Introduction: In a recent development, The Institute of Company Secretaries of India (ICSI) has addressed a letter to Dr. Manoj Govil, IAS, Secretary of the Ministry of Corporate Affairs, Government of India. The letter, dated September 11, 2023, expresses gratitude for the Ministry’s proactive approach in promoting ease of doing business and creating opportunities for economic growth. The primary focus of this communication is the request for an extension of the Annual General Meeting (AGM) deadline and amendments to related rules.
Background: Section 96(1) of the Companies Act, 2013 mandates that every company, except a One Person Company, must hold an Annual General Meeting (AGM) each year. It specifies that not more than fifteen months should pass between the date of one AGM and that of the next.
Previous Relaxations: The Ministry of Corporate Affairs had issued General Circulars No. 10/2022 and No. 11/2077, both dated December 28, 2022. These circulars allowed companies with AGMs due in 2023 to conduct their meetings on or before September 30, 2023. These AGMs could be held through video conferencing (VC) or other audio-visual means (OAVM). Additionally, companies were permitted to conduct Extraordinary General Meetings (EGMs) and transact items through postal ballots using the same framework until September 30, 2023.
Challenges and Request: With the approaching deadline of September 30, 2023, many companies are still in the process of converting their AGMs to virtual formats. Furthermore, professionals have encountered difficulties in filing the necessary forms due to the launch of MCA V3. To address these challenges, ICSI requests an extension of the deadline for conducting AGMs, EGMs through VC or OAVM, and transacting items through postal ballots. The proposed extension would be until September 30, 2024.
Amendment Proposal: ICSI highlights the positive response and increased shareholder participation observed in virtual meetings, thanks to audio-visual aids. In light of this, they urge the Ministry to consider amending the relevant rules to accommodate and encourage virtual meetings. Such amendments would align with the goals of ease of doing business and enhance the governance framework in India’s corporate sector.
Conclusion: The Institute of Company Secretaries of India (ICSI) has made a compelling request to the Ministry of Corporate Affairs for an extension of the AGM deadline to September 30, 2024. They also propose amendments to the rules to facilitate virtual meetings. This move aims to promote a business-friendly environment and strengthen corporate governance in India. The Ministry’s response to these requests will play a crucial role in shaping the future of corporate meetings in the country.
The Institute of Company Secretaries of India
MCA: 2023 Dated: September 11, 2023
Dr. Manoj Govil, IAS
Secretary
Ministry of Corporate Affairs
Government of India
Shastri Bhawan
New Delhi -110001
Subject: Request for extension I or facility of holding AGM through Video Conferencing
Dear Sir,
At the outset, the Institute of Company Secretaries of India extends its gratefulness towards the Ministry of Corporate Affairs for its sensitized approach towards all its stakeholders and its dedicated attempts made towards promoting ease of doing business, creating a conducive business environment and growth opportunities for the Indian Economy.
This has reference to Section 96(1) of the Companies Act, 2013 which provides that every company other than a One Person Company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it, arid not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next.
We wish to submit that the Ministry of Corporate Affairs vide General Circular no. 10/2022 dated 28th December, 2022, had allowed the companies whose AGMs are due in the Year 2023, to conduct their AGMs on or before 30th September, 2023 in accordance with the requirements laid down in Para 3 and Para 4 of the General Circular No. 20/2020 dated 05.05.2020 i.e., through video conferencing (VC) or other audio-visual means (OAVM).
Similar relaxation was provided vide General Circular no. 11/2077 dated 28th December, 2022, wherein it was decided to allow companies to conduct their EGMs through Video Conference (VC) or Other Audio Visual Means (OAVM) or transact items through postal ballot in accordance with framework provided in the aforesaid Circulars up to 30th September, 2023.
Since, the last date of such relaxation i.e., 30th September, 2023 is approaching and many companies are still in the process of converting their AGMs. Also, the professionals are also facing difficulty in filing the forms because of launch of MCA V3. In view of the same, it is requested that the said date for conducting AGMs and EGMs through Video Conference (VC) or Other Audio Visual Means (OAVM) or transact items through postal ballot may he extended to 30th September, 2024.
Furthermore, given the positive response of the stakeholders and higher number of participation witnessed from shareholders at these meetings on account of audio-visual aids, we request you to kindly consider bringing about an amendment in the Rules concerned to that effect. The same shall go a long way in both promoting ease of doing business as well as strengthening the existing governance framework in the Indian corporate sector.
We hope that the above submission would be considered favorably.
We shall be pleased to provide any further information in this regard on hearing from your goodself.
Thanking You,
Yours faithfully
(CS Manish Gupta)
President
The Institute of Company Secretaries of India
