Complication of National Holiday

Whenever it comes to convene any meeting in the company the first thing is required to decide the time, venue and day of the meeting.

As required in Section 96 of the Companies Act 2013

•   Every company other than one person company shall in each year hold a meeting as its annual general meeting and shall specify the meetings as such in the notices, calling it, and not more than 15 months shall elapse between the date of one annual general meeting and that of next.

•   The first annual general meeting of the company shall be held within 9 months of the closing of the first financial year and the subsequent general meeting shall be held within 6 months of the closing of the financial year.

SIGNIFICANCE OF FINANCIAL YEAR

Section 2(41) of the Companies Act, 2013 defines financial year in relation to any company or body corporate, to mean the period ending on 31^st day of March every year, and where it has been incorporated on or after the 1^st day of January of a year, a financial year means the period ending on 31^st March of the following year, in respect whereof the financial statement is made up.

For example, if a company is incorporated on 2^nd January 2019, its financial year will close on 31^st March 2020.

If a company holds its first annual general meeting as aforesaid, it shall not be necessary for the company to hold any general meeting in the year of its incorporation.

[TIME] AGM shall be held during business hours (9AM to 6PM), AGM shall commence during business hours. however, it may be concluded after business hours.

[DAY] Section 96(2) read with Secretarial Standards 2 provides the provision for holding a AGM on a day which is not a national holiday.

[VENUE] AGM shall be held at the registered office of the company except in case of AGM of an unlisted company, as an unlisted company may hold its AGM at any place in India if consent is given in writing or electronic mode by all the members of the company (in advance).

CONCLUSION – So we can conclude that the Original AGM can’t be concluded on National Holiday.

Analysis on Extraordinary General Meeting.

There is generally a long gap between two AGM (approx gap of 1 year), important between arising between two AGMs that require shareholders approval shall be considered at Extra Ordinary General Meeting.

Situations where EGM may be called.

Elaborating Situation 3.

Section 100 of the Companies Act, 2013 provides that in requisition of members of a company having share capital or not, the Board is required to call and hold an extraordinary general meeting.

Meeting called by the requisitionists shall be called during business hours on a day which is not a National Holiday.

Conclusion- Meeting called by requisitionist can’t be conducted on a National Holiday

Who can make requisition?

 After the brief discussion about the provision of AGM and EGM, let’s deal with some FAQs on National Holiday.

• Whether original AGM can be held on a national holiday?

 No, as Section 96 strictly provides that the AGM shall be called during business hours and on a day which is not a national holiday

• Whether original EGM (other than requisitionists) can be held on a national holiday?

Yes, As SS.2 only restricts AGM or EGM called by requisitionists shall be held during business hours and on a day which is not a national holiday. Thus, neither Section 96 nor SS.2 restricts calling such EGM on National Holiday.

• Whether original EGM called by Board on the requisition of requisitionist can be held on a national holiday?

Yes, because neither Companies Act nor the SS.2 restrict the same.

• Whether an original EGM can be called by requisitionist themselves on National Holiday?

No, Strict prohibition under Rule 17(2) of the Companies (Management and Administration) Rules, 2014.

• Whether Adjourned AGM can be held on national holiday for want of quorum?

Legal Backing – Section 103(2) provides that if the quorum is not present within half-an-hour from the time appointed for holding a meeting of the company the meeting shall adjourn to the same day in the next week at the same time and place or to such other date and such other time and place as the Board may determine.

Conclusion –

No, in case the vacancy of retiring director is not filled-up under section 152(7)

And  in this case, where the meeting has not expressly resolved not to fill the vacancy, the meeting shall be adjourned till the same day in the next week, at the same time and place, or if that day is a national holiday, till the next succeeding day which is not a national holiday, at the same time and place

Yes, in any other case.

There is as such no prohibition to hold adjourned AGM on a national holiday if the meeting is adjourned due to lack of quorum. (Other than in case vacancy of a retiring director is not filled-up under section)

• Whether Adjourned EGM can be held on national holiday for want of quorum?

Legal Backing – Same provision of Section 103(2) as discussed above.

Conclusion – There is as such no prohibition to hold adjourned EGM on a national holiday if the meeting is adjourned due to lack of quorum, therefore EGM adjourned due to want of quorum can be held on a national holiday.

• Whether Adjourned AGM can be held on a national holiday for other than want of quorum?

No, as SS.2 as well as Section 96 strictly provides that the AGM shall be called during business hours and on a day which is not a national holiday, thus from literal interpretation one can opine that if original AGM can’t be held on a national day the adjourned should also not be held on a national holiday.

• Whether Adjourned EGM (called by Board) can be held on a national holiday for other than want of quorum?

Yes, as Original EGM called by Board can be held on a national holiday, there will be no prohibition in holding an adjourned EGM to transact any business left during the original EGM.

• Whether Adjourned EGM called by Board on request of requisitionists can be held on a national holiday for other than want of quorum?

Yes, the same provision of FAQ 8 shall apply to this case as well.

Whether Adjourned EGM ( for want of quorum) called by Board on the request of requisitionists can be held on a national holiday

No, SS.2 restricts the same.

• Whether EGM called by requisitionist suo-moto ( if the board fails) can be held on national holiday for other than want of quorum?

No, if original EGM called by requisitionists suo-moto can’t be held on a national day the adjourned should also not be held on national holiday.

• Whether EGM called by requisitionists suo-moto ( if the board fails) can be held on national holiday for want of quorum

No, as per section 103(2)(b) the meeting shall stand canceled.

ABOUT THE AUTHOR

Aakarshit Jai: Commerce Graduate and Budding Company Secretary.

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