How to Conduct an AGM Under the Companies Act, 2013

An Annual General Meeting (AGM) is one of the most important statutory requirements for companies registered in India. Under the Companies Act, 2013, every company except a One Person Company (OPC) must hold an AGM every year to ensure transparency, accountability and effective participation of shareholders.

This guide provides a fully updated, legally aligned step-by-step procedure for conducting an AGM in accordance with the Companies Act, 2013 and Secretarial Standard-2 (SS-2).

What is an AGM?

An Annual General Meeting (AGM) is a mandatory yearly meeting of shareholders where matters related to financial performance, governance, major decisions and management accountability are discussed and approved. It gives shareholders the right to question the management and vote on key decisions.

Legal Provisions Governing AGM

The conduct of AGM is primarily governed by: -

• Section 96 – AGM requirements & timelines.
• Section 101 – Notice of AGM.
• Section 102 – Explanatory Statement.
• Section 103 – Quorum.
• Section 104 – Chairman of the Meeting.
• Section 105 – Proxies.
• Section 108 – E-Voting.
• Secretarial Standard-2 (SS-2) – Conduct of General Meetings.

These provisions ensure that AGMs are conducted in a uniform and legally compliant manner.

When Should an AGM Be Held? (Statutory Timelines)

A. First AGM

A newly incorporated company must hold its first AGM:

• Within 9 months from the end of its first financial year.

B. Subsequent AGMs

Every other AGM must be held:

• Within 6 months from the end of the financial year.
• The gap between two AGMs must not exceed 15 months.

C. Time & Place of AGM

As per Section 96 and SS-2:

• Must be held during business hours (9 AM to 6 PM)
• Not on a National Holiday
• At the Registered Office or any other place within the same city/town/village
• Unlisted companies may hold AGM at any place in India with consent of all shareholders

Business Transacted at an AGM

a) Ordinary Business (Mandatory)

1. The following items must be transacted at every AGM: -
2. Adoption of financial statements
3. Declaration of dividend
4. Appointment/retirement by rotation of directors
5. Appointment or ratification of auditors and fixing their remuneration

b) Special Business

Any business other than ordinary business. Such items require approval through:

• Ordinary Resolution (simple majority), or
• Special Resolution (at least 75% votes cast in favour, unless AOA provides otherwise)

Step-by-Step Procedure to Conduct an AGM

Step 1: Hold a Board Meeting to Approve AGM

The Board must:

• Approve the date, time and venue
• Finalize the Notice & Agenda
• Approve Director’s Report and Financial Statements
• Authorize a Director/Company Secretary to issue notice

Step 2: Issue Notice of AGM (Section 101 & SS-2)

Send 21 clear days’ notice to:

• Members
• Directors
• Auditors
• Debenture trustees (if applicable)

The notice must include:

• Date, day, time, venue
• Full agenda
• Route map of venue (mandatory under SS-2)
• Explanatory Statement for Special Business
• Instructions for proxies
• E-voting process (if applicable)

Shorter Notice:

Allowed if 95% shareholders (in value) consent.

Step 3: Circulate Financial Statements and Reports

Send the following at least 21 days before AGM:

• Audited Financial Statements
• Director’s Report
• Auditor’s Report
• Notes to Accounts

These must also be uploaded on the company's website (if any).

Step 4: Ensure Proper Quorum (Section 103)

Public company:

Private company:

• Minimum 2 members personally present.
• If quorum not present:

Meeting adjourns to same day/time/place next week (or date decided by members).

Step 5: Appointment of Chairman (Section 104)

• The Chairman of the Board presides.

• If absent, members elect a chairman from among themselves.

Step 6: Conduct the AGM as per SS-2

During AGM: -

• Present financial statements
• Read Auditor’s Report and Director’s Report
• Take up each agenda item
• Allow member queries
• Conduct voting (show of hands, poll or e-voting)
• Ensure proper recording of proceedings

A scrutineer is required for e-voting/poll, as per rules.

Step 7: Passing of Resolutions

Types:

1. Ordinary Resolution – simple majority
2. Special Resolution – at least 75% votes unless AOA prescribes higher

Resolutions must be clearly drafted, numbered and signed by Chairman.

Step 8: Prepare and Sign Minutes (Section 118 & SS-2)

Minutes must be prepared within 30 days of AGM

• Signed by Chairman
• Stored in the Minutes Book
• Must be page-numbered and properly maintained

Step 9: Post-AGM Statutory Filings with ROC

Within 30 days:

• AOC-4 – Filing of financial statements
• MGT-14 – If any special resolution or specified board resolution passed

Within 60 days:

• MGT-7 / MGT-7A – Annual Return

Consequences of Not Holding AGM

Failure to hold AGM may result in: -

• Penalties on company and officers
• Director disqualification (in prolonged non-compliance)
• Legal proceedings
• ROC intervention
• Shareholder complaints

Companies may apply to ROC for AGM extension, but only for valid reasons.

Practical Tips for a Smooth AGM

• Prepare documents at least 30 days in advance
• Follow SS-2 meticulously
• Ensure accurate attendance register
• Test e-voting and VC systems (if applicable)
• Avoid last-minute venue or agenda changes
• Keep certified copies of all resolutions

Conclusion 

Conducting an AGM is an important legal requirement designed to promote the key element such as transparency, shareholder involvement and good governance. The Companies Act, 2013 along with SS-2 provides a detailed framework for calling, conducting and concluding an AGM. If you are looking for a professional help then do contact to CRSPL Business Consultants, our legal experts will guide you.

By issuing a proper notice, ensuring quorum, presenting accurate financial statements, permitting fair voting, maintaining minutes and filing statutory forms with the ROC, companies can ensure complete compliance and avoid penalties. A well-organized AGM also helps build shareholder confidence and strengthens corporate credibility.