Filing application in the High Court Division for permission to hold and conduct Annual General Meeting (AGM)
Section 81(2) and 85(3) of the Companies Act, 1994
Section 81(1) of the Companies Act, 1994 requires every company to hold an Annual General Meeting each year and not more than fifteen months shall elapse from the date of one AGM and that of the next. The said period can be extended up to 90 (ninety) days by the Registrar of Joint Stock Companies and Firms (RJSC). If any company defaults in conducting the AGM as aforesaid, the High Court Division has the jurisdiction to call or direct the calling of AGM and give ancillary or consequential direction as the Court thinks expedient in relation to the calling, holding and conducting of the meeting. Moreover, section 85(3) allows the High Court Division to pass an order prescribing the manner as to how the AGM shall be held and conducted.
There is a penalty for default in holding the AGM within time and the High Court Division may also exonerate the directors from paying such penalty.
Due to introduction of the Document Verification System by the Institute of Chartered Accountants of Bangladesh (ICAB), a 18-digit Document Verification Code is now printed on the signed audited financial statements. Many companies have failed to obtain its financial statements duly audited containing a DVC. The RJSC does not accept any returns filed without a Document Verification Code. This has resulted in complicacies for many private limited companies as the statutory period for conducting the AGM have also elapased. These companies are required to file an application before the Company Bench of the High Court Division under sections 81(2), 85 (3) read with sections 183(2) and 396 of the Companies Act, 1994 for condonation of delay in holding the AGM and seeking exoneration from the consequent fine. The Hon'ble Court would pass an order directing the concerned company to conduct AGM(s) within a stipulated time specifying the manner of how it is to be conducted.
Initially, the Court admits an application for condoning the delay in holding AGM and directs for publication of notice in two daily newspapers about filing of the application. The final order of the Hon'ble High Court Division is transmitted to the RJSC for necessary action.
Who can file an application before the High Court Division for calling, holding and conducting AGM?
If a company defaults in conducting AGM as required by the law, any member of the company may file an application in the High Court Division under section 81(2) of the Companies Act, 1994 for direction to hold AGM. The Court may also direct for appointment of auditor and appoint a person as the Chairman for conducting the AGM.