Annual General Meeting is a mandatory yearly meeting of the shareholders of a company at which the company's financial performance is reviewed, auditors are appointed, and key governance decisions are taken. Under Indian law, it is governed by Section 96 of the Companies Act, 2013, which requires every company other than a One Person Company to hold an AGM each year.
Legal definition
Section 96 of the Companies Act, 2013 prescribes the requirements for an AGM:
(1) Every company other than a One Person Company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it, and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next.
(2) Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National 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 situate.
Key timeline requirements:
- The first AGM must be held within nine months from the date of closing of the first financial year (Section 96(1), proviso).
- Subsequent AGMs must be held within six months from the date of closing of the financial year.
- The gap between two consecutive AGMs must not exceed fifteen months.
- The Registrar may, for special reasons, grant an extension of time for holding an AGM by a period not exceeding three months.
Mandatory business at the AGM (termed "ordinary business" under Section 102):
- Consideration and adoption of the financial statements (including audited balance sheet, profit and loss account, and the reports of the board and the auditors).
- Declaration of dividend.
- Appointment of directors in place of those retiring.
- Appointment of auditors and fixing their remuneration.
All other business transacted at the AGM is "special business" and requires an explanatory statement under Section 102.
How courts have interpreted this term
Barium Chemicals Ltd. v. Company Law Board (1967) 2 SCR 311
The Supreme Court considered the significance of general meetings in the context of shareholders' rights and company governance. The Court held that the general meeting is the forum where shareholders exercise their ultimate control over the company. The right of shareholders to receive notices, attend meetings, and vote on resolutions is a fundamental right of membership that cannot be abrogated by the board.
Shanti Prasad Jain v. Kalinga Tubes Ltd. (1965) 2 SCR 720
The Supreme Court held that decisions taken at a duly convened general meeting bind all members, including those who voted against the resolution, provided the meeting was held in compliance with the Act and the articles. The Court emphasised that the procedural requirements for calling and conducting general meetings are mandatory and not merely directory.
Why this matters
The annual general meeting is the primary mechanism through which shareholders exercise oversight over the board of directors and the company's management. It is the forum where the company's financial health is scrutinised, where directors are held accountable, and where shareholders cast their votes on matters that affect their investment. For minority shareholders in particular, the AGM provides a legally protected opportunity to raise questions, propose resolutions, and challenge management decisions.
For companies and their secretarial teams, compliance with AGM requirements is non-negotiable. Failure to hold an AGM within the prescribed timeline attracts penalties under Section 99 — a fine of up to one lakh rupees on the company and up to five thousand rupees per day of default on every officer in default. The Registrar of Companies or any member can also apply to the NCLT under Section 97 to call or direct the calling of an AGM if the company fails to convene one.
Practitioners should note that the Companies (Amendment) Act, 2020 and subsequent MCA circulars have permitted companies to hold AGMs through video conferencing and other audio-visual means, subject to prescribed conditions. Listed companies must also comply with SEBI's requirements for e-voting and providing remote voting facilities to all shareholders, ensuring that physical distance does not impede shareholder participation.
Related terms
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Frequently asked questions
What happens if a company fails to hold its AGM?
If a company fails to hold its AGM within the prescribed time, the company and every officer in default are liable to a penalty under Section 99 of the Companies Act, 2013. Additionally, any member of the company can apply to the NCLT under Section 97, which may direct the calling of the AGM and give ancillary directions regarding the conduct of the meeting.
Can an AGM be held through video conferencing?
Yes. Following MCA circulars and the Companies (Management and Administration) Rules, 2014, companies may hold AGMs through video conferencing or other audio-visual means, subject to prescribed conditions. However, certain business items — including the approval of financial statements, declaration of dividends, and appointment of auditors — may require compliance with additional e-voting requirements under Section 108.
What is the quorum for an AGM?
Under Section 103, the quorum for an AGM depends on the number of members: five members personally present if the company has up to one thousand members; fifteen members if between one thousand and five thousand; and thirty members if more than five thousand. For a private company, two members personally present constitute the quorum.
What is the difference between an AGM and an EGM?
An AGM is a mandatory annual meeting held to transact ordinary business (financial statements, dividends, director appointments, auditor appointments). An Extraordinary General Meeting (EGM) can be called at any time under Section 100 to transact urgent or special business that cannot wait until the next AGM. The board, or members holding at least one-tenth of paid-up voting share capital, can requisition an EGM.
This entry is part of the Veritect Indian Legal Glossary, a comprehensive reference of Indian legal terminology grounded in statutory text and judicial interpretation.
Last updated: 2026-03-27. Veritect provides this content for informational purposes and does not constitute legal advice.