the practical aspects of conducting an AGM and compliance requirements under the Companies Act, 2013.

 the practical aspects of conducting an AGM and compliance requirements under the Companies Act, 2013.

1. Steps to Conduct an AGM

a. Planning the AGM:

• Set a Date: Ensure the AGM is held within 9 months from the end of the company’s first financial year and within 15 months from the last AGM.

• Choose the Venue: The AGM can be held at the company’s registered office or any location that is accessible to shareholders.

• Time and Duration: Plan for a time that’s convenient for shareholders to attend (typically in the afternoon or evening).

• Agenda: Prepare a detailed agenda for the meeting. This could include:

  • Approval of financial statements.

  • Appointment/reappointment of directors.

  • Approval of dividend declaration.

  • Appointment or reappointment of auditors.

  • Any special business that requires a special resolution.

b. Notice of the AGM:

• Draft and Send the Notice: The notice must be sent to all members, directors, and auditors at least 21 clear days before the meeting.

  • Mode of Notice: It can be sent by post, email, or newspaper (depending on the company’s practice).

  • The notice should include the date, time, and venue of the meeting along with the agenda and resolutions to be passed.

c. Proxy Appointment:

• Proxy Forms: Shareholders who cannot attend the AGM can appoint a proxy to vote on their behalf. The proxy form should be received at least 48 hours before the AGM.

  • Ensure proxies are submitted in proper format and have no conflicts with resolutions being voted on.

d. Quorum Check:

• Minimum Shareholders: Ensure the required quorum is present for the meeting to be valid:

  • Private companies: Quorum is typically 2 members.

  • Public companies: Usually 2 members, but it can vary depending on the articles of association.

• If quorum is not achieved within 30 minutes from the scheduled time, the meeting may be adjourned.

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2. Key Resolutions to be Passed at the AGM

a. Ordinary Resolutions:

• These resolutions require a simple majority (more than 50% of votes) and are used for routine matters such as:

  • Approval of Financial Statements.

  • Dividend Declaration.

  • Appointment/Reappointment of Directors (if retiring by rotation).

  • Appointment of Auditors.

b. Special Resolutions:

• These resolutions require a three-fourths majority of the members present and voting. They are usually passed for:

  • Altering the Articles of Association.

  • Changing the name or address of the company.

  • Approving mergers, acquisitions, or other significant corporate changes.

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3. After the AGM – Key Compliance Steps

a. Filing with Registrar of Companies (RoC):

• Form MGT-7 (Annual Return): This form must be filed within 60 days from the date of the AGM. It includes:

  • Details of shareholders and directors.

  • Shareholding pattern.

  • Directors’ report and auditor’s report.

• Form AOC-4 (Financial Statements): This must be filed within 30 days from the AGM with the RoC.

  • It contains the audited balance sheet, profit & loss account, and cash flow statement.

b. Minutes of the AGM:

• Minutes of the Meeting: Prepare and sign the minutes of the AGM and ensure that they are recorded in the minutes book.

  • These minutes should reflect all resolutions passed, votes cast, and other key discussions.

c. Documentation:

• Ensure all proxy forms, attendance registers, and voting papers (if applicable) are maintained properly for future reference.

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4. Consequences of Non-Compliance with AGM Requirements

a. Penalties:

• Failure to Hold AGM: If the company fails to hold an AGM, the company and every officer in default can be fined under Section 99 of the Companies Act, 2013. The penalty can range from ₹1 lakh to ₹5 lakh.

b. Late Filing:

• Late Filing of Returns (Form MGT-7 and AOC-4): If returns are not filed on time, the company could be subject to penalties under Section 92 and Section 137.

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5. Practical Examples of AGM Compliance

Example 1: Infosys Ltd. AGM

• Infosys holds its AGM virtually, where shareholders can participate remotely, ask questions, and vote electronically.

• The financial statements are presented with detailed insights into revenue growth, strategic goals, and upcoming projects.

• Shareholders approve the dividend declaration, appoint or reappoint directors, and vote on resolutions to enhance corporate governance.

Example 2: HDFC Ltd. AGM

• HDFC Ltd. ensures that its AGMs are transparent and follow best practices of corporate governance. Shareholders approve the financial reports, and key business decisions like mergers and corporate restructuring are discussed and voted on.

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6. Checklist for AGM Preparation and Compliance

1. Pre-AGM:

   • Ensure the AGM date complies with legal timelines.

   • Prepare a draft notice with all required information.

   • Send the notice to all shareholders at least 21 days in advance.

   • Prepare financial statements and auditor’s reports.

   • Prepare proxy forms and other documents.

2. During the AGM:

   • Ensure quorum is present before starting the meeting.

   • Follow the agenda and pass resolutions (both ordinary and special).

   • Record minutes of all discussions and resolutions.

3. Post-AGM:

   • File Form MGT-7 and AOC-4 with the Registrar of Companies within the prescribed timelines.

   • Maintain proper documentation for all proceedings (proxies, minutes, resolutions).