PROCEDURE TO CONDUCT ANNUAL GENERAL MEETING (AGM) OF COMPANIES THROUGH VIDEO CONFERENCING (VC) DURING THE COVID-19 PANDEMIC
Procedure To Conduct Annual General Meeting (Agm) Of Companies Through Video Conferencing During The Covid-19 Pandemic
The Pandemic COVID-19 has affected the whole world, especially the corporate sector, by shutting down the businesses to maintain social distancing and thus resulting in cessation of almost all economic activities due to which difficulties have been faced by the organisations in their operations.
One of the major difficulties faced by the Company is in the conduct of meetings of the members or directors to discuss the matters needed to be dealt with.
Given the situation, the Ministry of Corporate Affairs (MCA) has provided relaxation in the conduct of meetings vides issuance of its General Circulars for both Board Meetings and General Meetings.
This Discussion is confined to the relaxations provided by the MCA to its Stakeholders for conduct of Annual General Meeting (AGM) on account of the threat posed by COVID-19.
The MCA has issued two circulars for conduct of AGM by the Companies:
Let’s discuss both:
(a) General Circular No.18/2020 dated 21st April , 2020 was issued by MCA to solve the issue of the Stakeholders with regard to difficulty in holding AGMs for the Companies whose financial year ended on 31st December, 2019 due to COVID-19 related social distancing norms and consequential restrictions linked thereto.
“It is noted that as per the Provisions of the Companies Act, 2013, the companies are allowed to hold AGM within a period of 6 months from the closure of financial year and not later than a period of 15 months from the date of last AGM.”
Thus, the Companies whose financial year ended on 31st December, 2019 are supposed to hold AGM till 30th June, 2020 (i.e, 6 months from the closure of financial year) but due to COVID-19 , it is impossible to do.
So, to solve this issue, the MCA vide this circular, clarified that if the Companies whose financial year (other than first financial year) has ended on 31st December, 2019 can hold its AGM for such financial year within a period of 9 months from the closure of financial year i.e, 30th September, 2020 and the same shall not be viewed as a violation.
Also, the references to due date of AGM or the date by which the AGM should have been held under the Act or rules made thereunder shall be constructed accordingly.
A DEATILED NOTE ON THE CONDUCTING ANNUAL GENERAL MEETING THROUGH VIDEO CONFERENCING(VC) OR OTHER AUDIO VISUAL MEANS(OAVM)
This is classified into the three categories:
|1. Preparations||2.During the Meeting||3.Post Meeting Compliances|
|1.The Notice is sent to the members||1.Quorum of the meeting.||1.Uploading the transcript on the website.|
|2.Designated Email Address.||2.Selection of the Chairman of the meeting.||2.After meeting MCA Filings.|
Following are the arrangement required by the company prior to the meeting and notice.
For convening the meeting a notice has to be sent to all the
1. AGM, wherever unavoidable, may be held through VC or OAVM and the recorded transcript of the same shall be maintained in safe custody by the company. IN case of a public company, the records transcript of the meeting, shall as soon as possible, be also made available on the website (if any) of the company.
2. Convenience of different person positioned in different time zone shall be kept in mind before scheduling the meeting.
3. The company shall take all necessary steps to register the email id of all the members who have not registered their email id with the company.
4. The notice is need to be displayed on the website of the company.
5. The company shall provide a designated email address to all the members at the time of sending the notice of meeting so that the members can convey their vote .
6. The company strictly maintained the confidentiality of the password and other privacy issues associated with the designated email address.
7. In case, general meeting held through VC or OAVM, there is no requirement of appointment of proxies.
8. The company is required to provide the details of the technology provider, helpline or contact no. of the person in case of technology disturbance.
9. Owing to the difficulties involved in dispatching of physical copies of the financial statement (including Board report ,Auditor report or other documents required to be attached therewith),such statements shall be sent only by email to the members and all other persons so entitled.
Following are the compliances made by the company during the proceeding of the meeting.
1. Appointment of a chairperson:Where there are less than 50 members present at the meeting the chairperson should be selected in accordance with section 104 of the Companies Act,2013.
2. Chairman shall ensure that quorum should be present in the meeting.
3. The chairman has to make sure that the facility of e-voting systems is available for the purpose of voting during the meeting .(General circular no.17/2020)
4. The facility for joining should be open atleast 15 minute prior and should be closed after the expiry of 15 minutes from the scheduled time.
5. Attendance of members attending the meeting through the VC means shall be counted for the purpose of quorum.
6. Atleast one Independent director and the statutory Auditor should be present at the meeting.
Following are the compliances need to be done after the conclusion of the meeting
1. Once the meeting is concluded the transcript need to be made available on the website of the company.
2. Reappointment of auditor (ADT-1) should be file with ROC within 15 days from the conclusion of AGM
3. Special resolution for reappointment of Independent Director should(MGT-14) be file with the ROC within 30 days from the AGM.
4. Financial statement in form no. AOC-4 should be file with the ROC within 30 days from the conclusion of AGM.
5. Annual return in form no.MGT-7 should be file with the ROC within 60 days from the conclusion of AGM.
6. All the resolution passed at the meeting need to be filled with the register within 60 days to the registrar in form no. MGT-14.
7. Minutes of the meeting should be circulated to all the director within 15 days of the conclusion of the AGM.