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Changes re AGM
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Companies Act, 1956
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Companies Act, 2013
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Current status
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Maximum time for holding first AGM
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Maximum time for holding first AGM is 18 months from incorporation : Proviso to Section 166 states that first AGM would be conducted within a period of 18 months from incorporation
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Maximum time for holding first AGM is 9 months from closing of financial year : Section 96 states that in case of the first annual general meeting, it shall be held within a period of nine months from the date of closing of the first financial year of the company
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Not in force
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Time and day of conducting AGM
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Section 166(2) : Every annual general meeting shall be called for a time during business hours, on a day that is not a public holiday, and shall be
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Section 96(2): Every annual general meeting shall be called during business hours, that is, between
9 a.m. and 6 p.m. on any day that is not a National Holiday
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Not in force
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Consent for shorter notice
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Section 177(2): Consent to be given by all members entitled to vote at the meeting.
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Section 101: consent to
Given in writing or by electronic mode by not less than ninety-five per cent. of the members entitled to vote at such meeting.
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Not in force
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Statement to be annexed with notice :
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Explanatory statement to be annexed with notice mentions about nature of concern of director and manager: According to section 173 where the business to be transacted at the meeting is special there shall be annexed to the notice a statement settling out all material facts including in particular the nature and concern of if any of director and manager
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Statement annexed with the notice mentions about the nature of concern of the director, manager, key managerial personnel and relatives of directors and key managerial personnel : According to Section 102 the statement annexed to the notice shall contain
(a) the nature of concern or interest, financial or otherwise, if any, in respect of
each items of—
(i) every director and the manager, if any;
(ii) every other key managerial personnel; and
(iii) relatives of the persons mentioned in sub-clauses (i) and (ii);
(b) any other information and facts that may enable members to understand the
meaning, scope and implications of the items of business and to take decision thereon
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In force notified on 12.09.2013
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Quorum for AGM
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According to section 175 the quorum in case of :
a) Private Companies : 2 members
b) Public companies : 5 members
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According to section 103 the quorum is as follows :
a) Private companies : 2 members
b) Public companies if no of members on date of meetings is not more than 1000: 5 members
c) Public companies if no of members on date of meetings is more than 1000 but less than 5000 : 15 members
d) Public companies if no of members on date of meeting exceeds 5000 : 30 members
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In force notified on 12.09.2013
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Annual Return
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a) Annual return to contain particulars as on date of AGM : Section 159 and 160 : The annual return has to be prepared and filed with the registrar containing particulars as on date of agm
b) Particulars to be mentioned in Annual Return , Section 159(1): Details of registered office , register of its members, register of debenture holders, shares and debentures, indebtedness, members and debenture holders past and present, directors, managing directors, managers, secretaries past and present
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a) Annual return to contain particulars as on date of close of financial year : Section 92: According to the new provision every company will prepare an annual return in the prescribed format containing particulars as they stood on the close of financial year
b) Particulars to mentioned in the Annual Return , Section 92(1):
Old requirements which are incorporated : Details of registered office , register of its members, register of debenture holders, shares and debentures, indebtedness, members and debenture holders past and present, directors, managing directors, managers, secretaries past and present
New Requirements which would form a part of particulars to be stated in the Annual Return :
i) Details of principal business activities
ii) Particulars of holding, subsidiary and associate companies,
iii) Details of promoters and key managerial personnel ,
iv) Meetings of members or a class thereof, board and its various committees along with attendance details,
v) Remuneration of directors and key managerial personnel,
vi) Penalty or punishment imposed on the company, its directors or officers and details of compounding of offences and appeals made against such penalty or
punishment,
vi) Matters relating to certification of compliances, disclosures as may be prescribed
vii) Details, as may be prescribed, in respect of shares held by or on behalf of the Foreign Institutional Investors indicating their names, addresses, countries of incorporation, registration and percentage of shareholding held by them, vii) such other matters as may be prescribed
Extract of Annual Return has to be attached to Boards Report : Section 92 (3) states an extract of the annual return in such form as may be prescribed shall form part of the Board’s report.
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Not in force
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Appointment of Auditor
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Auditor to be appointed for a period of one year: Section 224 states that at each AGM, every company shall appoint an auditor or auditors to hold office from the conclusion of that meeting to the next AGM
Intimation re appointment to be given by Auditor to ROC within 30 days : According to section 224 (1) every company is required to give information to the Auditor regarding his appointment within 7 days from his appointment and then the according to section 224(2)auditor has to give information of his accep tance or refusal to ROC by filing a form 23B within 30 days from date of receipt of appointment letter
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Auditors to be appointed for a period of five years : Section 139 states that every company shall, at the first annual general meeting, appoint an individual or a firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting and
thereafter till the conclusion of every sixth meeting and the manner and procedure of selection of auditors by the members of the company at such meeting shall be such as may be prescribed
Intimation re appointment of Auditor to be given by Company to ROC within 15 days : The proviso to Section 139 states the company shall inform the auditor concerned of his or its appointment, and also file a notice of such appointment with the Registrar within fifteen days of the meeting in which the auditor is appointed
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Not in force
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Directors Report
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Additional requirements :
According to Section 134 the directors report will include the following :
(a) the extract of the annual return as provided under sub-section (3) of section 92; (Form No. 7.9. , )
(b) number of meetings of the Board;
(c) Directors’ Responsibility Statement with additional points;
(d) a statement on declaration given by independent directors under sub-section (6) of section 149;
e) particulars of loans, guarantees or investments under section 186;
f) particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed form
g) a statement indicating development and implementation of a risk management
policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company;
h) the details about the policy developed and implemented by the company on corporate social responsibility initiatives taken during the year;
i) such other matters as may be prescribed.
New requirements for Directors’ Responsibility Statement : According to section 134(5) the Directors Responsibility statement will include the following additional requirements
a) in case of a listed company and every other public company having such paid-up share capital as may be prescribed, a statement indicating the manner in which
formal annual evaluation has been made by the Board of its own performance and that
of its committees and individual directors;
b) statement that directors had devised proper systems to ensure
Compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
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Not in force
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Books of Account
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Comprises of Balance sheet and profit and loss
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Concept of Balance Sheet and profit and loss now collectively termed as Financial Statement:
Definition of Financial Statement : Section 2(40) states that financial statement” in relation to a company, includes—
(i) a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure account for the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv):
Provided that the financial statement, with respect to One Person Company, small company and dormant company, may not include the cash flow statement;
Requirements of Financial Statements : Section 129 states that (1) The financial statements shall give a true and fair view of the state of affairs of the company or companies, comply with the accounting standards notified under section 133 and shall be in the form or forms as may be provided for different class or classes of companies in Schedule III:
Provided that the items contained in such financial statements shall be in accordance
with the accounting standards:
Additional Requirements when company has one or more subsidiaries : According to section 129(3) Where a company has one or more subsidiaries, it shall, in addition to financial
statements provided under sub-section (2), prepare a consolidated financial statement of the
company and of all the subsidiaries in the same form and manner as that of its own which
shall also be laid before the annual general meeting of the company along with the laying of
its financial statement under sub-section (2):
Also Provided that the company shall also attach along with its financial statement, a separate
statement containing the salient features of the financial statement of its subsidiary or
subsidiaries in such form as may be prescribed:
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Section 2(40) in force by notification dated 12.09.2013
Not in force
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Sep 30