Vide letter No. 8/5(1669/65-PR dated 21-1-1963, AGM can be held on Sunday in certain cases: CA Nitesh More

CASE 3: WHEN DATE OF AGM OF 2012 HAS BEEN FIXED IN AGM OF 2011

PREPARED BY CA NITESH MORE

9883157484

 Private ltd company as well as public ltd company may also by a resolution passed in one annual general meeting fix the time for its subsequent annual general meetings (Proviso 2 to sec 166(2)) :

EXAMPLE: ABC  LTD  by a resolution passed in  its AGM on 30^th September, 2011 , fixed the time for its next AGM on 30^th September , 2012 on 11a.m. Now 30^th September, happens to be Sunday. AGM held on 30^th September, 2012.

DRAFT REPLY TO ROC

To                                                                                                                Date: 03/04/2013

The Registrar of Companies, West Bengal

Nizam Palace
Kolkata - 700020

Sir,

Re: In the matter of the Companies Act, 1956.

and in the matter of M/s. __________ Private Limited/ Limited

(CIN: )

Sub: Default Notice on the ground of non-compliance of section 166 of the Companies Act, 1956

Reference:  Your dated         letter no.

The Company, as well as its directors are in receipt of the above mentioned letter to Show Cause as to why action should not be taken for prosecution under section 168 for holding Annual General Meeting on 30/09/2012 (Public Holiday).

We would like to submit as under:

·         You attention is invited to letter No. 8/5(1669/65-PR dated 21-1-1963,which states that  sec 166(2) does not make it absolute mandatory to hold AGM only on a day which is public holiday. Attention is also invited to 2^nd proviso to sec. 166(2).

·         The shareholders in AGM of 2012 by passing a resolution under proviso 2 to sec. 166 had fixed 30^th September as date of AGM of 2013.

·         The Company and its officers were under compulsion to hold AGM on Sunday being 30th September which is the date fixed as date of AGM by shareholders in AGM of 2012 as date of AGM of 2013.

·         The Company and its officers inadvertently/accidently hold AGM on Sunday being 30^th September.

·         Under Proviso 2 to sec 166(2), private ltd company as well as public ltd company may by a resolution passed in one annual general meeting fix the time for its subsequent annual general meetings.

·         Certified Copy of Resolution passed in 2012 has been attached for your reference.

In light of the above, the Company and its directors requests to forgo launching of prosecution as well as any penalty proceeding against the Company and its Directors.

Thanking you

For ____________Private Limited/ Limited

Director

RELEVANT SECTION  HAS BEEN REPRODUCED BELOW FOR YOUR READY REFERENCE:

SEC 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 situates:

Provided that the Central Government may exempt any class of companies from the provisions of this sub-section subject to such conditions as it may impose:

Provided further that -

(a) a public company or a private company which is a subsidiary of a public company, may by its articles fix the time for its annual general meetings and may also by a resolution passed in one annual general meeting fix the time for its subsequent annual general meetings ; and

(b) a private company which is not a subsidiary of a public company, may in like manner and also by a resolution  agreed to by all the members thereof, fix the times as well as the place for its annual general meeting.

CAN AGM HELD ON SUNDAY?

PREPARED BY CA NITESH MORE

CASE 1: YES, ADJOURNED AGM CAN BE HELD ON SUNDAY.

CASE 2: YES,  AGM CAN BE HELD ON SUNDAY IF PROCEDURE TO SEC. 166(2) HAS BEEN FOLLOWED.

CASE 1: YES, ADJOURNED AGMCAN BE HELD ON SUNDAY.

AS PER CIRCULAR NO 8/16(1)/61-PR, THERE IS NO CONTRAVENTION OF SEC. 166(2) IF THE ADJOURNED AGMCOMES TO BE ACCIDENTALLY HELD ON A PUBLIC HOLIDAY.

