Annual General Meetings Must Be Completed Within Poush, Director and CEO To Be Held Liable for Delays

Wed, Jul 26, 2023 12:28 PM on Latest, Stock Market,

All companies, including banks, financial institutions, and insurance companies, are now required to hold their Annual General Meetings (AGMs) by the end of Poush as per a directive from the Office of the Company Registrar. Failure to comply within the stipulated period will result in penalties. While a general meeting can still be held after Poush, any fines and fees incurred will have to be paid by the company's directors and managers personally.

Previously, organizations could hold general meetings after paying fines using the company's funds, but the new regulation disallows this practice. Instead, the responsibility for such penalties now falls solely on the directors and officers of the respective companies. The directive emphasizes that the liability for company activities aimed at achieving the organization's objectives remains with the company itself, while the directors and officers are held accountable for the company's operation and management.

If a company fails to provide required details, information, or responses within the designated timeframe, penalties will be imposed, and the onus of payment rests with the company's directors or officers. Auditors are urged to address such fines appropriately during the audit process in line with prevailing laws and Nepal Standards on Auditing.

Notably, this new regulation will benefit shareholders of listed companies as they will no longer have to wait for extended periods to receive dividends. In the past, banks and financial institutions often held their general meetings throughout Poush, but insurance companies traditionally avoided holding general meetings within Poush. Now, all companies must conduct their AGMs within Poush to comply with the directive and avoid penalties.