MCA Extends deadline for Holding AGM for FY 2019-20 till 31st December, 2020.

As we all are aware of the situation of COVID out break and due to the current situation and the Government’s guidelines of Social distancing and safety measures, it is challenging to meet the daily needs of doing business. Amongst a lot of other compliance holding of an AGM is one of the important Compliance that every company registered in India has to fulfill. Now the MCA has announces extension in the deadline / due date for holding an AGM for the FY 2019-20.

Provisions of Holding of an Annual General Meeting

Section 96 of Companies Act 2013 provides the provisions relating to holding of an AGM, which are as follows:

In case of first AGM of the Company:

• For newly registered company, it is not necessary to hold the AGM in the year of its Incorporation.
• However, AGM shall be held within a period of 9 months from the date of closing of the first financial year of the company.

In case of Subsequent AGM of the Company:

• After the first AGM, Holding an AGM becomes Annual Exercise.
• All the subsequent AGM shall be held Within a period of 6 months, from the date of closing of the financial year.

Extension in the due date of holding of an AGM for the FY 2019-20

• Other than for the first AGM, the Registrar may grant an extension of AGM for not exceeding three months if there is any special reason persists.
• Due to the current pandemic situations, companies aren’t able to hold their AGM as there are restriction on the physical movement and Social distancing norms.
• Because of the above reason, the MCA has received several representations for the extension of date of holding of an Annual General meeting.
• The MCA is satisfied that it is difficult for the companies to hold their Annual general meeting (AGM) for the FY 2019-20 by the stipulated timeline which is 30.09.2020.
• Now the MCA has directed all the ROCs (Registrar of the Companies) across the countries to issue for an extension of the deadline (Due date) for conducting of an AGM till 31st December, 2020.
• As directed by the MSC, the ROCs have extended the time / deadline to hold AGM, other than the first AGM, for the financial year ended on March 31, 2020 till 31st December, 2020.
• The ROCs further explained that the companies will be required to file the form No. GNL-1 to seek such extension.
• The extension granted under this Order shall also cover the pending applications filed in Form No. GNL-1 for the extension of AGM for the financial year ended on 31.03.2020, which is yet to be approved.
• Also, the applications filed in Form No. GNL-1 for the extension of AGM for the financial year ended on March 31, 2020, which were rejected, where the approval for extension of AGM up to 3 months from the due date of the AGM shall be deemed to have been granted without any further action on the part of the company.

It would be interesting to note here that earlier The Ministry of Corporate Affairs (MCA)  allowed the companies to hold their annual general meeting (AGM) by Video Conferencing (VC) or other audio visual means (OAVM) during the calendar year 2020 amidst the COVID-19 crisis. And this further extension in the deadline for conducting an AGM shall be a big relief for the companies facing problems due to the current pandemic situations. The companies have welcomed this move by the Ministry of Corporate Affairs.

Suggested Read: Various steps taken by the Government of India amid Covid 19 outbreak.