Question

Justify the following statement.

As per the Companies Act every company has to hold the Annual General Meeting.

Answer 1

Annual General Meeting is a meeting of all the members of the company which is held once a year after the closing of the financial year in accordance with the provisions of Section 96 of the Companies Act, 2013.
The main objects of holding the Annual General Meeting are to inform the members of the company about the performance of the company during the financial year completed and to present the duly audited Profit & Loss Account and Balance Sheet of the company for their consideration and approval.

Besides, the meeting transacts other items of ordinary business such as appointment of Directors, auditors, solicitors, etc. and declaration of dividend. It also transacts special business such as increase in nominal capital, alteration in the Memorandum and Articles of Association, etc. All these items of business have to be considered and decided by the members only. Therefore the Companies Act has made it compulsory for every Company (including a private company) to hold the Annual General Meeting 6 months after the completion of its financial year. The time interval between two Annual General Meetings should not be more than 15 months.