Pending AGMs under CCFSS – Can Companies Still Get Benefits?

Can Companies Hold Pending AGMs Now and Still Avail CCFSS Benefits? – A Practical Guide

Introduction

With the introduction of the Condonation of Delay Scheme (CCFSS) by the Ministry of Corporate Affairs (MCA), many companies—especially inactive or non-compliant entities—are exploring whether they can regularize past non-compliances.

One of the most common questions being asked is:

Can a company that failed to hold Annual General Meetings (AGMs) for previous years now conduct them and still benefit from the CCFSS Scheme?

The answer is Yes—but with an important caveat.

This article explains the legal position, practical approach, and compliance strategy in a clear and actionable manner.

Background of the Issue

The Finance Bill 2026 proposes a clarification on valuation of supply under Section 15 of CGST Act, especially concerning:

Not prepared financial statements for several years
Failed to hold AGMs within statutory timelines
Consequently, not filed mandatory forms like:
- AOC-4 (Financial Statements)
- MGT-7 / MGT-7A (Annual Returns)

With the CCFSS Scheme offering significant relief in additional filing fees, companies are now trying to clean up past defaults.

Legal Requirement: Holding AGM (Section 96)

Every company must hold an AGM:
- Within 6 months from the end of the financial year
- Gap between two AGMs must not exceed 15 months

If a company fails to comply, it is considered a statutory default.

Penalty for Non-Compliance (Section 99)

Fine up to ₹1,00,000, and
In case of continuing default:
- ₹5,000 per day

This liability applies to:

Does CCFSS Provide Immunity from AGM Default?

This is where many professionals get confused.

Therefore, even if filings are completed under the scheme,
the AGM default still exists legally.

Practical Scenario Explained

Let’s understand this with an example:

Prepares financial statements
Conducts delayed AGMs
Files AOC-4 and MGT-7 under CCFSS

✅ Benefit: Reduced additional filing fees

❌ Issue remains: Default of AGM under Section 96

Compounding of Offence – Mandatory Step

Since the default already occurred:

This is a separate compliance requirement and cannot be avoided through CCFSS.

Step-by-Step Compliance Strategy

To regularize past non-compliances, companies should follow this structured approach:

Step 1: Finalize Financial Statements

Prepare all pending financials for previous years.

Step 2: Conduct Board Meeting

Step 3: Hold AGM (Even if Delayed)

Conduct AGM for each pending year.

Step 4: File Pending Forms

Avail benefit of reduced additional fees under CCFSS

Step 5: Apply for Compounding

Key Takeaways

✔ Companies can conduct pending AGMs now
✔ They can avail CCFSS benefits for filings
❌ But they cannot escape AGM default penalties
✔ Compounding is mandatory to close the non-compliance

The CCFSS Scheme is a golden opportunity for companies to regularize long-pending filings at a significantly reduced cost. However, it is important to understand that:

Filing compliance and statutory compliance are two different aspects.

While delayed filings can be rectified under the scheme, failure to hold AGM within time remains a punishable offence.

While delayed filings can be rectified under the scheme, failure to hold AGM within time remains a punishable offence.

A well-planned compliance strategy—combining filing + compounding—is essential to achieve complete legal closure.

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Can Companies Hold Pending AGMs Now and Still Avail CCFSS Benefits