RD Levies Compounding Fee on Company and its Directors For Not Holding AGM Within Specified Time

RD Levies Compounding Fee on Company and its Directors For Not Holding AGM Within Specified Time

In a recent case, the Regional Director (Northern Region) levied a compound fee on a company for not scheduling the Annual General Meeting (AGM) on time.

The applicant company, Eighttool Indian Private Limited, did not hold the Annual General Meeting (AGM) within the stipulated time. The AGM was required to be scheduled on or before 30th September 2024 for the financial year 2023-24. However, the said AGM was held on 31st December 2024, with a delay of 92 days. This was a violation of Section 96 of the Companies Act, 2013. The company had filed an application under section 441 of the Companies Act, 2013, for compounding its default.

During the hearing, the company submitted that the non-compliance happened due to unavoidable circumstances and a lack of professional guidance.

It was observed that the company had filed a Suo Moto application disclosing this non-compliance. Additionally, the company had also rectified its default by holding the AGM and filing the MGT-7 with the Registrar of Companies (ROC).

The Regional Director has levied a compounding fee of Rs 1 lakh on the company and Rs 70,000 each on its two directors for committing a default under section 96 of the Companies Act. The payment is to be made within 15 days from the date of the order.