Companies allowed to extend AGMs by up to 3 months

Indian companies are required to hold AGMs within six months of closure of the financial year.

The Ministry of Corporate Affairs has allowed more time for companies that were unable to hold their annual general meetings for the year ending March 31, 2020 despite earlier relaxations asking them to file an application with the registrar of companies for the same, a government circular said.

In a circular dated August 17, MCA has advised the registrar of companies to consider all such applications liberally in view of the hardships faced by the stakeholders.

The RoC can give an extension upto a maximum period of three months.

MCA said it had received several representations from the industry seeking the relaxation to allow them to hold the annual general meeting beyond the statutory period provided under the Companies Act.

The government had issued a circular in May allowing companies to hold AGMs video conferencing or other audio visual means.

Indian companies are required to hold AGMs within six months of closure of the financial year.

“MCA has clarified that blanket extension will not be granted, but each company will have to submit a request in Form GNL-1 and get their individual approval.

"Companies need not wait till end of September to file the request as the approval if denied would culminate into a long drawn process of compounding penalty for the companies,” Mohnish Wadhwa, founder, Wadhwa & Shah, Chartered accountants said.

Industry experts said that the prevailing disruption in logistics due to Covid-19, has brought the audit and compliance work under a lot of strain particularly for mid-size companies.

“The much-awaited move is a relief to small and mid-size corporates that would help them effectively comply without any additional penalty or non-compliance consequence,” Makarand Joshi, partner, MMJC and Associates, a corporate compliance firm.