MCA provides clarification on holding of AGM and EGM through VC or OAVM and passing of Ordinary or Special Resolution: General Circular 09/2024
Summary: The Ministry of Corporate Affairs (MCA) has released General Circular 09/2024 on September 19, 2024, clarifying the procedures for conducting Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs) via Video Conferencing (VC) or Other Audio Visual Means (OAVM). This guidance extends the option for companies due to hold their AGMs in 2024 and 2025 to utilize VC or OAVM until September 30, 2025. However, it does not extend the statutory deadlines for holding AGMs; companies that miss these deadlines may face legal consequences under the Companies Act, 2013. The circular builds on previous communications from the MCA, including General Circulars 20/2020, 02/2022, and 09/2023, emphasizing compliance with the relevant provisions of the Act, particularly Sections 96 and 100, which govern the timing and calling of meetings.
MCA has issued General Circular 09/2024 on 19th September 2024 to provide clarification on holding of Annual General Meeting (AGM ) and EGM ( Extraordinary General Meeting) through VC ( Video Conferencing) or OAVM (Other Audio Visual Means) and passing of ordinary or Special Resolution by the companies under Companies Act, 2013 read with Rules made thereunder – Extension of timeline-reg 0n 19th September 2024.
Key points of the Circular are:
- This circular is in the continuation of
- Minister’s General Circular No 20/2020 dt 5th May 2020.
- General Circular No 02/2022 dt 5th May 2022
- General Circular No 09/2023 dt 25th September 2023
It has been decided that to allow companies whose AGMs are due in the year 2024 and 2025 to conduct their AGM through VC or OAVM on or before 30th September 2025
General Circular shall not be constructed as conferring any extension of statutory time for holding AGM by the companies under Companies act 2013
Companies which have not adhered to the relevant statutory timeline shall be liable to legal action under the appropriate provision of the act
Section 96: Annual general meeting
(1) Every company other than a One Person Company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it, and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next:
Provided that in case of the first annual general meeting, it shall be held within a period of nine months from the date of closing of the first financial year of the company and in any other case, within a period of six months, from the date of closing of the financial year :
Provided further that if a company holds its first annual general meeting as aforesaid, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation:
Provided also that the Registrar may, for any special reason, extend the time within which any annual general meeting, other than the first annual general meeting, shall be held, by a period not exceeding three months.
(2) Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate:
Provided that annual general meeting of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance:
Provided further that the Central Government may exempt any company from the provisions of this sub-section subject to such conditions as it may impose.
Provided further that the time, date and place of each annual general meeting are decided upon before-hand by the Board of Directors having regard to the directions, if any, given in this regard by the company in its general meeting.
Explanation.—For the purposes of this sub-section, “National Holiday” means and includes a day declared as National Holiday by the Central Government.
Section 100.Calling of extraordinary general meeting
(1) The Board may, whenever it deems fit, call an extraordinary general meeting of the company .
Provided that in case of a Specified IFSC public company, the Board may subject to the consent of all the shareholders, convene its extraordinary general meeting at any place within or outside India.
Provided that in case of a Specified IFSC private company, the Board may subject to the consent of all the shareholders, convene its extra ordinary general meeting at any place within or outside India.
Provided that an extraordinary general meeting of the company, other than of the wholly owned subsidiary of a company incorporated outside India, shall be held at a place within India.
(2) The Board shall, at the requisition made by,—
(a) in the case of a company having a share capital, such number of members who hold, on the date of the receipt of the requisition, not less than one-tenth of such of the paid-up share capital of the company as on that date carries the right of voting;
(b) in the case of a company not having a share capital, such number of members who have, on the date of receipt of the requisition, not less than one-tenth of the total voting power of all the members having on the said date a right to vote, call an extraordinary general meeting of the company within the period specified in sub-section (4).
(3) The requisition made under sub-section (2) shall set out the matters for the consideration of which the meeting is to be called and shall be signed by the requisitionists and sent to the registered office of the company.
(4) If the Board does not, within twenty-one days from the date of receipt of a valid requisition in regard to any matter, proceed to call a meeting for the consideration of that matter on a day not later than forty-five days from the date of receipt of such requisition, the meeting may be called and held by the requisitonists themselves within a period of three months from the date of the requisition.
(5) A meeting under sub-section (4) by the requisitionists shall be called and held in the same manner in which the meeting is called and held by the Board.
(6) Any reasonable expenses incurred by the requisitionists in calling a meeting under sub section (4) shall be reimbursed to the requisitionists by the company and the sums so paid shall be deducted from any fee or other remuneration under section 197 payable to such of the directors who were in default in calling the meeting.(Effective from 01-04-2014)
Provision of Video Conference meeting under Companies Act 2013
Section 173(2) of Companies Act, 2013 (The Act) read with Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014 (The Rules), The participation of directors in a meeting of the Board may be either in person or through video conferencing or other audio-visual means as may be prescribed, which are capable of recording and recognizing the participation of the directors and of recording and storing the proceedings of such meetings along with date and time.
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