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Procedure for Conducting Annual General Meeting (AGM)

Background

  • Every company other than a One Person Company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it, and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next. [Section 96 of the Companies Act, 2013]

Sections/Rules/Regulations

  • Section 96, 105 and 108 of the Companies Act, 2013
  • Rule 18 and 20 of the Companies (Management & Administration)Rules, 2014
  • Regulations 30, 42 and 46 of the SEBI (LODR) Regulations, 2015
  • Clauses of Secretarial Standards-2

Mandatory Requirement & Important Points:        

  • In case of the first annual general meeting, it shall be held within a period of nine months from the date of closing of the first financial year of the company and in any other case, within a period of six months, from the date of closing of the financial year.
  • If a company holds its first annual general meeting as aforesaid, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation.
  • 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.[Provisos to Section 96(1) of the Companies Act 2013]
  • Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated. [Section 96(2) of Companies Act 2013]
  • Provided that annual general meeting of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance. [First Proviso to Section 96(2) of Companies Act 2013]
  • The Central Government may exempt any company from the provisions of sub-section (2) of Section 96 of the Companies Act subject to such conditions as it may impose. [Second Proviso to Section 96(2) of Companies Act 2013]
  • Notice of General Meeting shall be given at least 21 clear days prior to the General Meeting date in writing by hand or by ordinary post or by speed post or by registered post or by courier or by facsimile or by e-mail or by any other electronic means. in the manner as prescribed in Rule 18 of the Companies (Management & Administrations) Rules, 2014 read with Section 101 of the Companies Act, 2013.  The notice of the general meeting of the company shall be simultaneously placed on the website of the company if any and on the website as may be notified by the Central Government.
  • Any accidental omission to give notice to, or the non-receipt of such notice by, any member or other person who is entitled to such notice for any meeting shall not invalidate the proceedings of the meeting.
  • Quorum should be present throughout the general meeting.
  • Chairman shall be present mandatorily during the meeting.

Procedure for conducting AGM of the Company:

  • Convening meeting of Board of Directors:
    • Meeting of Board of Directors shall be conducted as per Section 173 of the Companies Act, 2013 and SS-1 or by passing Resolution by Circulation for fixing the day, date, time and agenda of General Meeting, approving the draft Notice of General Meeting along with Explanatory Statement and to authorize the Company Secretary or any Director of the Company to issue Notice of General Meeting to all members and persons entitled to receive the Notice.

Companies which are required to provide remote e-voting facilities are required to pass resolutions for appointment of Scrutinizer, Agency for remote e-voting, cut-off date for reckoning members entitled to voting & auythorize Chairman/Director to receive Scrutinizer’s Register, E-Voting Report, etc.

For further insights, please refer to the procedure of conducting a Board Meeting,

