An AGM is like a big yearly meeting where the owners of a company (that’s the shareholders) get together with the people who run the company (the board of directors). They come together to talk about important stuff like how the company is doing financially, and how it’s growing, and to show everyone a report about what the company has been up to.
There are some rules about when this meeting should happen:
- It has to take place within six or nine months after the end of the company’s financial year, but it can’t be more than 15 months since the last AGM.
- The very first AGM of a new company should happen within nine months after the end of its first year in business.
- For example, if a company starts in January 2023, its first AGM should be by December 31, 2023.
- For the AGMs that come after the first one, they need to happen within six months after the end of the financial year.
- So, if the last AGM was on September 29, 2022, the next one should be by March 31, 2023.
Steps for Conducting an AGM
- When a company plans an AGM, it has to send out an invitation at least 21 days before the meeting.
- This invitation tells everyone when and where the meeting will be, what they’ll be talking about, and what time it starts.
- It has to go to all the shareholders, the company’s auditor, the directors, and anyone else who’s invited.
Is it possible for a company to convene an AGM with a notice period of less than 21 days?
- But what if there’s a good reason to have the meeting sooner than 21 days? Well, if at least 95% of the people who can vote at the meeting agree, they can have a shorter notice period.
- If a company doesn’t have the AGM on time, it can get in trouble and be fined.
- The company could be fined up to 1 lakh rupees, and the people in charge of the company might have to pay too.
- If they keep delaying the meeting, the fine can go up by 5,000 rupees for each day it’s late.
- Recently, because of COVID-19 and technology, some companies started having AGMs online, using video calls and such.
- This was not common before, but because of the pandemic, it became necessary.
- The government allowed this online way of having AGMs until September 30, 2024.
If a company has a really good reason, like problems with an audit or unexpected issues, they can ask for more time to have their AGM. They can talk to a government office called the Registrar of Companies (ROC) and request an extension. But as of now, for the financial year 2022-23, they need to finish the AGM by September 30, 2023.
In conclusion, an Annual General Meeting is a big yearly gathering where shareholders and company leaders discuss important things about the company. It’s crucial to follow the rules to avoid fines, and lately, because of COVID-19, they can even have these meetings online.