Procedure to be followed for conducting EGM under COVID-19 pandemic through ideo conferencing (VC) or other audio visual means (OAVM)

MCA vide its circular no. 14/2020 dated 08/04/2020 made a clarification regarding passing of ordinary and special resolution by companies and also provided a procedure to be followed by the companies while conducting EGM which is considered unavoidable.

The Act does not contain any specific provision for conducting general meetings through video conferencing (VC) or other audio visual means (OAVM). However, MCA has provided a procedure to be followed for conducting EGM through VC/OAVM.

 In case of holding of an EGM by any company is considered unavoidable, the following conditions shall be adopted by companies for conducting such EGM on or before June 30, 2020:

Particulars Companies required to provide facility of e-voting or which has opted for e-voting under Companies Act, 2013 Companies not required to provide the facility of e-voting under Companies Act, 2013
Mode of conducting EGM EGMs, wherever unavoidable, may be conducted through video conferencing (VC) or other audio visual means (OAVM).

The company shall ensure that the facility allows two-way teleconferencing or webex.

Before scheduling the meeting, the company shall keep in mind the convenience of different persons positioned in different time zones.

Notice of the Meeting The notice of the meeting through VC/OAVM shall contain the following:

  • Disclosures in regards to the framework available to the members as per the circular;
  • Clear instructions on how to access and participate in the meeting;
  • Helpline number to assist shareholders regarding the use of the technology before or during the meeting.

The copy of the notice shall be prominently displayed on the website of the company and also duly intimated to the stock exchanges, in case of a listed company.

In case a notice of meeting has been served prior to the circular, the company may adopt the framework provided in the circular by obtaining consent from members as per Section 101(1) of Companies Act, 2013 and issuing a fresh notice of shorter duration with requisite disclosures and information.

Proxy The facility of appointment of proxies by the members shall not be provided under this facility as there is no need for physical attendance of members.

However, this shall not be applicable to members under Section 112 and Section 113 which means that they can appoint representatives for the purpose of voting and participation in the meeting.

No. of participants The facility shall allow at least 1000 members to participate in the meeting on first-cum-first basis. The facility shall allow at least 500 members or members equal to the total number of members of the company, to participate in the meeting on first-cum-first basis.
Participants kept out of first-cum-first basis rule The following may be allowed to attend the meeting without following the first-cum-first rule:

Shareholders holding 2% or more shares;

Promoters;

Institutional Investors;

Directors;

Key Managerial Personnel;

Chairpersons of Audit Committee;

Chairpersons of Nomination and Remuneration Committee;

Chairpersons of Stakeholder Relationship Committee;

Auditors, etc.

Mandatory presence in the meeting Following person are required to mandatory attend the meeting through VC/OAVM:

At least one Independent Director, if applicable on the company;

Auditor of the Company;

In the absence of auditor, the authorized representative of the auditor who is qualified to be an auditor.

Questions by participants The Company shall ensure that the meeting via VC/OAVM allows participants to raise questions immediately.

Also, Company can give time to participants to submit their questions in advance on the e-mail address of the company.

Joining the meeting The facility to join the meeting shall be:

OPEN – 15 minutes before the scheduled time to start the meeting

CLOSE – After expiry of 15 minutes after the start of the meeting

Appointment of Chairman Chairperson shall be as per AOA.

If such Chairperson is not available the Chairperson for the meeting shall be appointed in the following manner:

  • Where there are less than 50 members present at the meeting, the Chairperson shall be appointed in accordance with Section 104 of the Act;
  • In all other cases, the Chairperson shall be appointed by e-voting.
Chairperson shall be as per AOA.

If such Chairperson is not available the Chairperson for the meeting shall be appointed in the following manner:

  • Where there are less than 50 members present at the meeting, the Chairperson shall be appointed in accordance with Section 104 of the Act;
  • In all other cases, the Chairperson shall be appointed through e-mail.
Quorum Attendance of members through VC/OAVM shall be counted for the purpose of reckoning quorum as per Section 103 of the Companies Act, 2013.
Remote e-voting The company shall provide the facility of remote e-voting, before the actual date of the meeting, in accordance with the Companies Act, 2013 and applicable rules. Not Applicable
Voting during the meeting The voting during the meeting shall be conducted in the following manner:

  • Members present at the meeting is less than 50:

Voting may be conducted through e-voting or show of hands.

In case of demand for poll, the voting shall be done by e-voting.

  • In all other cases:

Voting shall be conducted through e-voting.

The voting during the meeting shall be conducted in the following manner:

  • Members present at the meeting is less than 50:

Voting may be conducted through e-voting or show of hands.

In case of demand for poll, the voting shall be done by e-mail.

  • In all other cases:
  • Voting shall be conducted by poll.
Procedure for conducting voting by poll Through e-voting
  • Poll will take place by way of email given by the company.
  • The company shall provide a designated email address to all members at the time of sending the notice of meeting;
  • The confidentiality of the password and other privacy issues associated with the designated email address shall be strictly maintained by the company at all times;
  • Due safeguards concerning the authenticity of email address(es) and other details of the members shall also be taken by the company;
  • During the meeting, where a poll on any item is required, the members shall cast their vote on the resolutions only by sending emails through their email addresses which are registered with the company. The said emails shall only be sent to the designated email address circulated by the company in advance;
  • In case the counting of votes requires time, the said meeting may be adjourned and called later to declare the result.
Members eligible to vote at the meeting through VC/OAVM Only those members, who are present in the meeting through VC/OAVM and have not cast their vote through remote e-voting and are not barred from voting, shall be allowed to vote at the meeting. All members who have joined meeting through VC/OAVM shall be eligible to vote at the meeting.
Transcripts Recorded transcripts of such meetings shall be maintained in the safe custody of the company.

In the case of a public company, such transcripts shall also be made available on the website of the company.

Filing of resolutions with ROC All resolutions passed in accordance with this mechanism shall be filed with Registrar of Companies (ROC) within 60 days of the meeting.
Compliance of other provisions related to general meetings The Company shall ensure that all other compliances associated with the provisions of general meetings viz making of disclosures, inspection of related documents by members, or authorization for voting by bodies corporate and the articles of association shall be made through electronic mode.

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