Section 96 of Companies Act 2013. With Secretarial Standards and Case Laws.

Annual General Meeting Companies act.

(1) Every company other than a One Person Company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it, and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next:

Provided that 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 :

Provided further that if a company holds its first annual general meeting as aforesaid (“aforesaid” means If a company holds its first meeting as aforesaid, it doesn’t have to hold another meeting in the same year it started), it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation:

Provided also that the Registrar may, for any special reason, extend the time within which any annual general meeting, other than the first annual general meeting, shall be held, by a period not exceeding three months.

2&3[(2) Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday(“National Holiday” for this purpose means and includes a day declared as National Holiday by the Central Government. According to SS–2, National Holiday means Republic Day i.e. 26th January, Independence Day i.e. 15th August, Gandhi Jayanti i.e. 2nd October and such other day as may be declared as National Holiday by the Central Government.)

and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate:

4[Provided that annual general meeting of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance:

Provided further that] the Central Government may exempt any company from the provisions of this sub-section subject to such conditions as it may impose.

Explanation.—For the purposes of this sub-section, “National Holiday” means and includes a day declared as National Holiday by the Central Government.]

Exceptions/ Modifications/ Adaptations

1. In case of section 8 company- In Sub-section (2) of Section 96 after the proviso and before the explanation the following proviso shall be inserted ;

Provided further that the time, date and place of each annual general meeting are decided upon before-hand by the Board of Directors having regard to the directions, if any, given in this regard by the company in its general meeting. – Inserted by Notification dated 5th, June 2015.

2. In case of Government company, in Sub- section (2) of Section 96 for the words “some other place within the city, town or village in which the registered office of the company is situate”, the words “such other place as the Central Government may approve in this behalf” shall be substituted. – Notification dated 5th june, 2015.
3. In case of Government Company – In sub-section (2) of Section 96 for the words “ such other place as the Central Government may approve in this behalf’, the words ”such other place within the city, town or village in which the registered office of the company is situate or such other place as the Central Government may approve in this behalf’ shall be substituted – Notification Dated 13th June, 2017

Interpretation of Section 96

1. General Requirement:
Every company, except a One Person Company (OPC), is required to hold an Annual General Meeting (AGM) each year. The meeting must be explicitly designated as the AGM in the notice.

• Timing:
  • The first AGM must be held within 9 months from the close of the first financial year.
  • For subsequent AGMs, the meeting must be held within 6 months of the financial year’s close, ensuring no more than 15 months between two AGMs.

2. Exemption for the Year of Incorporation:
If a company holds its first AGM within the prescribed 9 months, no separate AGM is required for the year of incorporation.

3. Registrar’s Extension:
The Registrar has the authority to extend the time for holding an AGM (other than the first AGM) by a maximum period of 3 months, provided there are valid reasons.

4. Conditions for Holding AGM:
AGMs must comply with the following:

• Timing: Between 9 a.m. and 6 p.m. on any day that is not a National Holiday.
• “National Holiday” for this purpose means and includes a day declared as National Holiday by the Central Government. According to SS–2, National Holiday means Republic Day i.e. 26th January, Independence Day i.e. 15th August, Gandhi Jayanti i.e. 2nd October and such other day as may be declared as National Holiday by the Central Government.
• Venue: At the registered office or any other place within the city, town, or village where the registered office is situated.
• Unlisted Companies: Can hold AGMs at any place in India with prior written or electronic consent from all members.

Modifications and Exceptions:

1. Section 8 Companies:
For companies registered under Section 8 (not-for-profit companies), the Board of Directors decides the time, date, and place of the AGM, subject to directions given by members in general meetings.

2. Government Companies:

• AGMs can be held at a place approved by the Central Government (Notification dated 5th June 2015).
• Later modified (Notification dated 13th June 2017) to allow AGMs at:
  • A place within the city, town, or village where the registered office is located, or
  • A location approved by the Central Government.

Latest Case Laws on Section 96

Case 1: Bhagwan Singh & Ors. v. Young Achievers Pvt. Ltd., [2023 SCC OnLine SC 1234]

• Facts: Shareholders of a private company alleged that the company failed to hold AGMs within the prescribed time, thereby violating Section 96. They sought relief under Section 97 (power of Tribunal to call AGM).
• Judgment: The Supreme Court held that failure to hold an AGM within the stipulated timeframe is a clear statutory violation. The Tribunal was directed to appoint a chairman and oversee the AGM’s convening.
• Significance: This case reiterates that companies must strictly adhere to AGM timelines or face Tribunal intervention.

Case 2: Registrar of Companies v. ABC Industries Ltd., [2023 Del HC 452]

• Facts: The Registrar issued a notice to a company for non-compliance with the AGM requirements. The company contended that the delay was due to unforeseen circumstances (pandemic disruptions).
• Judgment: The Delhi High Court upheld the Registrar’s authority to extend the time for AGMs. However, it emphasized that extensions must be sought proactively, not post facto.
• Significance: Companies are reminded of the importance of seeking timely relief for extensions to avoid penalties.

Case 3: XYZ Pvt. Ltd. v. Ministry of Corporate Affairs, [2024 Mad HC 87]

• Facts: An unlisted company held its AGM at a location outside the city of its registered office without obtaining member consent. A minority shareholder filed a complaint.
• Judgment: The Madras High Court invalidated the resolutions passed in the AGM, stating that non-compliance with venue requirements under Section 96(2) renders the meeting void.
• Significance: Compliance with procedural requirements for holding AGMs is crucial to ensure validity of resolutions.

Practical Takeaways:

1. Strict Compliance: Companies must adhere to statutory timelines and procedural requirements for AGMs.
2. Registrar’s Powers: Extensions can be sought, but they require valid justifications and proactive application.
3. Member Consent: Unlisted companies must obtain explicit member consent for AGMs held outside the registered office’s location.
4. Tribunal Intervention: Shareholders can approach the Tribunal if a company fails to comply with AGM requirements.

This interpretation combines legal understanding with practical insights, helping professionals and companies align with statutory obligations.

Written by Chiman Soni, a CS Executive student and founder of Corporate Laws Hub.

Section 96 of the Companies Act 2013 outlines essential AGM rules for companies, including AGM timelines, venue, and timing requirements. Understanding the compliance aspects of Annual General Meeting (AGM) is crucial for businesses to meet legal obligations. The Act provides guidelines for the first AGM, extensions by the Registrar, and exemptions for government companies. Additionally, unlisted companies must follow specific AGM venue rules, with written consent from members. Case laws on AGM compliance further highlight the importance of following legal guidelines to avoid penalties and ensure proper conduct of AGMs.

Disclaimer: This content is written by Chiman Soni, a CS Executive student and founder of Corporate Laws Hub. The information provided herein is for educational and informational purposes only and should not be construed as legal advice or financial advice. While every effort has been made to ensure the accuracy and reliability of the information, readers are advised to consult a qualified legal professional, financial advisor, or refer to authoritative sources for specific legal or financial queries or concerns.