September 2020
On September 8, 2020, the Registrar of Companies (“ROC”) granted an automatic extension of 3 months for holding Annual General Meeting (“AGM”) for Financial Year (“FY”) 2019-20. This comes as a major relief for companies during this pandemic.
What is AGM extension: As per section 96 of the Companies Act, 2013, every company is required to hold its first AGM within 9 months from the end of its first FY and subsequent AGMs within 6 months from the end of every FY. If any company is unable to hold its subsequent AGM on or before the due date i.e. September 30, it can apply for extension of a maximum of 3 months in form GNL-1 with concerned ROC.
Previous amendments: Previously, by a General Circular 20/2020 dated May 5, 2020, the Ministry of Corporate Affairs (“MCA”) allowed companies (whose FY ended on March 31, 2020) to convene their AGM on or before September 30, 2020 through video conferencing or other audio-visual modes and those that could not, had to apply for an extension in form GNL-1.
Further, by a General Circular 28/2020 dated August 17, 2020, the MCA again clarified that if any company is unable to hold its AGM on or before September 30, 2020, it will have to apply for extension on or before September 29, 2020 in form GNL-1. However, the ROCs were advised to consider extension applications liberally in view of the practical difficulties caused due to pandemic.
Recent notification: Now, pursuant to representations made by many stakeholders, each ROC has issued a separate notification granting automatic extension by extending the AGM date for FY 2019-20 from September 30, 2020 to December 31, 2020. There is no requirement for filing form GNL-1. However, this extension is not applicable in case of the first AGM of a company. The ROCs have also clarified that the notification covers all pending and rejected applications, and the extension will be deemed to have been granted without any further action by the company.
By:
Jaya Moorjani