EXAMPLE:  AGM CALLED ON 29^TH SEP, 2012, ADJOURNED TO 30^TH SEP., 2012 WHICH HAPPENED TO BE PUBLIC HOLIDAY.

COMMENT: PROVISION OF SEC 174 MUST BE COMPLIED WITH I.E. BOARD MEETING MUST BE CALLED TO FIX DATE AND TIME OF ADJOURNED AGMTO 30^TH SEPTEMBER.

SEC 174: QUORUM FOR MEETING HAS BEEN REPRODUCED BELOW:

(1) Unless the articles of the company provide for a larger number, five members personally present in the case of public company (other than a public company which has become such by virtue of section 43A), and two members personally present in the case of any other company, shall be the quorum for a meeting of the company.

(2) Unless the articles of the company otherwise provide, the provisions of sub-sections (3), (4) and (5) shall apply with respect to the meetings of a public or private company.

(3) If within half an hour from the time appointed for holding a meeting of the company, a quorum is not present, the meeting, if called upon the requisition of members, shall stand dissolved.

(4) In any other case, the meeting shall stand adjourned to the same day in the next week, at the same time and place, or to such other day and at such other time and place as the Board may determine.

(5) If at the adjourned meeting also, a quorum is not present within half an hour from the time appointed for holding the meeting, the members present shall be a quorum.

CASE 2: YES, AGM CAN BE HELD ON SUNDAY IF PROCEDURE TO SEC. 166(2) HAS BEEN FOLLOWED.

 Kindly note that Proviso 2   to sec 166(2) allows private and public ltd co to fix date, time and place of AGM as discussed below:

a)     In case of a private company which is not a subsidiary of a public company: Three options has been provided to fix date, time and place of AGM:

·          Option 1:  by its articles fix the time(date)  for its annual general meetings

·          Option 2:  by a resolution passed in one annual general meeting fix the time for its subsequent annual general meetings

·         Option 3:  by a resolution   agreed to by all the members thereof, fix the times (date) for its annual general meeting.

b)     In case of a public company or a private company which is a subsidiary of a public company: Two options has been provided to fix date , time and place of AGM:

·         Option 1: may by its articles fix the time(date)  for its annual general meetings

·          Option 2: may also by a resolution passed in one annual general meeting fix the time for its subsequent annual general meetings

EXAMPLE: ABC  PVT LTD , on 31^st july,2012 ,  a resolution agreed by all members to fix date of all AGM to 30^th sep . every year. Now 30^th September, happens to be Sunday. AGM held on 30^th September, 2012.

Answer: AGM is valid on the following two grounds:

Ground 1: AGM inadvertently held on Sunday as a resolution agreed by all members was passed. As per circular no 8/16(1)/61-pr, there is no contravention of sec. 166(2) if the adjourned AGM comes to be accidentally held on a public holiday. If the adjourned AGM can be valid than  AGM agreed by all members on 30^th September every year can also be valid, even if it eventually comes to Sunday.

Ground 2:  Proviso 2 to sec 166(2) allow private ltd company and public ltd company to hold AGM on a day and place agreed upon by its members. When the proviso allows these companies to fix date and place of AGM by following certain procedure, what is stated in sec 166(2) itself cannot be made applicable to these companies.

RELEVANT SECTION  HAS BEEN REPRODUCED BELOW FOR YOUR READY REFERENCE:

SEC 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 situates:

Provided that the Central Government may exempt any class of companies from the provisions of this sub-section subject to such conditions as it may impose:

Provided further that -

(a) a public company or a private company which is a subsidiary of a public company, may by its articles fix the time for its annual general meetings and may also by a resolution passed in one annual general meeting fix the time for its subsequent annual general meetings ; and

(b) a private company which is not a subsidiary of a public company, may in like manner and also by a resolution  agreed to by all the members thereof, fix the times as well as the place for its annual general meeting.

CA NITESH MORE

9883157484

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thanks sir for accepting my request for posting this on casansaar...
very useful information......