  • Appointment of Scrutinizer [As per Section 108 of the Companies Act read with Rule 20 of the Companies (Management & Administrations) Rules, 2014]
    • Every company which has listed its equity shares on a recognized stock exchange and every company having not less than one thousand members shall provide to its members facility to exercise their right to vote on resolutions proposed to be considered at a general meeting by electronic means and for providing e-voting facility at the meeting.
    • In order to exercise this practice a company shall appoint a Scrutinizer.
    • The Scrutinizer may be a Company Secretary in Practice, a Chartered Accountant in Practice, a Cost Accountant in Practice, or an Advocate or any other person of repute who is not in the employment of the company and who can, in the opinion of the Board, scrutinize the e-voting process or the ballot process, as the case may be, in a fair and transparent manner. [Clause 8.4 of the Secretarial Standard-2]
  • Notice of General Meeting: [As per Section 101 of the Companies Act, 2013 read with Rule 18 of the Companies (Management and Administration) Rules, 2014 and Secretarial Standard-2] 
    • Notice of General Meeting shall be given at least 21 clear days prior to the General Meeting date in writing, by hand, by ordinary post /speed post/registered post, courier/fax/e-mail or any other electronic mode [as per Section 101 of the Companies Act, 2013 and Rule 18 of the Companies (Management & Administration) Rules, 2018].
    • A shorter notice can be issued where the consent is given as specified under Section 101 of the Companies Act, 2013 by not less than 95% of the members entitled to vote thereat
    • The Notice shall be sent to all the directors, members and auditors (Statutory as well as Secretarial), Debenture Trustees and all others who are entitled to receive such Notice.
    • The notice of General Meeting shall specify the day, date, time, full address of the venue, and include a statement on the business to be transacted. 
    • Notice of Annual General Meeting shall also specify the serial number of the Meeting and nature of meeting
    • In respect of Special Business items, each item shall be in resolution form and accompanied by Explanatory Statement.
    • The Explanatory Statement shall set out all such facts as would enable a Member to understand the meaning, scope and implications of the item of business and to take a decision thereon. In respect of items of Ordinary Business, Resolutions are not required to be stated in Notice.
    • Notice shall be accompanied, by an attendance slip and a Proxy form with clear instructions for filling, stamping, signing and/or depositing the Proxy form.
    • Notice of a company which has a share capital or the Articles of which provide for voting at a Meeting by Proxy, shall prominently contain a statement that a Member entitled to attend and vote is entitled to appoint a Proxy, or where that is allowed, one or more Proxies, to attend and vote instead of himself and that a Proxy need not be a Member.
    • Where this isn’t practicable, the Notice shall be published in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated, and in an English newspaper in English language, both having a wide circulation in that district, at least seven days prior to the Meeting, exclusive of the day of publication of the Notice and day of the Meeting.
    • In case of companies having a website, such Notice shall simultaneously be hosted on the website and on the website as may be notified by the Central Government.
    • Listed entities are required to submit a copy of the advertisement to Stock Exchange within 12 hours of publication and post the same on website within 2 working days.[Regulation 30 and 46(3) of SEBI(LODR) Regulations,2015]
    • Notice in advance of 3 working days to be given to Stock Exchange where a Record Date has been fixed by Listed Entity [Regulation 42 of SEBI(LODR) Regulations, 2015]
  • Remote e-Voting [As per Section 108 of the Companies Act read with Rule 20 of the Companies (Management & Administrations)Rules, 2014]
    • The facility for Remote e-voting shall remain open for not less than 3 days.
    • The voting period shall close at 5 p.m. on the day preceding the date of the General Meeting.
    • A Member may participate in the General Meeting even after exercising his right to vote through Remote e-voting but shall not be entitled to vote again;
    • A Member as on the cut-off date shall only be entitled for availing the Remote e-voting facility or vote, as the case may be, in the General Meeting
  • Proxy Register [Section 105 of the Companies Act 2013 read with SS-2]
    • Proxies received shall be entered in chronological order if the Register of Proxies
    • Where any Proxy has been rejected, reasons for rejection shall be entered in the Remarks column
  • Convening General Meeting:
    • Quorum shall be checked for convening the Annual General Meeting.
    • Quorum shall be present at the time of commencement of meeting and also while transacting business.
    • Unless the Articles provide for a larger number, the Quorum for a General Meeting shall be: (a) in case of a public company, – (i) five Members personally present if the number of Members as on the date of Meeting is not more than one thousand; (ii) fifteen Members personally present if the number of Members as on the date of Meeting is more than one thousand but up to five thousand; (iii) thirty Members personally present if the number of Members as on the date of the Meeting exceeds five thousand; (b) in the case of a private company, two Members personally present.
    • The Chairman of the Board shall take the Chair and conduct the Meeting. If the Chairman is not present within fifteen minutes after the time appointed for holding the Meeting, or if he is unwilling to act as Chairman of the Meeting, or if no Director has been so designated, the Directors present at the Meeting shall elect one of themselves to be the Chairman of the Meeting.
    • If no Director is present within fifteen Minutes after the time appointed for holding the Meeting, or if no Director is willing to take the Chair, the Members present shall elect, on a show of hands, one of themselves to be the Chairman of the Meeting, unless otherwise provided in the Articles.
    • The absence of any director shall be explained by the Chairman in the meeting.
    • The Chairman of the Audit Committee, Nomination and Remuneration Committee and the Stakeholders Relationship Committee, or any other Member of any such Committee authorised by the Chairman of the respective Committee to attend on his behalf, shall attend the General Meeting.
    • Directors who attend General Meetings of the company and the Company Secretary shall be seated with the Chairman
    • The Company Secretary shall assist the Chairman in conducting the Meeting.
    • The Auditors, unless exempted by the company, shall, either by themselves or through their authorised representative, attend the General Meetings of the company and shall have the right to be heard at such Meetings on that part of the business which concerns them as Auditors. (Auditors here also includes Secretarial Auditor)
    • The Chairman shall ensure that the Meeting is duly constituted in accordance with the Act and the Articles or any other applicable laws, before it proceeds to transact business.
    • The Chairman shall then conduct the Meeting in a fair and impartial manner and ensure that only such business as has been set out in the Notice is transacted. The Chairman shall regulate the manner in which voting is conducted at the Meeting keeping in view the provisions of the Act.
    • The Chairman shall explain the objective and implications of the Resolutions before they are put to vote at the Meeting.
    • A fair opportunity to be provided to members entitled to vote and to seek clarifications/ offer comments related to any item of business and address the same as required.
    • E-voting facility for prescribed companies to be provided as stated earlier
    • Vote of Thanks to be given at the conclusion of meeting.

