The ministry of corporate affairs has clarified that companies whose annual general meetings are due in 2021 have to conduct them within the specified time limit and video conferencing is allowed till June 30,2022.
MCA has said that its circular should not be construed as conferring any extension of time for holding annual general meetings by the companies under the Companies Act, 2013.
“Companies which have not adhered to the timelines shall be liable to legal action under the appropriate provisions of the Act,” MCA said.
In September, MCA had allowed a two-month extension to the deadline for companies to hold their annual general meeting for the financial year ending March 31, 2021.
“Thanks to video conferencing tools, companies can now make their AGM more interactive, engaging, and transparent in an increasingly remote working environment. Companies must adhere to deadlines as the MCA has not granted any extensions,” said Sonam Chandwani, managing partner at KS Legal & Associates.
Chandwani said that when the MCA first issued a notification permitting corporations to conduct AGMs remotely, there was some uncertainty as to whether this meant an extension of the timelines.
“However, the MCA has clarified the timelines and has not given any extensions at this time,” she added.
According to the Company Law, not more than fifteen months should elapse between the date of one annual general meeting of a company 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.