Institute of Chartered Accountants of India

Announcement 

MCA has issued Clarification on passing of ordinary and special resolutions by companies on account of the threat posed by Covid-19 and holding an extraordinary general meeting 

Section 100 (1) of the Companies Act, 2013 (the Act), the Board may, whenever it deems fit, call an extraordinary general meeting (EGM) of the company. EGM of any company other than of the wholly owned subsidiary of a company incorporated outside India, shall be held at a place within India.

The Ministry of Corporate Affairs (the MCA) has issued two General Circulars No.14/2020 dated 8th April 2020 and 17/2020 dated 13th April 2020. The MCA has stated that due to the pandemic caused by COVID-19 prevailing which requires social distancing, Companies are requested to take all decisions of urgent nature requiring the approval of members, other than items of ordinary business or business where any person has a right to be heard, through the mechanism of postal ballot e-voting in accordance with the provisions of the Act and rules made thereunder, without holding a general meeting, which requires physical presence of members at a common venue.

Under unavoidable circumstances, holding an EGM by any company, the following prescribed procedure should be adopted for conducting EGM till 30.06.2020:

A. For Companies where e-voting is required/Companies opted for such facility: 

i. VC/OAVM: The EGM’s may be held through video conferencing (VC) or other audio-visual means (OAVM) and transcript of the same shall be kept in safe custody. In case of, Public Company, the same shall be uploaded on the website as soon as

ii. Zones: Different time zones shall be kept in mind.

iii. Deliberations: There should be two-way conferencing with facility to pose questions and participation by at least 1000 members (in case e-voting is allowed) on first come first served basis. Besides this, the promoters, chairman of audit committee nomination and remuneration committee, stakeholders’ relationship committee institutional investors, directors, auditors should be allowed to join.

iv. Joining Time: The Facility for joining meeting shall remain open for at least 15 minutes before and after the timing of the meeting.

v. E-Voting: Before the actual date of meeting, facility of remote e-voting shall be provided.

vi. Present: Attendance of members through VC or OVCM shall be counted.

vii. Voting: Only those members who are present and have note cast their vote on resolutions through remote e-voting or those who are not barred shall be allowed to  vote.

viii. Chairman: To be appointed person named in the articles. In other cases, if less than 50 members present, Chairman shall be appointed as per the provisions of the Act, otherwise, Chairman shall be appointed by a poll.

ix. Voting Facility: Chairman shall ensure that the facility of e-voting is available for purpose of conducting poll at the meeting. In case of less than 50 members by way of e-voting/ show of hands/ poll and in other cases by way of e-voting

x. Proxy: Facility for appointment of proxies shall not be  available.

xi. Independent Director: Atleast one Independent Director (if any) and the auditor or his authorized representative shall attend the meetings.

xii. Institutional Shareholders: Where institutional investors are members of a company, they should be encouraged to attend and vote.

xiii. Assistance: Notice shall provide clear instructions on how to participate in the meeting and also a helpline number be provided.

xiv. Resolutions: All resolutions passed shall be filed within 60 days of the meeting with requisite details.

xv. Meetings if prior scheduled, the framework as per this Circular may be adopted.

B. For Companies where e-voting is not required:

i. No. (iii) as per ‘A’ above should be followed for 500 members.

ii. In case a poll is required, vote can be cast by sending email on the designated email id sent in notice.

iii. Confidentiality of password and due safeguards with regard to authenticity of email address shall be maintanied.

iv. Where less than 50 members are present, voting by show of hands can be conducted if not demanded by poll.

v. Facility of remote e-voting shall not be required.

vi. If counting of votes require time, meeting may be

vii. All other conditions remain the same as mentioned in ‘A’.

 Details are available at

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

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

With Kind Regards,

Chairman / Vice- Chairman

Corporate Laws & Corporate Governance Committe

Source- ICAI

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