AGM Under the Companies Act, 2013—What the Law Really Expects From Companies
Every company has meetings.
Board meetings.
Committee meetings.
Strategy discussions.
But there is one meeting that stands above all others.
The annual general meeting.
Under Indian company law, this meeting is not a formality. It is a statutory obligation, deeply connected to shareholder rights, transparency, and accountability.
That’s why when people search for the AGM section of the Companies Act 2013, they almost always land on Section 96.
And for good reason.
The Core AGM Section in Companies Act, 2013
The main legal provision governing AGMs is Section 96 of the Companies Act, 2013.
This section makes one thing very clear:
👉 Every company (except a One Person Company) must hold an Annual General Meeting every year.
No exceptions for:
- inactivity
- low turnover
- internal disputes
If the company exists, AGM must happen.
What Is an Annual General Meeting?
An annual general meeting is the yearly meeting of shareholders where the company:
- presents its financial statements
- reports performance
- appoints or reappoints auditors
- declares dividends (if any)
- answers shareholder questions
In simple words, it’s the company’s yearly accountability session.
Why AGM Is So Important in Company Law
The Board manages the company.
But shareholders own it.
The AGM is the bridge between the two.
Without AGMs:
- shareholders lose visibility
- directors avoid scrutiny
- governance collapses
That’s why the law treats AGM seriously.
Section 96 – The Timeline Rules You Cannot Ignore
This is where most mistakes happen.
Section 96 lays down three crucial timeline rules.
1. AGM Must Be Held Every Year
This sounds obvious, but it matters.
You cannot skip AGM just because:
- business was slow
- directors were busy
- accounts were delayed
The obligation exists regardless.
2. AGM Must Be Held Within 6 Months of Financial Year End
For most companies, the financial year ends on 31 March.
So AGM must be held by 30 September.
This is the standard deadline.
3. Maximum Gap of 15 Months Between Two AGMs
Even if timelines get adjusted due to extensions, the law says:
👉 The gap between two AGMs cannot exceed 15 months.
This prevents companies from indefinitely postponing shareholder meetings.
First AGM—A Slightly Different Rule
New companies get a small breather.
The first AGM can be held within:
- 9 months from the end of the first financial year
But only once.
After that, normal Section 96 rules apply.
Which Companies Are Exempt From AGM?
Only One Person Companies (OPCs) are exempt.
Every other company must hold an AGM.
Private companies.
Public companies.
Listed companies.
Unlisted companies.
Everyone else complies.
Time, Day, and Place of AGM—Yes, It Matters
Section 96 does not stop at “hold a meeting.” ”.
It also governs:
- time
- location
- working day requirement
AGM must be:
- held during business hours
- on a day that is not a national holiday
- at the registered office or within the same city/town/village
These rules ensure accessibility for shareholders.
Can AGM Be Held on Video Conference?
This depends on MCA relaxations.
Under normal circumstances:
- AGMs are physical meetings
However, temporary relaxations (like during COVID) allowed virtual AGMs.
But those are exceptions, not permanent rights.
Always check current MCA notifications.
What Happens If AGM Is Not Held?
This is where consequences begin.
Failure to hold an AGM leads to:
- penalties on company
- penalties on officers
- shareholder complaints
- possible NCLT intervention
The Registrar of Companies takes AGM defaults seriously.
Penalty for Non-Compliance Under Section 96
If AGM is not held:
- company is liable to fine
- directors/officers are personally liable
And no, “oversight” is not an excuse.
AGM Notice – Sections 101 to 107 Come Into Play
While Section 96 mandates AGM, the procedure is governed by Sections 101 to 107.
These sections deal with:
- notice period
- quorum
- voting
- proxies
- chairman duties
Skipping procedural compliance can invalidate the AGM itself.
Notice Period – Section 101
AGM notice must be sent:
- at least 21 clear days before the meeting
Shorter notice is allowed only with shareholder consent.
No notice = invalid AGM.
Quorum – Section 103
An AGM without a quorum is meaningless.
Section 103 ensures:
- minimum number of shareholders are present
Without a quorum, no business can be transacted.
Voting and Proxies—Sections 105–107
Shareholders can:
- vote personally
- appoint proxies
- demand polls
These rights protect minority shareholders.
Role of Secretarial Standards in AGM
Apart from the Act, Secretarial Standard-2 (SS-2) governs AGM procedure.
It lays down:
- agenda structure
- conduct rules
- minute-keeping standards
Ignoring SS-2 can attract secretarial audit remarks.
Common AGM Mistakes Companies Make
From real-world experience, these are frequent:
- late AGM without extension
- incorrect notice wording
- mismatch between AGM and AOC-4 filing
- quorum issues
- incomplete minutes
Each mistake compounds compliance risk.
AGM and Annual Filings Are Deeply Connected
AGM is not an isolated event.
It triggers:
- AOC-4 filing
- MGT-7 filing
- auditor confirmations
No AGM = filings stuck.
Why Shareholders Care About AGM
For many shareholders, AGM is the only direct interaction with management.
It’s where:
- tough questions are asked
- accountability is demanded
- future direction is discussed
Skipping AGM erodes trust.
AGM in Simple Language
If a company:
- exists, and
- has shareholders
Then an annual general meeting is mandatory.
That’s the essence of the AGM section of the Companies Act 2013.
Final Thoughts
To summarize clearly:
- Section 96 is the core AGM provision
- Every company (except OPC) must hold AGM annually
- AGM must be held within 6 months of financial year-end.
- The gap between AGMs cannot exceed 15 months
- Sections 101–107 and Secretarial Standards guide procedure
AGM is not paperwork.
It is governance in action.
🔗 Missed AGM or Unsure About Compliance?
Many companies realize AGM issues only when ROC notices arrive or annual filings get blocked. Whether it’s a delayed AGM, notice defects, quorum issues, or alignment with AOC-4 and MGT-7, fixing things early avoids penalties and stress. You can explore professional assistance for AGM compliance, annual filings, and Companies Act advisory services at Callmyca.com.
