General Meetings by Company

A Limited Company is an artificial legal person. The members who are the owners of the company appoint the Board of Directors to take care of the day to day operations of the company.  The Directors entrusted with decision making powers and the management of company. There are few decisions which can be taken by the directors in accordance with the rules and regulation of the company and few others which requires approval from the shareholders. The decisions which require members’ approval are taken by conducting a general meeting and passing the required resolution. 

There are two types of General Meetings under Companies Act 2013. Annual General Meeting (AGM) and an Extra-Ordinary General Meeting (EGM).

Annual General Meeting (AGM) must be conducted annually by the company within the prescribed time as per the Act to discuss and decide the ordinary business of the company and any other items that requires approval of General Meeting.

However, there are certain transactions which require immediate approval from the members and cannot be kept pending till the convening of AGM. Such decisions may be taken by the board of directors by calling an extra-ordinary general meeting of a company whenever necessary.

Annual General Meeting (AGM)

Annual General Meeting is the meeting held annually by the company to discuss about the ordinary transactions of the company. It must be conducted by all companies except an OPC within 9 months from the closure of first financial year in case of newly incorporated companies and within 6 months for the rest of the financial years. However, the time gap between two AGM shall not exceed 15 months.

Every AGM should be conducted during business hours (between 9 a.m. and 6 p.m.), on any day except National Holiday. It shall be held either at the registered office of the company or any other place within the city/ town/ village in which the registered office is situated. However, AGM of an unlisted company can be held at any place in India if all the members give consent in writing or by electronic mode by in advance

There are certain businesses transactions named as ordinary business which are to be dealt only at an AGM. These are:

• Adoption of Financial Statements, Board’s Report, Auditor’s Report
• Declaration of Dividend
• Appointment of directors in place of those retiring
• Appointment and fixing the remuneration of statutory auditors

All other transactions other than ordinary business shall be meant to be special business and a statement shall be annexed with notice for such special transactions. Every Company has to convene the AGM and carryout the ordinary transactions to complete Company Annual Filings with office of ROC

Timeline for Annual General Meeting

In case of newly incorporated companies other than One Person Company, the first Annual General Meeting of all companies except shall be conducted within 9 months from the closure of first financial year. All subsequent AGM’s shall be convened within 6 months of the closure of financial year. However, the gap between two AGM’s should not exceed 15 months.

Power of Tribunal to call Annual General Meeting

If the Board fails to convent the Annual General Meeting (AGM) in time, , any member of the company may approach the National Company Law Tribunal (NCLT) to call / direct to call such meeting.

The tribunal shall then call or direct the calling of an AGM and give such directions as it think fit which including a direction that one member present in person or proxy shall also constitute a proper AGM. The meeting so called shall be deemed to be the AGM of the company.

Extra Ordinary General Meeting (EGM)

All the general meetings of the company other than the Annual General Meeting (AGM)  are called Extra Ordinary General Meeting (EGM) of the company. There is no restrictions regarding the time and place of the EGM. Unlike the AGM, it can be held on public holidays and at a place other than the registered office of the company. However, an EGM of the company excluding that of wholly owned subsidiary of a company incorporated outside India must be held in India.

All business transactions other than ordinary business which requires immediate approval shall be done by convening an EGM. An explanatory statement containing material facts concerning each item of such special business to be passed at the general meeting shall be attached to the notice calling such meeting.

Notice of EGM

The general meeting shall be convened by sending 21 clear days notice (excluding date of notice and date of the meeting) in either writing or electronic mode to:

• All the members of the company, legal representative of any deceased member or the assignee of an insolvent member;
• Statutory Auditor of the company
• All the directors of the company

Private company may specify any number of days lesser than 21 days as notice period for convening of General Meeting in its articles. However, other companies may call a general meeting after giving shorter notice if the consent if given by:

• Members majority in number and holding 95% or more of paid up capital of the company having right to vote at that meeting; ; in case of company having share capital
• Members holding 95% or more of total voting power exercisable at that meeting; ; in case of company  not having share capital

EGM by Members

The board may call for an EGM as and when it deems fit to discuss on special business transactions of the company.  Further, the members may also ask the board to convene an EGM on a requisition made for discussion of any business. Such an EGM shall be called by the board if:

• Members holding 1/10^th of Paid up capital having the right to vote, as on date of receipt of requisition; in case of company having share capital
• Members holding 1/10^th of Total Voting power of all members having the right to vote, as on date of receipt of requisition; in case of company  not having share capital

The signed requisition shall contain the matters for discussion at the meeting and sent to the registered office of the company. The board shall within 21 days from the date of requisition proceed to call a meeting on a day not later than 45 days from date of requisition. If board does not proceed, the requisitionists may call the meeting themselves within 3 months from date of requisition.

Power of Tribunal to call Meeting of Members

If the EGM is not able to be called as prescribed above or as per the Act or the articles, the director or member having right to vote can apply to tribunal to call for a meeting. The tribunal may call a meeting when it thinks fit either by itself or on an application by such director or member and give such directions as it deems fit including a direction that one member present in person or proxy shall also constitute a proper meeting.