ANNUAL GENERAL MEETINGS
1. Annual General Meetings
Pursuant to the provisions of the Companies Act, 2013 every company other than One person company, whether public or private, incorporated under the provisions of the Companies Act shall hold a general meeting of members every year, called ‘the Annual General Meeting’. Annual General Meeting shall be held at the registered office of the Company or such other place within the city where the registered office is situated and during business hours i.e.; 9 a.m. to 6 p.m. and not on a national holiday.
2. Time-limit for holding the first annual general meeting
A company which is registered under the Act, shall hold its first Annual General Meeting within a period of nine months from the closure of its books of Accounts for the first financial year. It may also be noted in this connection that the accounts placed before the first annual general meeting shall be for the period beginning from the date of incorporation and ending on a day of financial year.
3. Time-limit for holding subsequent annual general meetings
In terms of the provisions of section 96 every company shall hold an Annual General Meeting every year i.e; calendar year i.e; latest by 31st December each year . Normally, there shall not be a gap of more than fifteen months between two such meetings. In terms of the provisions of section 96 every subsequent Annual General Meeting shall be held within a period of six months from the end of the financial year whose accounts are proposed to be considered at the said annual general meeting.
4. Filing of Annual Return
Every company (whether Public Limited Company or Private Limited Company ) having share capital, and every company not having share capital, is required to file annual return with the Registrar within sixty days from the date of the Annual General Meeting. Consequences of not filing the Annual Return are very serious.
5. Financial Year
A financial year is a period of twelve months ending on 31st March every year and where the company has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year. But in certain circumstances a financial year may be for less than a year or it may be for more than a year. The Registrar has the power to extend a financial year in certain cases.
6. Uniform accounting year under Income-tax Act, 1961 & Companies Act 2013
For the purpose of the Income-tax Act, 1961, the previous year means the financial year immediately preceding the assessment year. Accordingly, for the purpose of the said Act, from the assessment year 1989-90, the assesses including companies were required to declare their income every year as on 31st March. All that is necessary from the said assessment year is to make up the account as on 31st March, for the purpose of submitting the Income-Tax return.
As per companies Act 2013, Financial year means the period ending on the 31st day of March every year.
FILING OF FINANCIAL STATEMENT
The Companies Act, 2013 specifies that at every Annual General Meeting the Board of Directors of the company shall lay before the shareholders financial statement for the financial year. Where a company has one or more subsidiaries, it shall prepare a consolidated financial statement of the company and of all the subsidiaries and be laid before the Annual General Meeting of the Company.
The Companies Act, 2013 specifies that the financial statement including consolidated financial statement, if any, shall be approved and signed by the Board of Directors before they are signed on behalf of the Board. Act also states that Auditors report shall be a part of financial statement and a report by its board of directors which shall include all clauses mentioned in the act.
As per the Companies Act, 2013 a copy of these financial statement duly adopted at the Annual General Meeting has to be filed with the Registrar of Companies within thirty days of the date of AGM with applicable fees.
Filing of Annual Return:
The Companies Act, 2013 specifies that every company shall prepare an Annual Return in the prescribed form on the close of financial year. The Annual return has to be signed by a director and the Company secretary, or where there is no company secretary, certified by a practicing Company secretary. This Annual return shall be filed with the Registrar of Companies within sixty days from the date of Annual General Meeting with such fees as may be applicable.
Extract of the annual return becomes a part of the Board's Report as per the Companies Act 2013.
We provide annual filing services. Please contact us, if you need any other assistance/details.
BOARD MEETINGS PROCEDURES
1. Overview
A collective body of Directors of the company is responsible to the shareholders for the smooth functioning and day to day management of the affairs of the company. Any decision whether it be major or not ,shall be decided by more than one director and it should be approved at the meeting of the Board of Directors. Some decisions need the unanimous approval of all Directors. A meeting of the Board of Directors therefore forms an important forum in the working of companies. Several statutory prescriptions are incorporated in the Companies Act, to ensure that the actions approved by the Board are in the interest of the company and reflect the fiduciary nature of the duties of directors. The company shall be required to comply with the secretarial standard issued by the Institute of Company Secretaries of India with respect to Board Meeting.
2. Periodicity of the Board Meetings
The Companies Act, 2013 provides that every company, private or public, shall hold its first meeting of the Board of Directors within thirty days of incorporation and should hold at least four meeting in a year, the gap between two Board Meetings shall however not exceed one hundred and twenty days, except of OPC and Small Companies. The Directors can participate either in person or through video conferencing or other audio visual means. The meeting held through audio visual means should be recorded and proceeding of the meeting should be stored along with the date and time.
3. Notice of Board Meeting
The Companies Act, 2013 stipulates that a meeting of the Board of Directors shall be held after giving at least seven days’ notice. The notice shall be given in writing and should be sent to his address registered with the company. Notice shall be sent by hand delivery, by post or by electronic media.
4. Day, Date, Time and Place for Holding Board Meetings
a. Day of holding meetings.
