Companies get 2-month extension to hold AGMS

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

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

According to the Companies Act, not more than 15 months should elapse between the date of one AGM and the next. “In 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 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.

According to Companies Act, not more than 15 months should elapse between the date of one AGM of a company and the next