Corp affairs ministry grants companies two months extension to hold AGMs

According to Company Law, not more than 15 months should pass between the dates of two consecutive annual general meetings

The Ministry of Corporate Affairs has allowed a two-month extension to the deadline for companies to hold their annual general meeting for the financial year ended March 31, 2021.

The government said it had received many representations seeking extension of time, citing difficulties due to the second wave of the Covid-19 and the consequent lockdowns. MCA has asked the registrar of companies to approve the extension of the time limit to hold the AGM.

According to Company Law, not more than 15 months should pass between the date of one annual general meeting of a company and the next. “In the 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,” section 96 of the Companies Act says.

Experts said that the MCA’s decision to extend the reporting timelines for holding AGMs due to the Covid-19 related disruptions during 2020-21 is a welcome relief for corporate India. “This is especially helpful for SMEs and our start ups since they have been facing several difficulties including business disruptions, changes in operating models, work from home and availability of people,” said Khazat Kotwal, partner, Deloitte India.

Earlier in June MCA had allowed board meetings through video conferencing for activities that were earlier restricted for the digital medium, in a move to ease the burden on companies to hold physical meetings even beyond the pandemic.

Companies were not allowed to hold the audit committee meetings for consideration of accounts through video conferencing earlier. Approval of  matters relating to amalgamation, merger, demerger, acquisition and takeover also required physical meeting.