Govt’s proactive steps
In the Unprecedented times of Covid 19, the Indian government is taking proactive steps. The Govt is duly empathising with the concerns of the industry, SMEs, organised and unorganised sector which has been a backbone of the economy.
Govt has already taken various measures starting from CAR (MCA Covidness ready form), finance minister package on 23rd march 2020, issuing GST notification dated 23rd march 2020, FMs announcement of relief packages as on 26th march 2020, RBIs relief package on 30th march 2020, extension of validity of expired driving licenses, vehicle registrations’, extension of time limit for lower deduction of TDS, MCA CFSS 2020 on 30th march 2020 for companies/ LLPs to avail one time facility to file pending statutory compliances, Income tax ordinance on 31st march 2020, relief in filing of GST returns vide bunch of notifications on 03rd April 2020, extension of Form 15G as on 03rd April 2020, releasing of income tax refunds on timely basis on 08th April 2020.
Call for timely decisions
Understanding the lockdown situation which tantamount to curfew, there was a doubt as how to do the board meetings where timely decisions to monitor the progress of the situations, to take account of the economy, to forecast the impact of this emergency on the financial health of the business. The govt had given advisory and instructions to release the salary of the workers which calls for some board decisions and to keep the businesses afloat as a going concern after the situation will be over, some timely board decisions need to be taken.
The Board of Directors being the collective and united brain of the Company should take prompt decisions for the benefit of the company.
Board Meeting is not an easy thing to just put in paper. Further no single person can take any decision which has an impact on the business be it good or bad. For making decision making and to discuss such things for the benefit of the company the Directors should meet in a formal or official forum where study/strategic decisions are to be taken.
Generally, the actions taken by the company is backed by the Board. However, there are certain situations where the Board of Directors can make decisions as they are involved in day to day activities of the company. Certain decision-making power can also be given to committees and subcommittees.
The Meeting of the Board must be held frequently at regular intervals for periodic performance assessment or valuation of the company and to figure out the strategies for making managerial decisions for future endeavours and achievements. The directors may meet in casual manner regularly for the discussion and transaction of business.
Understanding this practical scenario, Ministry of Company Affairs has allowed to have meetings through video conferencing without the physical presence.
Now, the meetings will be held through video-conferencing or other audio-visual means. Companies will be able to hold meetings for matters such as approval of financial statements, books of accounts, approval of the board’s report and approval of matters relating to mergers and restructuring. Currently, for such meetings, physical presence is mandatory.
The government on Wednesday further eased compliance norms for Indian companies as they move to pass ordinary and special resolutions amidst the lockdown to limit the spread of the Covid-19 outbreak. The Ministry of Corporate Affairs (MCA) in a circular issued on Wednesday said that companies can take urgent decisions without convening a general meeting and ratify them through the e-voting process.
This relaxation is not applicable for decisions of ordinary course or business where any person has right to be heard. ‘Unavoidable’ extraordinary general meetings (EGMs) need to be held through video-conferencing (VCs) and a transcript of the proceedings would need to be maintained by the company. “Such VCs would need to have a capacity to allow at least 1000 members to participate,” said MCA in the circular. These need to be on first come first serve basis.
This is applicable for companies which need to give an e-voting (electronic voting option). For companies not required to give e-voting facility the VC needs to have capacity of 500 members.
Members and participants need to be given opportunity to pose questions, MCA said.
Some of the important members who can be a part of EGM even if they are not the first to login includes – promoters, institutional investors, directors, key managerial personnel, auditors among others.
Members can also vote for the special resolution through show of hands during the VC, if there are less than 50 members participating in it.
Earlier the MCA on 18 March had relaxed the requirements of holding board meetings requiring physical presence of directors till 30 June.
While every care has been taken to ensure the accuracy/ authenticity of the above, the readers are advised to recheck/ reconfirm the same from the original sources/ relevant departments. The company shall in no way be responsible for any loss or damage suffered to any person on account of the same.