In this blog post, Amala Haldar, a student pursuing a Diploma in Entrepreneurship Administration and Business Laws by NUJS, provides information on the meeting premise of an Annual General Meeting.
According to Section 96 of The Companies Act, 2013 every company other than a One Person Company must hold an Annual General Meeting (AGM). Thus, we know how significant it is. Extensive rules are laid out on the procedures of holding an AGM; however, the above question is not frequently addressed when it comes to dealing with the provisions of an AGM. However, through effective interpretation of the Companies Act, 2013 and 1956 the solution can be inferred. But to adhere to the question, the various facets of an Annual General Meeting are to be kept in mind.
The Basics of AGM
Any question relating to Annual General Meetings can be answered only if we know the key terms related to it. Thus starting with the basics is always a good idea. I do not intend to bore you with details, so just a comprehensive gist of the basics is provided below.
What is an AGM?
AGM stands for Annual General Meeting. It is an organized gathering of shareholders and directors of a Company (public or private) held once in every calendar year, the length of time between one to two AGMs cannot be more than 15 months.
If the Board fails to convene its Annual General Meeting in any year, any Member of the company may approach the prescribed authority, which may then directly call for the Annual General Meeting.
How are people informed of the AGM?
Notice in writing of every Meeting shall be given to every Member of the company. Such notice shall also be given to the Directors and Auditors of the company, to the Secretarial Auditor, to Debenture Trustees, if any, and, wherever applicable or so required, to other specific persons.
The notice should clearly state the day, date, time and place of AGM are to be held.
What is meant by place of AGM?
The venue of the Annual General Meeting is considered to be the place of an AGM. According to the law, the place of an AGM should be at the registered office or any other place in the city town or village where the Registered Office is situated.
What is a Registered Office?
A Registered Office is the official address of the company. It is an office which makes the company capable of receiving and acknowledging all communications and notices addressed to it. The company shall furnish verification of the registered office to the registrar within thirty days of incorporation.
The Relevant Sections
There are a few sections that explain the limitations to the place where Annual General Meetings are to be held. However, they are subject to exceptions. The following Sections and their interpretations are as follows:
- Section 96(2): Section 96(2) of the Companies Act, 2013 states that — “Every Annual General Meeting shall be called during business hours, that is between 9 am and 6 pm on any day other than 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.”
It also states that — “Provided that the Central Government may exempt any company from the provisions of this sub-section subject to such conditions as it may impose.”
- Section 166(2): Section 166(2) of the Companies Act, 1956 states that — “Every Annual General Meeting shall be called for a time during business hours, on a day other than a public 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.”
The very reason why we are looking back to the old legislation is that a very precise and unambiguous definition of the phrase –“ or at some other place within the city, town or village in which the registered office of the company is situated.” was provided in the context. Facing controversy relating to the above Section the Department of Company Affairs in the Year 1981 issued a clarification stated that by “some other place within the city, town or village in which the registered office of the company is situated.” it is meant that, AGM can be held at any place within the postal limits of the city in which the registered office is situated. The words of Section 166(2) of the old legislation are identical to the words of Section 96(2), so this clarification is equally applicable in the context of Companies Act, 2013. Thus, it is not necessary to hold the AGM at the registered office, but it should be held at some place within the postal limits of the city in which registered office is situated as deemed convenient by the management.
- Chapter (vii) of Section 96(2): Chapter vii of Section 96(2) of the Companies Act, 2013 states that Government companies can hold Annual General Meetings outside the city or village where the registered office is situated with the permission of the Central Government. Thus, it is an exemption provided under the Companies Act, 2012 whereby with the consideration of the Central Government, Annual General Meetings can be held elsewhere.
Yes, an AGM can be held at any place other than the Registered Office of the Company. On the effective interpretation of the Sections of the Companies Act, 2013 and 1956 respectively, we find that the Annual General Meeting of a Company can be held at any place other than the Registered Office of the Company, but it has to be in the same city, town or village where the Registered Office is situated.
However, certain companies may be exempted from the provisions by the Central Government. In such cases, few conditions may also be imposed by the Central Government as it may deem fit. Thus, it is not a necessity for all Companies to hold their Annual General Meetings at their Registered Office.