An Annual General Meeting (AGM) is held to discuss the yearly results, between the management of the company and its shareholders. As per Section 96 Companies Act, 2013, it is mandatory to hold an AGM in accordance with the procedures of this Act. As a rule, a company holding the AGM for the first time must hold it within nine months from the end of the first financial year. For other companies, the AGM must be held within 6 months from the end of the financial year or 15 months from the date of the last AGM whichever is earlier.
In the aftermath of the COVID-19 pandemic, the Ministry of Corporate Affairs (MCA) released the General Circular No. 21/2021 dated 14.12.2021 permitting the holding of the AGM via Video Conference (VC) or Other Audio-Visual Means (OAVM). The deadline for holding the AGM in this format was decided as 30th June, 2022.
According to the recent General Circular No. 2/2022, dated 05.05.2022, the MCA has relaxed and extended the deadline for companies to conduct AGMs due for the year 2022. The companies are now allowed to conduct the AGM via VC or OAVM till 31st December 2022.
The Circular has further clarified that this relaxation is not to be understood or considered as an extension being granted to the companies as against the rule of AGMs to be conducted in the time frame as provided under the Companies Act.
For simple understanding, the following is a brief summary of the circular:
The aftermath of the pandemic has had significant impacts on all sectors, particularly the way and mode of functioning. In light of the same, it becomes important to give companies and enterprises some relaxation with respect to the compliances they have to adhere to.
Through this circular, the MCA has relaxed the mode of conducting the mandatory AGM and has also extended the deadline for conducting a virtual AGM to 31st December 2022 from 30th June 2022. This is a step in the way of aiding the companies to fulfil their compliance without causing inconvenience to all shareholders as well.
Section 96, Companies Act, 2013, Act No. 18 of 2013.