What comes as a respite for the businesses both small and large is a decision by the government. It extends the time limit for the conduction of the Annual General Meeting for the financial year 2020-21. The meeting which should have happened by march has now been extended for the second time to be done by November 2021. It is a necessary requirement for company registration in India under the law. This is so that the companies can comply with the rules and regulations of the Companies Act and continue their business normally.

What is AGM?

Annual General Meeting is a yearly meeting of the board of directors and shareholders where discussions on the dome are done. A report is presented by the board of directors on the performance and strategy of the company and the election of new members to the board. It is mandatory for all companies to have an AGM every year except for One Person companies. It should be conducted within 6 months of ending the financial year. There should not be more than a fifteen-month gap between two AGMs. 

Why has the government extended the AGM?

The Covid-19 Pandemic has disrupted the flow of life in society. This has also led to disruption in the business proceedings. With most companies shut it has been difficult to conduct the AGM for most companies. This has led to the government providing provisions for conducting the AGM with a certain extended time limit. The Government extended the time frame and added two more months for conducting the AGM. The last date for the AGM for the financial year is extended till November 2021 from the previous extended date of september. 

How does extension in AGM help businesses?

The extension in the date for conducting the Annual General Meeting for businesses has been a huge relief. It allows the companies to conduct their AGM that could not be conducted due to the Covid-19 Pandemic. The disruption caused due to the pandemic has impacted everyone. 

It was difficult for businesses to run and as a result, it led to the government extending the dates for conducting the AGM to November 2021. This will provide enough time for the companies to sort things out and get together the board of directors for conducting the Annual General Meeting for the financial year.

This is a relaxation that is provided by the government to comply with the policies of the Companies Act and to not break the rules of functioning. 

Conclusion

The impact of the pandemic on the functioning of companies has been devastating. It was necessary for the government to provide a bit of relaxation in complying with the rules. It was not easy to stick to all compliant laws under the pandemic.

Thus the extension in the last date for the AGM has helped companies get structured. This is a measure to help overcome the problems caused due to the Pandemic. It aims to overcome the slump caused and bring back businesses to their full functioning.