Annual General Meeting (AGM) and Extraordinary General Meeting (EGM)

Annual General Meeting (AGM) and Extraordinary General Meeting (EGM)

The Annual General Meeting is the one occasion each year when a company's shareholders formally meet the board, review performance, approve accounts, and vote on key resolutions. An Extraordinary General Meeting, by contrast, is called for urgent or special business that cannot wait for the next AGM. Getting the timing, notice, and agenda right for these meetings is fundamental to shareholder democracy under the Act.

•      First AGM: within 9 months from the closing of the first financial year (no extension needed even if this exceeds 6 months from year-end).

•      Subsequent AGMs: within 6 months from the close of the relevant financial year.

•      Gap between two AGMs must not exceed 15 months.

•      Must be held on a day that is not a national holiday, during business hours (9 a.m. to 6 p.m.), at the registered office or a place within the city/town/village where the registered office is situated (relaxed for certain companies conducting AGM via VC/OAVM).

•      One Person Companies are exempt from holding an AGM.

An EGM may be called by the Board on its own motion, or must be called on the requisition of members holding at least 10% of paid-up voting share capital (or 10% of total voting power in case of a company without share capital). If the Board fails to call the meeting within 21 days of a valid requisition, the requisitionists themselves may call the meeting.

A clear 21 days' notice must be given for both AGM and EGM, in writing, to every member, director, and auditor. A shorter notice may be accepted if consent is given by members holding at least 95% of the paid-up share capital giving a right to vote, or 95% of total voting power in the case of a company without share capital.

•      Consideration and adoption of financial statements and reports of the Board and auditors.

•      Declaration of dividend, if recommended by the Board.

•      Appointment/reappointment of directors retiring by rotation.

•      Appointment and fixing of remuneration of auditors.

MCA has, through a series of General Circulars, permitted companies to hold AGMs and EGMs through VC/OAVM, allowing wide participation without requiring physical presence, subject to compliance with e-voting and other procedural safeguards specified in the relevant circulars applicable for the year.

•      Scheduling the AGM too close to the 6-month deadline, leaving no buffer for last-minute issues.

•      Sending notice with less than 21 clear days, without obtaining the requisite 95% shareholder consent for shorter notice.

•      Forgetting to include an explanatory statement for special business items, invalidating that part of the agenda.

•      Not tracking the 15-month maximum gap between two AGMs when the current year's AGM is delayed.

Q1. Can the AGM deadline be extended?

The Registrar may, for special reasons, extend the time for holding an AGM (other than the first AGM) by up to 3 months on an application made in the prescribed manner, though this is granted at the Registrar's discretion.

Q2. Is an OPC required to hold an AGM?

No, One Person Companies are specifically exempt from the requirement to hold an AGM under Section 96.

Q3. What is the difference between ordinary and special business at a general meeting?

Ordinary business covers standard recurring matters like adoption of accounts, dividend declaration, and auditor appointment; special business covers everything else, requiring an explanatory statement under Section 102 explaining the material facts.

Q4. Can shareholders demand a poll instead of a show of hands?

Yes, under Section 109, a poll can be ordered by the Chairman on their own motion or must be ordered on a demand by members holding a specified minimum voting power or paid-up capital.

Q5. Can an AGM be held entirely virtually on a permanent basis?

MCA has permitted AGMs via VC/OAVM through periodic circulars rather than as a permanent standing rule; companies should check the currently applicable circular each year to confirm whether virtual AGMs remain permitted and under what conditions.

Q6. What happens if a company simply does not hold its AGM at all?

Besides penalty under Section 99, any member can apply to the Tribunal under Section 97 to direct that an AGM be called, and the Tribunal can give consequential directions, including that one member present in person or by proxy be deemed to constitute a valid meeting.

Q7. Is a separate notice required for an adjourned AGM?

Generally, no fresh 21-day notice is required for an AGM adjourned for want of quorum if it is reconvened as per the default rule (same day, next week) or as per the Articles, unless the Articles specifically require it.

The AGM is the cornerstone of shareholder oversight, and missing its statutory timeline is one of the more visible and penalised defaults under the Act. Companies should build their financial closing and audit timelines backward from the AGM deadline to ensure there is no last-minute scramble.