IMPACT OF COVID 19 ON ANNUAL GENERAL MEETING (AGM) UNDER COMPANIES ACT 2013:
Pursuant to the provisions of Companies Act, 2013 (Act) read with rules made thereunder, it is required for every Company other than a one person company to hold an Annual General Meeting (AGM) within 6 months (9 months in case of first AGM) from the closure of the previous financial year and not later than a period of 15 months from the date of last AGM. The AGM should be called during the business hours (i.e. between 9 A.M to 5 P.M) on any day other than a national holiday and should 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 situated. The Act further permits e-voting (including remote e-voting) in case of a general meeting and passing of resolutions (except items of ordinary business).
In view of COVID-19, the Ministry of Corporate Affairs (MCA) vide its General Circular No. 20/2020 dated May 05, 2020 granted the relaxation with respect to holding of the AGM through VC or OAVM, during the calendar year 2020. The Company has an option to hold the general meeting via VC or OAVM.
The circular has been divided into two parts which is as follow:
a) the companies which are required to provide e-voting facility under the Act or which have opted for such e-voting facility; and
(b) the companies which are not required to provide e-voting facility under the Act. The Circular clarified that the facility shall be cover for other than the ordinary business items, only those special business items may be transacted, at the AGM held through VC or OAVM, which are considered unavoidable by the Board; the financial statements (including Board’s report, Auditor’s report or any other relevant document required to be attached therewith) can be sent through e-mail on the registered e-mail addresses of the members and the company should take all necessary steps to register the e-mail addresses of all persons who have not registered their e-mail addresses with the company.
Apart of above, the MCA via General Circular No. 27 dated August 03, 2020 has clarified that if the Company is not dispatching notice of general meetings via speed post or any physical way, this will not be considered as violation of the provisions of Companies Act, 2013.
The MCA via another circular no. 28 dated August 17, 2020 has clarified or given an opportunity to the Companies, which are unable to hold Annual General Meeting may file an application to the Registrar of Companies via form GNL-1 for extending Annual General Meeting of the Companies. With this Circular the MCA has provided an opportunity for extension of Annual General Meeting of the Company, but the last date of Annual General Meeting shall be remain same for the Companies i.e. September 30, 2020.
The impact of COVID-19 is very disturbing. No one has been spared of its ill effects. Economies of about 100 plus countries have been destroyed out of which some of them have asked for monetary help. Businesses across the world namely hospitality, entertainment, aviation etc have seen a major negative impact. Various sports events such as IPL and Olympics have been postponed. Schools and colleges have been closed. The virus has also disrupted the functioning of various online giants such as Amazon. Countries such as USA, Italy and Spain are suffering the most since their death toll is very high.
Author – CS Teena Rani, Practicing Company Secretary in Delhi, provides services including Start-ups, Secretarial, Legal, Audit, GST, Book keeping and other ancillary advisory service and can be reached at email id:- email@example.com or +91 8448030979 and 8800369927]