Company Compliance: Annual General Meeting Explained

1. Business to be transacted at Annual General Meeting

The following are the business which is usually transacted at Annual General Meeting

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 the directors in place of those retiring
4. The appointment and the fixing of remuneration of auditors

The above 4 business are ordinary business transacted at AGM. Rest all are considered to be special business.

2. Date, Time and Place of Annual General Meeting

Date and Time: An Annual general meeting should be held during business hours i.e., between 9AM to 6PM on any day that is not a National holiday.

Place: An Annual general meeting should be held either at the registered office of the company or at some other place within the city, town or village in the registered office is situated

3. Holding of Annual General Meeting

1. Annual General Meeting should be held once in each calendar year.
2. In case of First Annual General meeting, AGM needs to be held within a period of 9 months from the date of closure of the first financial year of the company. Hence it is not required for the company to hold any annual general meeting in the year of its incorporation
Example:
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Rama Labs Private Limited has incorporated on Jan 30th 2022.It can close its books of accounts on Mar 31st 2023 and file the compliance for 15 months
3. In case of Subsequent annual general meetings or existing companies, AGM needs to be held within a period of 6 months from the date of closure of the financial year of the company.

4. Penalty for default in holding the Annual General Meeting

• If any default is made in complying or holding AGM, the company and every officer of the company who is in default shall be liable to a fine of Rs 1 lakh.
• In case of continuing default, the fine will be extended to Rs 5000 per each day during which such default continues

5. Quorum of AGM

Quorum means the minimum number of directors whose presence is necessary for holding of a meeting.

Private Limited Company: The quorum required is two members.

Public Company: The quorum for public companies is as follows.

1. If number of members is within 1000 - Quorum is 5 members
2. If number of members is more than 1000 but within 5000 - Quorum is 15 members
3. If number of members is more than 5000 - Quorum is 30 members

6. Notice of Meeting

• The notice of Annual General Meeting shall be given not less than 21 clear days either in writing or through electronic mode.
• The notice should contain place, date, day and hour of the meeting and shall contain a statement of the business to be transacted at the meeting.