Board meetings are normally held during business hours and on a day, which is not a public holiday. However, a Board meeting may validly be held on a public holiday. Department would not raise any objection if an original Board meeting is held on a public holiday for the convenience of the directors although it considers that an original Board meeting should normally be held only on a working day.
b. Time of holding Board meetings
Board meetings can be held during business hours or outside business hours. There is no restriction on that matter under the Act.
c. Place for holding Board Meeting
Board meetings can be held at any place whether it be a company’s registered office or head office or any other premises and whether or not it is within the same city, town, village or state in which the registered office of the company is situated. Board meeting can also be held at places other than these places including abroad.
5. Quorum of the Board Meeting
In terms of the provisions of the Companies Act, 2013, the quorum for a Board meeting shall be one-third of its total strength of directors who are in office or two directors, whichever is higher. Members participating by video conferencing or by other audio visual media shall be counted for the purpose of quorum. Any fraction arising in counting of one-third will be rounded off as one. For example, in a Board having seven directors, the quorum shall be three directors. It is also provided that where the interested directors exceed or equal two-thirds of the total strength, the number of remaining disinterested directors present at the meeting being not less than two shall be the quorum of that business of the meeting. The company by its articles can provide for a higher number as quorum.
6. Time, day and place for holding adjourned Board Meetings
Where Board meeting is adjourned for want of quorum then the adjourned meeting shall be held at the same day in the next week at the same time and place or if the day is a national holiday till the next succeeding day which is not a national holiday at the same time and place. Therefore, an adjourned meeting should be held only on a working day.
7. Directors cannot appoint a Proxy for Board Meetings
The Companies Act provide that it is necessary for the directors to attend the Board meetings personally. Proxies are not allowed at Board meetings and directors are not allowed to appoint their representatives to attend the Board meetings and cast vote on their behalf.
8. Payment of observer for the Board Meetings
The directors are allowed to receive sitting fees for each meeting of the Board or a committee thereof attended by them.
9. Minutes of the board meeting:
The Companies Act, 2013 provides that every company shall cause minutes of all proceedings of every meeting of its Board of directors, to be kept by making within thirty days of the conclusion of every such meeting concerned, entries thereof in the books kept for that purpose with their pages consecutively numbered. It is the general practice to draft the Board meetings minutes and get it approved by the chairman and thereafter it is recorded in the minutes book. Simultaneously, copy of the draft minutes is circulated to all the directors either before or at the time of circulation of the agenda for the next meeting. At the next meeting, the minutes of the earlier meeting recorded in the book, are adopted by the Board and in token thereof, the chairman signs the minutes with the date.
MAINTENANCE OF STATUTORY REGISTERS
Every company is required to maintain certain statutory registers and these must be kept at the registered office of the company.
Various types of registers that are required to be maintained by the company include the following:
1 Register of Members
2 Register of Directors & Key managerial personnel
3 Register of companies and firms in which the directors of the company are interested
4 Register of Directors Shareholding
5 Register of particulars of contracts in which directors are interested
6 Register of Loans or Investments made, Guarantee given or Security provided
7 Register of Renewed and Duplicate Share Certificates
8 Register of Sweat equity shares
9 Register of Transfers
10 Register of Fixed Assets
11 Register of Charges
12 Minutes Books
13 Books of accounts etc
SMALL COMPANY
As per companies Act 2013, Small company means:
A Private company, not being, a holding company or a subsidiary company or a company registered for charitable objects / Sec 8 company or Company governed by any special Act and with a paid up capital of less than Rs. 50 Lakhs OR a turnover of less than Rs. 2 Crores.
Small Companies are subjected to less stringent provisions as compared to other Private Limited Companies and public limited companies. Advantages:
1 The financial statement with respect to a small company may not include the cash flow Statement / Cash flow statement is not mandatory.
2 Annual return can be signed by a Director. Small companies need not appoint Company Secretaries as key managerial persons.
3 Only 2 Board meetings in a year are mandatory, one Board meeting to be held in each half of the calendar year and gap between 2 meetings must not be less than 90 days.
4 Auditors need not be mandatorily to be rotated and maximum term is also not applicable.
WHAT IS XBRL?
XBRL stands for eXtensible Business Reporting Language (XBRL) that will be widely used to enable the financial reporting process for both preparers and consumers. In simpler words, it is a revolutionary format for business (financial) reporting. A more advanced form of XML. (XML reporting is already being used by the Income-tax Department in India.)
What is the MCA mandate?
The companies,whose Balance Sheet date is 31.03.2011 or onwards, need to file their financial statements in XBRL provided they qualify the criteria laid as per Ministry's general Circular 37/2011 dated 07.06.2011.The following class of companies have to file the Financial Statements in XBRL Form from the year 2010-2011:-
1 All companies listed in India and their subsidiaries (Subsidiary of listed company are required to file in XBRL format, irrespective of its paid up capital.
2 All companies having a paid up capital of Rs. 5 Crore and above or a Turnover of Rs 100 Crore or above.
3 separate set of Form 23AC and Form 23ACA available on the MCA portal for filing in XBRL form.