PLACE OF HOLDING ANNUAL GENERAL MEETING

{COULD IT BE IN A PLACE OTHER THAN WHERE THE COMPANY’S REGISTERED OFFICE IS SITUATED?}

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Prof. R. Balakrishnan, CS

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1. Introduction

 

Pursuant to section 166 of the Companies Act, 1956, every company shall have to hold each year, a general meeting annually known as the annual general meeting of the company and such meetings cannot exceed a time gap of more than fifteen months between two general meetings. However, the first annual general meeting of the company could be held within eighteen months from the date of its incorporation. The Registrar of Companies has a power to grant for the extension of the annual general meeting by a period not exceeding three moths.

 

2. Place of holding annual general meeting

 

The question arises, what should be the place of the meeting - can it be a place other than its registered office, can it be a city other than the registered office of the company?

 

The section 166(2) answers this question.  As per the provisions of section 166(2) of the Companies Act, the annual general meeting shall have to be called during the business hours on a day which should not be a public holiday and it shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate.

 

2. The Provision of section 166(2) 

 

S. 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 held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate.

 

From the above, the following points emerge in respect of holding the annual general meeting:-

 

1.      No annual general meeting shall be held on a public holiday. (public holiday to be referred as defined in Section 2(38) according to which public holiday includes Sundays, New Year Day, Christmas Day; if either of such days falls on a Sunday, the next following Monday, Good Friday and any other day declared by the Central Government by notification in the official Gazette to be a public holiday.)

2.      Meeting shall have to at the business hours only.

 

3.      The meeting can be held only in the city, town or village where the registered officer of the company is situate and not elsewhere.

 

2.1 Can the annual general meeting be held in any other place?

 

With the above provisions in place as per Companies Act, 1956, whether the annual general meeting can be held elsewhere than the place in which the registered office of the company is situated?

 

3. Meeting can be held within the postal limits

 

The answer to this question could probably be found with a help of the clarification issued by the department of company affairs as back as 1981. As per the clarification, a company can hold its annual general meeting within the postal limit though the postal limits would be wider than the municipal limits of the place in which the company’s registered office is situated, if it is more convenient to the shareholders of the company. The “postal limit” may have to be construed to mean the city postal delivery area officially accepted by the postal authorities as per the letter no. 2/M-1594/74 dated 29th April 1988.  

 

4. Department’s clarification

 

The Department of Company Affairs issued clarification on this matter which is given below for the benefit of the readers.

 

Clarification on section 166(2) of the Companies Act, 1956

place of holding annual general meeting.

 

A question has been raised whether the annual general meeting of a company can be held at a place within the postal limits of the city in which the registered office of the company is situated though the postal limits are wider than the municipal limits of the city. The matter has been carefully examined by the Department. It has been observed that as a result of rapid urbanization cities frequently tend to expand beyond municipal limits and in view of this, the expression “ every annual general meeting shall be held either at the registered office of the company is situated”, used in section 166(2) of the Companies Act, 1956, may be taken to mean both the postal limits and local body limits of the city in which the registered office of the company is situated and where the two do not coincide, the wider of the two.  A company can, therefore, hold is annual general meeting at any place within the postal limits of the city in which its registered office is situated, it if is more convenient to its shareholders.

 

                                     (Letter Number 1/1/83-CL - V & No. 6/159/PT/64 dated 16th                           Feb.  1981 Issued by the Department of Company Affairs)

5. Place for holding adjourned annual general meeting

 

For want of quorum, if the annual general meeting stands adjourned, then the meeting would be required to be held the same day in the next week at the same time and place or such other day and at such other time and place as the board of directors may determine. This is pursuant to the provision of section 174(4) of the Companies Act, 1956. In view of the above provisions, again the question arises whether it is possible for the company to call the adjourned annual general meeting of the company at a place outside the place where the registered office of the company is situated.

 

One more question on the same subject could be whether the provisions of section 166(2) discussed above would apply even for the adjourned annual general meeting?

 

The answer to this question is also as that of the one discussed in the earlier paragraph. An adjourned annual general meeting cannot be held at a place other than a place where the original meeting was scheduled to be held. The provisions of Section 174(4) and Section 166(2) should be complied with while holding the adjourned annual general meeting also.

 

6. Adjourned meeting can it be held in any other place than the place of original

    meeting scheduled 

 

Although subsection 4) of Section 174 says “ to such other day and such other time and place as the directors may determine” - this does not give any discretion to the directors to fix time and place so far as the adjourned annual general meeting is concerned in any manner contrary to the provisions of subsection (2) of Section 166.

 

7. Conclusion

 

a.       A company can hold its annual general meeting within the postal limit though the postal limits would be wider than the municipal limits of the place in which the company’s registered office is situated, if it is more convenient to the shareholders of the company.

b.      The adjourned meeting also cannot be held at a place other than a place where the original meeting was scheduled to be held.

c.       Compliance relating to section 166(2) and Section 174(4) needs to be complied with while holding the annual general meeting and adjourned annual general meeting.