Clarification on holding of agm through video conferencing (Vc) or other audio visual means (OAVM)

Due to the threat of COVID – 19, there is a restriction on the movement of persons from one place to other in the country.

Several Representations have been received in the ministry for providing relaxations in the provisions of companies act, 2013 or rules made thereunder to allow companies to hold the Annual general Meeting of the Company through VC ‘s and OAVM.

Applicable General Circular
  • Clarification on passing of ordinary and special resolutions by companies under the Companies Act, 2013 and rules made thereunder on account of the threat posed by Covid-19.

https://taxguru.in/company-law/mca-allows-companies-hold-egms-through-vc-oavm.html

  • Clarification on passing of ordinary and special resolutions by companies under the Companies Act, 2013 and rules made thereunder on account of the threat posed by Covid-19.

https://taxguru.in/company-law/mca-further-clarifies-passing-ordinary-special-resolutions-covid-19.html

  • Holding of AGMs by companies whose financial year ended on 31st December, 2019

https://taxguru.in/company-law/companies-allowed-hold-agm-till-30-09-2020-fy-ending-31-12-2019.html

  • Clarification on holding of annual general meeting (AGM) through video conferencing (VC) or other audio visual means (OAVM)

https://taxguru.in/company-law/mca-clarifies-holding-digital-agm-through-vc-oavm.html

Which Company is required to conduct Annual General Meeting (AGM) As per section 96 of the Companies Act, 2013 Every company other than One Person Company shall hold an AGM in each financial year in addition to any other meetings.
Time Line for holding AGM
  • First AGM: within a period of 9 months from the date of closing of first financial year.
  • Subsequent AGM:  within the period of 6 months from the end of each financial year.

# If the company holds its first AGM as aforesaid, it shall not be necessary to hold any AGM in the year of its incorporation.

Is extension of AGM possible? , if Yes under which section and who has the authority for  granting extension of AGM
  • Yes, extension can be granted for Holding AGM
  • As per section 96 (1) of companies act, 2013 the Registrar of Companies have the power to extend the time of an AGM for a period not exceeding 3 months.
Can first AGM be also get extended??
  • No, As per section 96 (1) of companies act, 2013 the First AGM of any company cannot be grant any extension to hold AGM.
Time to hold an AGM
  • Every AGM shall be called during business hours i.e between 9 a m and 6 p m.
Can AGM be held on Sunday? if yes, then under which section
  • Yes, As per Section 96(2) of companies act, 2013 the meeting can be held on any day except national holiday, as declared by Central government.
Venue of the AGM
  • 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
Whether any company can hold the AGM at any place other than its registered office?
  • Yes, the AGM 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 of the company in advance.
Notice of meeting
  • May be called by giving not less than 21 clear days notice either in writing or through electronic mode.
Can AGM be held at shorter notice
  • Yes, as per section 101 (1) of companies act, 2013 a general meeting may be called after giving shorter notice if consent, in writing or by electronic mode, by not less than ninety-five per cent of the members entitled to vote at such meeting–
Can 21 day notice period also applicable on section 8 company?
Quorum for meeting (section 103 of the companies act, 2013) 1. Unless the articles of the company provide for a larger number, —

a) in case of a public company,

(i) five members personally present if the number of members as on the date of meeting is not more than one thousand;

(ii) 15 members personally present if the number of members as on the date of meeting is more than one thousand but up to five thousand;

(iii) 30 members personally present if the number of members as on the date of the meeting exceeds five thousand;

b) in the case of a private company , two members personally present, shall be the quorum for a meeting of the company.

What’s the procedure to hold AGM if quorum is not present? If the quorum is not present within half-an-hour from the time appointed for holding a meeting of the company —

(a) the meeting shall stand adjourned to the same day in the next week at the same time and place, or to such other date and such other time and place as the Board may determine; or

(b) the meeting, if called by requisitionists u / s 100, shall stand cancelled:

Is it mandatory to hold the adjourned AGM on the same day in the next week?
  • No, if there is any change in the day, time or place of meeting under clause (a), the company shall give not less than three days notice to the members either individually or by publishing an advertisement in the newspapers (one in English and one in vernacular language) which is in circulation at the place where the registered office of the company is situated.
What to do if in adjourned meeting also the quorum is not present?
  • If at the adjourned meeting also, a quorum is not present within half-an-hour from the time appointed for holding meeting, the members present shall be the quorum.
Can AGM be held through video conferencing (VC’S) or other audio video means (OAVM) Yes, as per general circular no. 20 / 2020 dated 5th May, 2020. The general meeting can be hold through VC’s and OAVM.
Can this procedure be followed lifetime No, as per General circular no 20/2020 dated 05.05.2020 only for those meeting which will conducting during the calendar year 2020
Whether the company have to maintain any records for VC’s and OAVM Yes, every company will have to maintain the recorded transcript in safe custody

In case of public company, the recorded transcript will also be made available on the website of the company.

What precautions should be taken by the company while conducting meeting through VC’s and OAVM
  • The facility of two way teleconferencing or webex will be allowed to all the participated members of the company to pose any questions concurrently.
  • Must have a capacity to allow at least 1000 members to participate on first come first served basis. (where company provide the facility of e – voting)
  • Must have a capacity to allow at least 500 members or members equal to the total no. of members of the company (whichever is lower) to participate on first come first served basis. (where the company does not provide the facility of e – voting)
Can chairman, auditors, directors, KMP etc be also attend AGM through VC’s and OAVM Yes,

  • Larger shareholder (shareholder holding 2 % or more shareholding)
  • Promoters
  • Institutional investors
  • Directors
  • KMP’s
  • Chairperson of audit committee, nomination and remuneration committee and stakeholders relationship committee
  • Auditors etc.

May be allowed to attend the meeting on first come first served basis.

Till what time the members have to attend the meeting The facility for joining the meeting shall be kept open at least 15 minutes before the time schedule to start the meeting and shall not be closed till the expiry of 15 minutes after the scheduled time.
What’s the process to count the quorum for the meeting Attendance of members through VC’s and OAVM shall be counted as per section 103 of the act.
Modes for casting the votes during AGM through VC’s and OAVM
  • Through e – voting system or by
  • Show of hands
Process to appoint the chairman for the meeting
  • The person will be appointed as the chairman of the meeting as the article of association of the company
  • The following procedure will be followed for such appointment:

1.  If there are less than 50 members present at the meeting, the chairman shall be appointed as per section 104 of companies act, 2013

2.  In other cases, the chairman will be appointed through poll

Whether proxy / representatives are also allowed to attend the AGM
  • Yes, as per section 105 of the act, the proxy is also allowed to attend and cast their vote at the meeting on behalf of the member.
  • As per section 112 and 113 of the act, representatives of the member may be appointed for the purpose of voting.
What are the disclosures to  be mentioned in notice for conducting the AGM
  • The company will provide a helpline no. through the registrar & transfer agent, technology provider for those shareholder who need assistance before or during the meeting.
  • The notice should also be displayed on the website of the company and also inform stock exchanges, if listed.
Whether the AGM can be conducted through VC’s or OAVM if the notice already  dispatched prior to the date of this circular. Yes, if the notice for the meeting has been served prior to the date of this circular, then the framework proposed in general circular no. 14 / 2020 regarding clarification on passing of ordinary and special resolution by companies act, 2013 and rules made thereunder on account of the threat posed by COVID – 19 may be adopted for the meeting, if the consent of the members has been obtained as per section 101 (1) of the act and fresh notice of shorter duration with full disclosure is issued consequently.
What are the procedures and modes of issuing notice to the members Where the Company provide the facility of e – voting:

1.   As per rule 18 of the Companies (management and administration) rules, 2014 the notice may be given only through e – mails or with depository participants / depository

2.  While publishing the notice as required under rule 20(4) (v) the following matters shall also be stated:

a)  A statement that the EGM has been convened through VC or OAVM in compliance with the applicable provisions read with circular 14 / 2020, dated 8th April, 2020 and circular 17 / 2020,dated 13th April, 2020.

b)  The date and time EGM through VC or OAVM

c)  Availability of notice on the websites and stock exchanges.

d)  Members who are holding the shares physically or who have not registered their e mail address with the company can cast their votes through remote e – voting or e – voting system during the meeting.

e)  The manner to get their e – mail address registered with the company for the unregistered members.

f)   Any other details considered good.

3.  The chairman will satisfy himself and record the same before considering the business in the meeting

  • Company which are not providing the facility of e – voting:

1)  As per rule 18 of the Companies (management and administration) rules, 2014 the notice may be given only through e – mails or with depository participants / depository.

2)  A copy of notice will be displayed on the website of the company.

3)  To ensure that all the members are aware about the General meeting in compliance with the applicable provision read with circular 14 / 2020, dated 8th April, 2020 the company shall:

a)  Before sending notices the company will contact telephonically or through any other mode of communication, to all those members whose e – mail address are not registered with the company for its registeration.

b)  If the contact detail of any member is unavailable then it shall cause a public notice by way of advertisement to be published at least once in a vernacular newspaper in the principle vernacular language of the district in which the registered office of the company is situated. and having a wide circulation in that district then at least once in English language in an English newspaper, preferably both newspaper having electronic editions. And specify the following information in an advertisement :

  • The company intends to convene the general meeting in compliance with applicable provision read with circular 14 / 2020, dated 8th April, 2020 and circular 17 / 2020, dated 13th April, 2020 and for that purpose the company send notices to all members via e – mail at least 3 days from the date of publication of notice.
  • The details of the e – mail and telephone no. on which the members may contact for getting their e – mail registered for participation and voting in the general meeting.

4. The chairman will satisfy himself and record the same before considering the business in the meeting

What’s the last date to hold AGM for the company whose financial year ended on 31st December, 2019 As per circular no.18 / 2020 dated 21st April, 2020 it has been clarified that if the company whose financial year ended on 31st December, 2019 hold their AGM within a period of 9 months from the closure of financial year i.e 30th September, 2020.
What kind of businesses to be transacted in the meeting In such meeting other than ordinary business and only those special businesses which are considered to be unavoidable by the board, may be transacted.
Mode to sent the financial statements  including board report, auditors report etc. All the documents shall be sent only by e – mail to all the members, trustees for the debenture holders of any debenture issued by the company.
what particulars should be specified in an advertisement Before sending the notices  to the members
  • Statement that the AGM be convened through VC or OAVM
  • The date and time of AGM through VC or OAVM
  • Availability of notice of the meeting on website, and in stock exchange if listed.
  • The manner in which members who holds the shares in physical form or who have not registered their mail address can cast their vote through remote e – voting or e – voting system
  • The manner to get the e – mail address registered with the company
  • The manner in which the member can give receive their dividend directly in their bank account through Electronic clearing service (ECS) or any other means
  • Any other details considered necessary.
Can the company pay the amount of dividend through postal services. If the company is unable to pay dividend by electronic mode then the company will dispatch the dividends warrant / cheque to such shareholder by post upon the normalisation of postal services.

 Disclaimer:

This article is for informational purposes only, but not promised or guaranteed, to be correct, complete, and up-to-date. and hereby disclaims any and all liability to any person for any loss or damage caused by errors or omissions, whether such errors or omissions result from negligence, accident or any other cause.

About Author:

CS Richa Mittal, a workaholic in nature, is an associate member of the Institute of Company secretaries of India since 2016. She is an independent corporate consultant. She possesses good professional experience for more than 4 years in secretarial field. She likes to research over different topics and pen them down. Recently love to post all the upcoming notification and circulars to keep the viewers updated.

For any further query free to contact us on

M.No. 9899633732

E – mail: csrichamittal@gmail.com.

Author Bio

Qualification: CS
Company: Bhupesh Mittal & Associates
Location: Gurgaon, Haryana, IN
Member Since: 18 May 2020 | Total Posts: 4

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