Can a company hold AGM outside India?

Font Size

Print

Feedback

Email

Discuss

: A private company registered in India, a wholly-owned subsidiary of a US company, wants to hold annual general meeting (AGM) of the Indian company in New York. Does the Indian corporate law permit this?

Section 166(1) of the Companies Act 1956 (CA) provides: Every company shall in each year hold in addition to any other meetings a general meeting as its annual general meeting. According to section 166(2) every AGM must be held either at the registered office of the company or within the city, town or village in which the registered office is situated. An AGM cannot be held elsewhere.

Then sub-section (2) has a two exceptions stated in its two provisos. According to clause (b) of the second, a private company, which is not a subsidiary of a public company (simplicitor private company) can fix the place for all its AGMs by its articles or by a resolution passed in an AGM or by a resolution agreed to by all the members of the company, ie by unanimous consent of all its members. This resolution need not be passed at a general meeting of the company, since it is required to be "agreed to" by all the members. Such a resolution can be passed by obtaining individual consent of each member without holding a meeting.

By any of these methods a simplicitor private company can decide to hold an AGM other than the place specified in sub-section (2), namely the registered office of the company or some other place within the city, town or village in which the registered office of the company is situated. Such place can be outside the city, town or village in which the registered office of the company is situated or even any other city, town or place within India, or outside India.

What reflects on this conclusion is the rule of interpretation that courts have evolved, and the specific rule that has a role to play here is the one concerning interpretation of a 'proviso'. The proviso is a clause or a paragraph in a statute that begins with the words "provided that" and creates an exception to the main clause to which it is appended.