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Companies get 3-mth extension to hold AGMs

Acceding to the request of companies and industry associations, the Central government has given a three-month extension for compliance requirements. Now, the firms can conduct their annual general meetings (AGMs) till December-end.

According to an estimate, around 70,000 companies are likely to benefit with this decision in the region, comprising Haryana, Chandigarh, Punjab, Himachal Pradesh and J&K and Ladakh.

The Companies Act, 2013, provides that in case of the first AGM of a company, it shall be held within nine months from the date of closure of the financial year whereas in the rest of cases, it shall be held within six months from the date of closure of the financial year.

The new deadline would be applicable only for companies whose financial year ended on March 31, 2020, irrespective of fact whether they have applied for the extension of the AGM or not, according to a circular issued by the Ministry of Corporate Affairs on Tuesday.

“It has been directed by the competent authority that the Registrar of Companies (RoCs) should be directed to accord approval for the extension of three months beyond the due date by which companies are required to conduct their AGMs,” said the circular.

According to the ministry, a company can hold its AGM within six months from the closure of the financial year and not later than 15 months from the date of the last AGM.

In a statement, the ministry said it had received several representations from stakeholders such as companies and industry associations with regard to difficulty in holding AGMs for companies due to the Covid-related restrictions.

“With uncertainty looming over the spread of the Covid, the AGMs of many companies were getting postponed. The industry associations approached us for the relaxation in order to meet regulatory compliance. The ministry has taken the decision to extend it for three months,” said Dr Raj Singh, regional director, Ministry of Corporate Affairs, and in charge of the northern region.