Passing of Ordinary and Special Resolutions by Companies under Companies Act, 2013 on account of threat posed by Covid- 19

Clarification on passing of Ordinary and Special Resolutions by Companies under the Companies Act, 2013 on account of threat posed by Covid- 19.

Pursuant to several representations received by Ministry of Corporate Affairs (MCA) for providing relaxation in passing Ordinary and special resolutions, MCA has provided below mentioned framework for Companies considering overall situation at present:

1. As there is no specific provision for allowing conduct of Shareholder’s meeting through Video Conferencing (VC) or other audio visual means (OAVM), Companies can take all decision of urgent nature requiring approval of members through the mechanism of postal ballot/ e-voting in accordance with provisions of the Act and rules made thereunder.

Exclusion to above: Items of ordinary business or business where any person has right to be heard.

2. In case holding of Extra-ordinary General Meeting (EGM) as per Section 100 of Companies Act, 2013 (the Act) on or before June 30, 2020 is considered unavoidable, following procedure shall be adopted in addition to requirement provided in the Act or rules made thereunder:

S. No. Particulars For Companies which are allowed to provide facility of e-voting under the Act or any other Company which has opted for such facility For Companies which are not required to provide the facility of e-voting under the Act
i. Mode of conducting EGM
  • EGM may be held through VC or OAVM;
  • Recorded transcript of above shall be maintained in safe custody;
  • In case of public company: recorded transcript shall be made available on the website, if any, of the Company at earliest.
same
ii. In case of different persons positioned at different time zones Convenience of members shall be kept in mind before scheduling such meeting/s same
iii. Prerequisites 
  • Such meeting through VC or OAVM facility allows two way teleconferencing or webex;
·      same
  • Participants can ask questions at such meetings or given time to submit in advance on e-mail address of Company;
·      same
  • Such facility shall have capacity to allow atleast 1000 members to participate on first-come-first-served basis;
  • Such facility shall have capacity to allow atleast 500 members or members equal to total number of members of Company, whichever is lower, to participate on first-come-first-served basis;
  • Shareholders holding 2% or more, promoters, directors, KMP, chairperson of Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, auditors, etc may be allowed to attend meeting without restriction;
  • same
  • Facility for joining meeting shall be-

Kept open– atleast 15 minutes before time scheduled; and

Shall remain open– till expiry of 15 minutes after scheduled time;

  • same
  • Facility of remote e-voting shall be provided before actual date of meeting, in accordance with Act.
iv. Notice of said General Meeting
  • shall contain disclosure of manner of conducting said meeting along with instruction on how to access and participate;
  • same
  • shall provide helpline number through RTA or technology provider;
  • same
  • copy of the notice of said meeting shall also be displayed on website of the Company and due intimation may be made to exchanges in case of listed Company;
  • copy of the notice of said meeting shall also be displayed on website of the Company;
  • In case notice for said meeting served prior to this circular– post obtaining the consent from members in accordance with Section 101, Company may adopt the framework proposed in this Circular and fresh notice of shorter duration with due disclosures shall be issued  
  •  same
  • provide designated e-mail address in the notice so that members can convey their vote, when a poll is required to be taken during meeting on any resolution;
  • confidentiality of the password of above mentioned e-mail address shall be strictly maintained;
v. Attendance Attendance shall be counted for reckoning quorum under Section 103 of the Act Same
vi. Voting/ Poll Only such members can cast their vote through e-voting or by show of hands who have not voted through remote e-voting or are not barred from voting Where a poll is required, members shall cast their vote only by sending emails through their registers e-mail addresses at designated e-mail addresses provided in the Notice
vii. Election of Chairman
  • As mentioned in Articles of Company;
  • If members present are less than 50– Chairman shall be elected pursuant to provision of Section 104 of the Act;
  • In all other cases– election by poll conducted through e-voting system during meeting
  • As mentioned in Articles of Company;
  • If members present are less than 50– Chairman shall be elected pursuant to provision of Section 104 of the Act;
  • In all other cases– by poll conducted in manner provided below
viii. Responsibilities of Chairman Ensure that facility of e-voting is available for conducting poll during such meeting
ix. Manner of conducting voting
  • If there are less than 50 members: either through e-voting system or by show of hands unless demand for poll is made in accordance with Section 109 of the Act; and
  • In all other cases: through e-voting
  • Where less than 50 members are present– Chairman may decide to conduct vote by show of hands unless demand for poll is made members; and
  • In case counting of votes required time– the said meeting may be adjourned and called later to declare results.
x. Appointment of Proxy- Section 105 of the Act Not available for said meeting same
xi. Representatives of members- Section 112& 113 of the Act Representatives of members may be appointed for voting through remote e-voting or for participation and voting in the meeting same
xii. Independent Director Where Company is required to appoint Independent Directors, atleast one independent director shall attend same
xiii. Auditors Auditors or his authorized representatives shall attend said meeting same
xiv. If Institutional Investors are the members They must be encouraged to attend and vote through VC or OAVM same
xv. Filing with Registrar of Companies All resolutions passed in said meeting shall be filed within 60 days of meeting clearly indicating that mechanism provided in this circular alongwith provision of Act were duly complied same

Read the General Circular No. 14/2020 issued by Ministry of Corporate Affairs on April 08, 2020

Author Bio

Qualification: CS
Company: Samvardhana Motherson Group
Location: NEW DELHI, New Delhi, IN
Member Since: 08 Apr 2020 | Total Posts: 1

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