I hereby share my views in respect of holding General Meeting (AGM/EGM) during lockdown period or Covid-19” through this article. There are new circulars published on MCA (Ministry of Corporate Affairs) towards clarification of holding AGM/EGM by the Companies. I hope this article would be given some help to our profession.
MCA have published following circulars in respect of conducting General Meetings during period of COVID-19:
1) General Circular No. 14/2020 dated 08th April 2020 (EGM Circular-I);
2) General Circular No. 17/2020 dated 13th April 2020 (EGM Circular-II);
3) General Circular No. 18/2020 dated 21st April 2020 (relaxation of holding AGM by 30th September 2020 for companies whose FY ended on 31st December 2019);
4) General Circular No. 20/2020 dated 05th May 2020 (Clarification of holding AGM);
Latest General Circular No. 20 published on the MCA in respect of “Clarification on holding of Annual General Meeting (AGM) through Video Conferencing (VC) or Other Audio Visual Means (OAVM)” on 05th of May 2020.
As per the above mentioned circulars relaxations are provided in the provision of the Company Act 2013 or rules made thereunder, the companies shall allow to hold its General Meetings (AGM- Annual General Meeting or EGM- Extra-ordinary General Meeting) through Video conferencing (VC) or other audio visual means (OAVM) during this pandemic situation of COVID-19. The clarifications on aforesaid circulars are in following points:
i) Every type of company shall allow to hold its Annual General Meeting/ Extra-ordinary General Meeting through VC or OAVM:
ii) The companies whose financial years ended on 31st December 2019 have been allowed to hold its AGM by 30th September 2020.
iii) The companies are restricted to hold its AGM/EGM through VC & OAVM subjected to fulfillments of requirements as mentioned in the circular (mentioned in Point 3 of General Circular No. 20/2020 dated 05th May 2020):
| A | For companies which are required to provide the facility of e-voting under the Act, or any other company which has opted for such facility | I. for conduction the meeting through VC / OAVM:
–Recorded transcript of meeting shall be maintained in safe custody by the company. For public company: recorded transcript shall be updated on website of the company (if any). -Before scheduling of the meeting, time zone should be kept in the mind. -Two ways teleconferencing/webex. -Time for joining or closing the meeting shall be remained open or close before fifteen minutes of scheduled time. -Facility of providing remote e-voting shall be accordance with act. -attendance of members shall be counted for the purpose of rocking quorum under S-103 of the Act. -Facility for requirement to appoint proxy will not be available for such meetings. – At least one ID where the company having ID- Independent director and the auditor shall attend meeting through VC/ OAVM. -Notice of meeting shall make all disclosures and also provided the helpline number of RTA, technology provider or otherwise. Such notice shall be issued via e-mails to stakeholders and shall provide also be prominently displayed on website of the company. -the chairman shall ensure himself to record the same and conduct the meeting through VC/OAVM. -all the resolutions passed in accordance with this mechanism shall be filed with registrar within 60 days of the meeting. |
| II. In such meetings, other than ordinary business, only those items of special business, which are considered to be unavoidable by the Board, may be transacted. | ||
| III. Instead of sending hard copy of financial statements (including Broad’s report, Auditor’s report and others documents required to be attached therewith), such documents shall be sent only by e-mail to members of the company and to all other persons so entitled. | ||
| IV. Before sending Email containing softcopy of annual report, Public notice shall be published by way of advertisement in the newspapers. | ||
| V. In case, the company is unable to pay the dividend to any shareholder by the electronic mode, due to non-availability of the details of tl’re bank account, the company shall upon normalization of the postal services, dispatch the dividend warrant/cheque to such shareholder by post. | ||
| VI. If a company holds its general meeting via physical presence of some members then there shall also be the facility of the VC/ OAVM. The members present in meeting and the members who shall attend the meeting through VC/OAVM shall be reckoned for the purpose of the quorum of the Meeting. | ||
| B | For companies which are not required to provide the facility of e-voting under the Act | AGM may be conducted through the facility of VC or OAVM only by a company which has in its records, the email addresses of at least half of its
total number of members, who- a) in case of a Nidhi: hold shares of more than one thousand rupees in face value or more than one per cent. of the total paid-up share capital, whichever is less; b) in case of other companies having share capita: who represent not less than seventy-five per cent. of such part of the paid-up share capital of the company as gives a right to vote at the meeting; c) in case of companies not having share capital: who have the right to exercise not less than seventy-five per cent. of the total voting power exercisable at the meeting. |
| II. The company shall be required to register the email addresses of all stakeholders who have not registered their email addresses with the Company. | ||
| III. The framework provided in para 3-B of EGM Circular-I and the manner and mode of issuing notices provided in sub-para (i)-B of EGM Circular–II shall be applicable mutatis mutandis for conducting the AGM.
Clarification in points: –Recorded transcript of meeting shall be maintained in safe custody by the company. For public company: recorded transcript shall be updated on website of the company (if any). -Before scheduling of the meeting time zone should be kept in the mind. -Two ways teleconferencing/webex. -Time for joining or closing the meeting shall be remained open or close before fifteen minutes of scheduled time. -Facility of providing remote e-voting shall be accordance with act. -Attendance of members shall be counted for the purpose of rocking quorum under S-103 of the Act. -chairman of the meeting: Where present members are less than 50-accordance with Section-104 of the Act; or Other cases- appointed by poll conducted through the e-voting system during the meeting. – Facility for requirement to appoint proxy will not be available for such meetings. – At least one ID where the company having ID- Independent director and the auditor shall attend meeting through VC/ OAVM. -Notice of meeting shall make all disclosures and also provided the helpline number of RTA, technology provider or otherwise. Such notice shall be issued via e-mails to stakeholders and shall provide also be prominently displayed on website of the company. -the chairman shall ensure himself to record the same and conduct the meeting through VC/OAVM. -all the resolutions passed in accordance with this mechanism shall be filed with registrar within 60 days of the meeting. |
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| IV. ln such meetings, other than ordinary business, only those items of special business, which are considered to be unavoidable by the Board, may be transacted. | ||
| V. Instead of sending hard copy of financial statements (including Broad’s report, Auditor’s report and others documents required to be attached therewith), such documents shall be sent only by e-mail to members of the company and to all other persons so entitled. | ||
| VI. The companies shall make adequate provisions for allowing the members to give their mandate for receiving dividends directly in their bank accounts through the Electronic Clearing Service (ECS) or any other means. For shareholders, whose bank accounts are not available, company shall upon normalization of the postal services, dispatch the dividend warrant/cheque to such shareholder by post |
iv) The companies are required e-voting or not shall ensure that all other compliances associated with the provisions relating to general meetings viz making of disclosures, inspection of related documents/registers by members, or authorizations for voting by bodies corporate, etc as provided in the Act and the articles of association of the company are made through electronic mode.
v) The companies which are not covered by the General Circular No. 18/2020 dated 21.04.2020 and are unable to conduct their AGM in accordance with the framework provided in this Circular are advised to prefer applications for extension of AGM at a suitable point of time before the concerned Registrar of Companies under section 96 the Act.
All Readers are advised to refer relevant provision of law before applying or accepting any of the point mentioned above or not. Author accepts no responsibility whatsoever and will not be liable for any losses, claims or damages which may arise because of the contents of this write up.
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Nice article… Easy to understand…