AGM Extension in GNL-1 filing Section 96(1) of the Companies Act, 2013

What is AGM Extension?

Under Section 96(1) of the Companies Act, 2013, every company, except for a One Person Company (OPC), must hold an Annual General Meeting (AGM) every year on or before 30 September i.e within 6 months from the closure of financial year and 1st AGM within 9 months from the date of closure of the Financial Year and the gap between two AGMs should not exceed 15 months. However, certain circumstances may arise where a company is unable to hold its AGM within the prescribed time. In such cases, the company can apply to the Registrar of Companies (RoC) for an extension of up to 3 months to hold the AGM by filing GNL-1, an application form for approval of ROC, application seeking approval from Registrar of Companies by filing application in eForm GNL-1 for different purposes under Companies Act, 2013.

We are all aware that, During the COVID-19 pandemic, many companies faced logistical issues due to lockdowns, travel restrictions, and health concerns. The Ministry of Corporate Affairs (MCA) automatically granted AGM extensions across various states through each respective RoC. Similar situations, whether due to pandemics, health crises, or other wide-scale disruptions, can lead to the need for an AGM extension. Even though virtual meetings have become more accessible by MCA notification to hold AGM through VC or OAVM, certain formalities still need physical presence, and delays may happen.

Therefore, without delay In 2024, if a company wishes to file for an AGM extension, the application must be submitted on or before September 30, 2024. After this date, no company will be able to apply for an extension.

Reasons or Grounds:  AGM Extension

• Change in Financial Year

• Natural Calamities (e.g., floods, earthquakes, COVID-19 etc)

• Mergers and Acquisitions

• Delay in Finalizing Financial Statements with valid reason

• Non-availability of Shareholders/Directors

• Non-availability of Auditors with valid proof and data 

Applicable Provisions

• Section 96, 173 of the Companies Act, 2013

• Secretarial Standard on Board Meetings (SS-1)

• Secretarial Standard on General Meetings (SS-2)

Mandatory Requirements for AGM Extension 

   1. Board Resolution, the company must pass a board resolution approving the extension request and delegating authority to file the application.

      2. ROC (Registrar) Approval required by  the company by filing GNL-1

      3. Application Deadline, must be filed before the original AGM due date.

In case of extension of annual general meeting, the detailed application in GNL-1 should contain the following details:  

     1. Reasons of extension  

     2.Period for which extension is required (Note: It should not exceed three months) 

Procedure for Filing AGM Extension in GNL-1 with ROC

Step-1: Convene a Board Meeting

In compliance with Section 173 and Secretarial Standard-1 (SS-1), the company must convene a board meeting to:

• Consider and approve the proposal for AGM extension by BOD 

• Delegate authority to a Company Secretary or a Director to sign and file the necessary form (GNL-1) with the RoC/MCA.

Step-2: Prepare and File Form GNL-1

The company needs to file an e-Form GNL-1 with the Registrar, outlining the reasons for seeking the extension, following documents must be attached:

• A copy of the Board Resolution passed to approve the AGM extension.

• Any Scheme of Arrangement or Amalgamation if applicable.

• A detailed application explaining the reasons for the delay.

• Any notices received from the RoC, if applicable.

• Period of Extension required (up to 3 months).

• Any other necessary or optional attachments.

Step-3: Approval and Certificate of Extension

If the Registrar of Companies is satisfied with the application, they will grant an extension by issuing a certificate of extension, which cannot exceed 3 months.

Timeline for Filing GNL-1

• Application Deadline for an extension must be submitted before September 30, 2024. After this date, no extension requests will be accepted by the RoC.

• Extension Period, maximum for which an extension can be granted is 3 months.

Fees for GNL-1 Filing

The fee structure for companies based on their nominal share capital when applying for the compounding of offenses, extending the period of annual accounts, or extending the period of the Annual General Meeting (AGM), fees are:

AGM Extension for Foreign Wholly Owned Subsidiaries and Subsidiary Companies in India

Under Section 96(1) of the Companies Act, 2013, all companies, including foreign wholly-owned subsidiaries (WOS) and Foreign subsidiary companies incorporated in India, must hold an Annual General Meeting (AGM) every year. For these companies, holding an AGM can be particularly challenging if their directors and shareholders are based outside India, often face logistical issues, such as visa delays or the need to be physically present in India for crucial tasks like finalizing the financials, audits, and adopting the annual report.

For foreign subsidiaries where all directors and shareholders reside outside India, they are often required to visit India to finalize the company’s books of accounts, get the financial statements audited, and hold the AGM. Due to visa issues or other international travel restrictions, the directors and shareholders may be unable to come to India in time for the AGM. Although the Companies Act allows AGMs to be held via video conferencing (VC) by MCA General Circular 14/2020 dated 08/04/2020 for certain matters, such as audits and physical document signings, still require the directors to be physically present. In such cases, companies often need more time and can apply for an extension. By following the mandatory filing of GNL-1 and providing the required documentation like Detailed Application, companies can avoid penalties and remain compliant with the Companies Act, 2013.

Therefore, In such cases, Foreign Subsidiary companies can apply to the Registrar of Companies (RoC) for an extension of up to 3 months for holding their AGM. In 2024, the application for AGM extension must be submitted before September 30, 2024, after which no applications will be accepted. Indeed Company Law Advisory is must before proceeding for filing GNL-1 (eForm GNL-1 is required to be filed pursuant to rule 12(2) of the Companies (Registration offices and Fees) Rules, 2014), so that it could not be rejected. 

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