The Department of Company Affairs (DCA) proposes to make an amendment in the Companies Act, 1956 to enable companies to hold the Board Meetings through electronic means such as video conferencing and telephone conferencing to take advantage of information technology.
The Department has received proposals to allow such meetings and it has held extensive consultation with various shades of opinion. It also asked the Institute of Company Secretaries to examine this matter and to organize consultation with companies and other stake holders. Finally, the Department has decided to allow such meetings of the Boards and its Committees. However, DCA has also decided that there are some subjects of special importance which should only be decided or transacted by meetings in person i.e. “physical meetings”. It is proposed to notify such subjects from time to time.
The Department feels that considering the advantage of “physical meetings” , it should prescribe a certain minimum number of Board meetings must be held in person. This would also be notified from time to time. In keeping with the developments of the information technology, it also proposes to reorganize issue of notices of Board meetings through other means such as e.mail, fax etc. other than normal letters.
It proposes to regulate the new provisions through promulgation of Rules which can be progressively liberalized or modified in accordance with the experience gained from time to time. These decisions have been taken on ‘demands’ received from various sectors keeping in mind the progressive globalization of the Indian economy.
The proposed amendment is likely to go a long way with the Commerce Ministry urging to liberalize the Special Economic Zones to a greater extent from the applicability of Indian Laws and attract more FDIs.