Registrar of Companies, ________ for extension of time for holding the Annual General Meeting for the FY 20XX-XX for a period of ________months (maximum 3 months) from the last date on which the Annual General Meeting of the Company should have been held".

“RESOLVED FURTHER THAT any Director of the Company and Company Secretary of the Company be and are hereby SEVERALLY authorized on behalf of the Company to sign and file application with the Registrar of Companies, ___________ and generally to do all acts, deeds and things that may be necessary, proper, expedient or incidental for the purpose of giving effect to the aforesaid Resolution.”

In view of the unexpected, unusual and extraordinary circumstances, It is humbly submitted to seek an extension of time of _____ months beyond _________, 20XX for convening the ___th Annual General Meeting of the company up to ____________, 20XX by which time we hope to finalize the accounts for the year 20XX-XX duly audited and place the same before the Annual General Meeting.

It may be mentioned that the __th Annual General Meeting in respect of the accounting year ended on 31st March, 20XX was convened and concluded on ____________,20XX (Details of previous year AGM).

A list of the Board of Directors is also enclosed for ready reference. The Registrar of Companies is humbly requested to kindly consider the aforesaid request and accord approval extending the period of Annual General Meeting in respect of the accounting year 20XX-XX by a period of _________months beyond ____________, 20XX and oblige. However, we assure you that in future all care shall be taken to finalize the annual accounts and convene the Annual General Meeting within prescribed period.

(Signature of Authorized Signatory)

Designation
DIN/ Membership No.:

Disclaimer:

 The author is based at Jalandhar and is practicing company Secretary and a
Certified CSR Professional. The information contained in this write up, as provided by the author, is to provide a general guidance to the intended user. The information should not be used as a substitute for specific consultations. Authors recommend that professional advice is sought before taking any action on specific issues. The author can be however contacted for further clarification at 99145-58709 or via mail at csmohitsaluja@gmail.com

 

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