According to the provisions of section 166, all public and private companies which come under the provisions of the Companies ACT of 1956, shall hold a general meeting of members every year. This shall be referred to as ‘Annual General Meeting’. It shall be compulsory for all companies to have an annual general meeting, once every calendar year.
Every company shall hold an Annual General Meeting every year. In an ideal situation, there shall only be a gap of 15 months or less between each of these meetings. With respect to the provisions made under Section 210, within a half year of the end of every financial year, the specified annual general meeting should be held. During this meeting, the accounts of the entire year shall be considered. According to this rule, any company whose financial year ends on the 31st of March should have its annual general meeting on or before September 30th of that year..
|Date of incorporation of company||23-10-2007|
|Date by which the first annual general meeting ought to be held||22-04-2009|
The holding of the first annual general meeting shall comply with the following criteria of the Act:-
|The time period between the meeting and the last day of the accounting period should not be more than 9 months||23-10-2007|
|The second annual general meeting needs to be held in the third year of Incorporation of each company. Hence, in the above example, if the first accounts are for the time starting from||31-3-2008|
|The first annual meeting should be held within a span of 9 months, i.e., on or before||31-12-2008|
|For the next period, the first accounts will be held on||31-03-2009|
|The second AGM will be held during the 3rd year of incorporation, i.e., on or before||30-09-2009|
In the example given above, as it was proposed that the first accounts will be closed on 31-03-2008, the first annual meeting should be held on or before 31-12-2008, and during the third year of the incorporation of company in india , the second annual general meeting can be held.
During the first year of its inception, 2007, there would be no need to have the annual general meeting.
As it has been mentioned previously, each company needs to have an annual general meeting every year, and ideally there should only be a gap of fifteen months or less between any two such meetings. Also, according to the terms mentioned in section 210, an AGM has to be held before the close of six months after the end of a financial year. During this annual general meeting, the accounts of that particular year need to be considered. Taking this rule further, it is stipulated that any company with its financial year ending on 31st March, needs to hold its annual general meeting on or before September 30th every year.
All public or private companies, and also all companies that have a share capital and companies that do not have a share capital, are required to go to the Registrar and file their annual returns within sixty days after the day on which each company holds its annual general meeting.
If the annual returns are not filed according to the stipulations, the company has to face sever consequences. Any company that does not comply with the terms mentioned in the sections 159, 160, or 161, along with every officer in its payroll can be punishable with a fine of five hundred rupees for each day the company is in default for. The fine is levied for each day until the company fulfills all the provisions mentioned. The director of any company that does no file its annual returns for three financial years in succession, shall not be eligible to be appointed as the director for any other public company. This stipulation holds up to a period of five years from the date on which the company, of which the person in question was a director of, had defaulted from paying the annual returns.
Twelve months is the duration of a financial year and a company’s accounts for a financial year need to be placed during the commencement of that annual general meeting. However, the financial year in some cases can be more than twelve months or in some cases less than twelve months. In such cases, the first annual general meeting shall be held before the completion of fifteen months.
The power to extend a financial year to eighteen months is vested with the Registrar, according to the provisions of the section 210 (4) of the Act. For such cases, the company has to make an application in the specified e-Form 61 with the Registrar before the due date before the completion of the financial year. A letter could be used as a medium to make this application, giving a certifiable justification for appealing to extend the time certified by a practicing chartered accountant or company secretary or cost accountant.
When a company has applied for the extension of its financial year and to that effect requires more time in order to hold its annual general meeting, it needs to submit an application with the Registrar of companies in the e-form 61 to extend the duration of its financial year in section 210 (4) and to extend the time period within which it needs to hold the annual general meeting under section 166 (1).
According to the Income-tax Act, 1961, the term ‘previous year’ means the financial year immediately before the assessment year. Also, for the mentioned Act, from the assessment year 1989-90, the companies including assesses needed to declare their income every year as on 31st March. From the said assessment year, the only thing required to be done is to make up the account as on 31st March, in order to submit the Income-Tax return.