Annual general meeting is a mandatory meeting of the shareholders with membership associations and companies which are conducted yearly.
The annual general meeting is held to discuss the affairs of the company and conduct the business.
There are two types of business that are transacted at the meeting; ordinary business and special business like the appointment of directors, dividend distribution, auditor’s appointment, etc.
Every company except One Person Company are under an obligation to conduct an annual general meeting in each year. Holding the annual general meetings is the requirement of law. Public company or private company whether limited by shares or not or limited by guarantee or not or unlimited company is required to hold an annual general meeting for the following purposes:
In order to be a valid annual general meeting, the notice should be given by the authorised person to every shareholder, director, auditor and debenture holder of the company. Although no specified form has been prescribed for notice, but the following points must be kept in mind while drafting a notice:
No business shall be transacted at a meeting other than specified in the notice. If any meeting held and the resolution passed at such meeting without a valid notice, will be invalid.
For a valid general meeting and the business be validly transacted, a proper quorum must be present. The quorum must be present not only at the beginning but throughout the meeting. To constitute a quorum for a valid general meeting, it is necessary to personally present in the meeting.
The quorum for an annual general meeting shall be unless the articles of the company provided a larger number for a quorum:
Company
Number of members as on the date of the meeting
Quorum
Public company
Up to 1000 members
5 members
1001-5000 members
15 members
5001 or more members
30 members
Private company
-
2 members
If the quorum is not present at the meeting as per the law or as per articles of the company the meeting is not considered as a valid meeting. Consequently, the businesses transacted in such meeting become void.
For every company registered with MCA except One Person Company, it is mandatory to hold an annual general meeting in every calendar year. The following table will explain you the related provisions regarding the frequency of the annual general meetings:
Time limit for holding first AGM
Within a period of 9 months from the date of closing of the first financial year
Time limit for holding second and subsequent AGM
Within a period of 6 months from the closing of the financial year
Maximum interval between AGMs
A maximum gap of 15 months can be allowed between two consequent AGMs
Maximum extension allowed of the time limit
On request, ROC may extend the time period for holding the AGM for a maximum period of 3 months
Minutes are the official written recording of the events of the meeting and the business transacted at the meeting. A meeting deemed to be called and held if minutes kept in the prescribed manner. The following points must be kept in mind while maintaining the minutes: