Given the difficulties faced by the stakeholders on account of the threat posed by COVID-19, the Ministry of Corporate Affairs (MCA) have issued a circular (No.14/2020) on 8th April 2020 for allowing the conduct of members meeting through video conferencing (VC)or other audio visual means (OAVM).
The Companies Act, 2013 (Act) does not provide provisions of holding General meetings through VC. Hence, if any company cannot hold the meeting physically due to COVID-19, then the Company can hold the meeting through VC/OAVM mode by following the procedure prescribed in the circular.
There are two separate procedures for those companies which are required to provide a facility of e-voting under Section 108 of the Act and for those companies which are not required to provide e-voting facilities.
In this article, I am highlighting provisions for those companies which are not required to provide e-voting facilities. All private companies are not required to provide such facilities.
Provisions: General Circular No.14/2020 dated 8th April 2020
Applicability: EGM to be held for passing ordinary and special resolutions to be conducted on or before 30 June 2020
THE HIGHLIGHT OF THE PROVISIONS ARE AS FOLLOWS:
Recording and Time zone
Chairman appointment if Articles of the Company not prescribed any person to be appointed as Chairman
Mandatory attendance apart from quorum:
Notice of the meeting
All resolutions passed in accordance with this mechanism shall be filed with Registrar of Companies (“ROC”) within 60 days of the meeting indicating therein that mechanism provided herein along with other provisions of the Act and rules were duly complied with.
Practical challenge/Author’s observation
In the backdrop of the current circumstances of COVID-19 pandemic prevailing in the country, the MCA has given the relaxation for the company to hold the general meeting electronically.
This relaxation is a significant measure as the Act does not provide any specific provisions for allowing members to meet through VC or OAVM. This measure would give way for promoting the digital India concept and would enable corporates to take certain urgent decisions in the face of extreme disruption caused by the pandemic.
This temporary measure will open the door for virtual general meetings in times to come.
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