Extension for holding of an Annual General Meetings

In view of the pandemic COVID-19, the Ministry of Corporate Affairs (“MCA”) has issued circular no. 18/2020 (“Circular”) giving relaxation to certain companies for holding of Annual General Meeting (“AGM”).

The Companies Act, 2013 provides that every company is required to convene the AGM within:

• nine months of the end of the financial year, in case it is the first AGM; and

• six months of the end of the financial year, in all other cases.

Further, the AGM should not be held later than fifteen months from the date of last AGM.

The companies whose financial year ending is 31st December, 2019 had expressed difficulty in convening of the AGM due to COVID-19 related social distancing norms and consequential restrictions linked thereto.

In view of the representations, the MCA has granted an extension to companies with financial year ending on 31st December 2019 (other than first financial year), to hold the AGM within nine months of closure of financial year (i.e. by 30 September 2020). Hence, such a delay in holding the AGM shall not be viewed as violation.

The MCA has been very proactive and vigilant about addressing the concerns and practical difficulties that are faced by the companies owing to COVID-19. The MCA intends to protect the interest of shareholders whilst ensuring compliance of law by providing relaxations and extensions, when possible, which is commendable.

Disclaimer

This news flash has been written for the general interest of our clients and professional colleagues and is subject to change. This news flash is not to be construed as any form of solicitation. It is not intended to be exhaustive or a substitute for legal advice. We cannot assume legal liability for any errors or omissions. Specific advice must be sought before taking any action pursuant to this news flash.

For further clarification and details on the above, you may write to Mr. Vaishakh Kapadia (Partner) at [email protected], Mr. Ankit Parekh (Associate) at [email protected] and Mr. Vinit Shah (Associate) at [email protected].