Holding of annual general
meetings by companies, whose financial year has ended on 31st December, 2019
In the wake of pandemonium caused
by spread of the COVID-19 virus, several representations have been received
from stakeholders with regard to difficulty in holding annual general meetings
(AGMs) for companies whose financial year ended on 31st December, 2019 due to
COVID-1 9 related social distancing norms and consequential restrictions linked
thereto.
These representations have been
examined and it is noted that the Companies Act, 2013 (Act) allows a company to
hold its AGM within a period of six months (nine months in case of first AGM)
from the closure of the financial year and not later than a period of 15 months
from the date of last AGM
The following measures have been
undertaken by both, the Ministry of Corporate Affairs (MCA) and the Securities
and Exchange Board of India (SEBI) to provide relief to the stakeholders
MCA vide General Circular No.
18/2020 dated 21st April, 2020 states:
1. Several representations have
been received from stakeholders with regard to difficulty in holding annual
general meetings (AGMs) for companies whose financial year ended on 31st
December, 2019 due to COVID-1 9 related social distancing norms and consequential
restrictions linked thereto. These representations have been examined and it is
noted that the Companies Act, 2013 (Act) allows a company to hold its AGM
within a period of six months (nine months in case of first AGM) from the
closure of the financial year and not later than a period of 15 months from the
date of last AGM .
2. On account of the difficulties
highlighted above, it is hereby clarified that if the companies whose financial
year (other than first financial year) has ended on 31st December, 2019, hold
their AGM for such financial year within a period of nine months from the
closure of the financial year (i.e. by 30th September, 2020), the same shall
not be viewed as a violation. The references to due date of AGM or the date by which the AGM should have been held under the Act or the rules made thereunder
inalt Oe construed accordingly.
3. This issues with the approval
of the competent authority.
DISCLAIMER: THE ARTICLE IS BASED ON THE RELEVANT PROVISIONS AND AS PER
THE INFORMATION EXISTING AT THE TIME OF THE PREPARATION. IN NO EVENT I SHALL BE
LIABLE FOR ANY DIRECT AND INDIRECT RESULT FROM THIS ARTICLE. THIS IS ONLY A
KNOWLEDGE SHARING INITIATIVE.
THE
AUTHOR – CS DEEPAK SETH (ASSOCIATE PARTNER AT HELPINGHANDS PROFESSIONALS LLP) AND CAN
BE REACHED AT CONTACTHHPRO@GMAIL.COM
OR 9910248911.
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