Post Meeting Requirement

  • Listed companies shall disclose the outcome of the General Meeting to the Stock Exchange within 12 hours from the conclusion of General Meeting [Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015] and also on website of the Company within 2 working days from the date of the passing of resolution [Regulation 46 (3) of LODR 2015]. The listed entity may provide the exact link to the webpage of each of the recognized stock exchanges where such information has already been made available by the listed entity. 
  • Scrutinizer to submit a Report on total number of votes cast in favour or against the resolution and submit the same to Chairman for declaration of result.
  • The E-Voting Result shall be displayed for atleast 3 days on the Notice Board of the Company at its registered and corporate office address as well as Head Office and shall be posted on website of the Company.
  • The Voting results shall be submitted to the stock exchange within 2 working days form the conclusion of the General Meeting. [Regulation 44 of the SEBI (LODR) Regulations, 2015].*
  • Minutes of the general meeting shall be prepared, signed as prescribed.

*Now, the compliance of Regulation 44 has been made a part of Integrated Filing (Governance) for ease of doing business and accordingly the voting results are to be submitted within 30 days of end of quarter as part of Integrated Filing (Governance)

Listed entities are required to do Integrated Filing (Governance) with the Stock Exchange for Statement on redressal of investor grievances (under Reg 13(3)),Compliance  Report  on Corporate Governance(under Reg. 27(2)(a)), Reconciliation of Share Capital &AR(reg 76 of DP reg), Meeting of shareholders abd voting (reg 44(3)) of LODR within 30 days of the end of Quarter

Penalties & Punishments

  • Section 99 of Companies Act 2013 provides that where any default is made in holding a meeting as per Section 96 of the Companies Act 2013, , the company and every officer of the company who is in default shall be punishable with fine which may extend to one lakh rupees and in the case of a continuing default, with a further fine which may extend to five thousand rupees for every day during which such default continues.

 

  • As per SEBI (LODR) Regulations, 2014:

Regulation

Penalties

30          

General penalty: 

Listed entity/any other person who contravenes any provision of the regulations shall be liable for one or more of the following penalties/actions as deemed fit by the regulator :

a) action as per Securities Law,

b) fine,

c) suspension of trading,

d)freezing of promoter/promoter group holding of designated securities, as may be applicable, in coordination with depositories,

e) any other action specified by Board 

44

Rs. 10,000/- per instance of non-compliance

46 

Advisory/warning letter per instance of non-compliance per item₹10,000 per instance for every additional advisory/warning letter exceeding  the four advisory/ warning letters in a financial year 

 

Disclaimer: The information contained in this Article is intended solely for personal non-commercial use of the user who accepts full responsibility of its use. The information in the article is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. We make no representation or warranty of any kind, express or implied regarding the accuracy, adequacy, reliability or completeness of any information on our page/article. 

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