Meaning and Importance

The Annual General Meeting (AGM) is the mandatory yearly assembly of a company's shareholders under Section 96. It is the principal forum for shareholder democracy — where members review company performance, approve accounts, declare dividends, appoint directors, and fix auditors' remuneration. Every company except a One Person Company (OPC) must hold an AGM.

Key Legal Provisions

• Frequency: at least once every calendar year; the gap between two successive AGMs must not exceed 15 months.
• Time limit: within 9 months from the close of the first financial year, and within 6 months from the close of subsequent financial years.
• Time and place: during business hours (9 AM – 6 PM) on a day that is not a national holiday; at the company's registered office or within the city/town/village where the registered office is situated.
• Notice: at least 21 clear days' written notice to every member, director, and auditor; shorter notice permissible with consent of 95% of members entitled to vote.

Ordinary Business at AGM

• Consideration and adoption of financial statements (Balance Sheet, P&L, Director's Report, Auditor's Report).
• Declaration of dividend.
• Appointment/re-appointment of retiring directors.
• Appointment of Statutory Auditors and fixing their remuneration.

Consequences of Non-holding

If a company fails to hold its AGM, any member may apply to the National Company Law Tribunal (NCLT) under Section 97, which may call or direct the calling of an AGM. The company and every defaulting officer are also liable to a penalty of ₹1 lakh, plus ₹5,000 per day of continuing default.

Meaning and Statutory Basis

The Annual General Meeting (AGM) is the mandatory yearly assembly of every company's shareholders, governed by Section 96 of the Companies Act, 2013. It is the premier forum for shareholder democracy, accountability, and transparency. Every company (except a One Person Company) must hold an AGM.

Legal Requirements

• Frequency: at least once per calendar year; maximum gap between two successive AGMs is 15 months.
• Time limit: within 9 months from close of the first financial year; within 6 months from close of subsequent financial years.
• Day and time: during business hours (9 AM–6 PM) on a day that is not a national holiday.
• Place: at or near the registered office of the company (in the same city/town/village).
• Notice: at least 21 clear days in writing to every member, director, and auditor; shorter notice allowed with consent of 95% of members entitled to vote.
• Quorum: as per Section 103 — 2 members (private company); 5/15/30 members (public company) depending on total membership.

Business Transacted at AGM

• Ordinary Business: adoption of financial statements and reports; declaration of dividend; appointment/re-appointment of retiring directors; appointment of auditors and fixing their remuneration.
• Special Business: any other matter (e.g., alteration of AoA, increase in authorised capital, appointment of MD) that does not fall under ordinary business — requires an explanatory statement under Section 102.

Default and Consequences

If a company fails to hold its AGM, any member may apply to the NCLT under Section 97 to call the meeting. The company and every officer in default face a penalty of ₹1 lakh, plus ₹5,000 per day of continuing default.