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National Holiday under Companies Act 2013: Holding AGM EGM

Annual General Meeting (AGM)

As per sub-section (2) of section 96 of the Companies Act, 2013, an annual general meeting of companies shall not be held on a National Holiday.

And, as per the Explanation given under the said sub-section (2), "National Holiday" means and includes a day declared as a National Holiday by the Central Government.

Secretarial Standards

Definition of “National Holiday” as given in Secretarial Standard on Meetings of Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2).

National Holiday means Republic Day i.e. 26th January, Independence Day i.e. 15th August, Gandhi Jayanti i.e. 2nd October and such other day as may be declared as a National Holiday by the Central Government.





Extraordinary General Meeting (EGM)

EGM called by the Board

As per sub-section (1) of section 100 of the Companies Act, 2013, the Board of Directors may, whenever it deems fit, call an extraordinary general meeting of the company.

As there is no clear restriction given about the 'day' of the meeting in such cases, it can be interpreted that such an EGM as called by the Board can be held on a National Holiday.

EGM called at the requisition made by some members

In case, an EGM is being called by the Board at the requisition of certain members (refer sub-section (2) of section 100), then in accordance with Rule 17(2) of the Companies (Management and Administration) Rules, 2014, the EGM should be convened on any day except national holiday.

Adjourned General Meeting

In the Companies Act, there is no specific provision regarding restriction on an adjourned general meeting being held on a national holiday.

Hence, it can be interpreted that there would be no contravention if an adjourned general meeting that is to be held falls on a date which is a national holiday.

This is because of the reason that the original scheduled date of meeting was not on a national holiday.



Notice issued - Central Govt declares Holiday

There is also an ambiguity on the applicability of the restriction in case the notice of the meeting is already issued to the members and after that the Central Government has declared the same date as a national holiday.

It is a general practice that in such cases it would not be considered as contravention of the law if the said meeting is held on the scheduled date.


Board Meeting

As per sub-section (4) of Section 174, holding of adjourned board meetings (adjourned for want of quorum) on national holidays is prohibited.

However, there is no specific prohibition on holding of the originally scheduled board meetings on national holidays.

Many companies, as a matter of good governance practice, avoid holding board meetings on national holidays as the presence of few employees of the company is necessary for smooth conduct of the meetings.



Comments

  1. National Holidays mean holidays celebrated by all caste, creed and region that is independence day,republic day and father of the nation b'day
    any day which is celebrated by a particular group of people or in particular region that is public holidays.

    ReplyDelete

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