Extension of holding of AGM by companies, whose financial year has ended on 31st December, 2019 due to COVID-19

Extension of holding of AGM by companies, whose financial year has ended on 31st December, 2019 due to COVID-19

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 bv 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.

Link: http://www.mca.gov.in/Ministry/pdf/Circular18_21042020.pdf

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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