Ministry of Corporate Affairs has surprised all by issuing a circular No 28/2020 dated 17th August 2020 clarifying about the extension of holding Annual General Meeting for the companies completing their financial year as at 31st March 2020.
The companies which are unable to hold their AGM for the financial year ended on 31.03.2020, ought to file their application in Form GNL-1 for seeking an extension of time in holding of AGM for the financial year ended on 31st March 2020 with the concerned Registrar of Companies on or before 29th September 2020.
Procedure to seek an extension of 2020 AGM
1) Hold Board Meeting for approving the extension of the AGM
2) After the Board Approve the proposal, make application to Registrar in Form GNL- 1 till 29th September 2020.
3) Due to Covid-19, the Registrar of companies is hereby advised to consider all such applications (Filed in GNL-1) liberally in view of hardship faced by stakeholders and to grant an extension for the period as applied for (Up to Three Months).
4) A true copy of Board resolution and reason for extension (Covid 19) to be attached and mentioned with GNL-1
5) The Registrar of Companies shall issue Certificate of Extension of Annual General Meeting upon submission of all required documents. However, there is a provision in the act which give power to Registrar of Companies to extend the time for holding of the AGM maximum by 3 months
Consequences of failing to hold AGM in time
If a a company fails to hold the AGM within the due date then, such a company is liable for penalties u/s 99 of the Companies Act, 2013 i.e. (complying with any directions of the Tribunal, the company and every officer of the company who is in default shall be punishable with a fine which may extend to one lakh rupees and in the case of continuing default, with a further fine which may extend to five thousand rupees for every day during which such default continues).
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