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MCA allows companies to hold Extraordinary General Meetings (EGMs) through video conferencing

08.04.2020

In view of difficulty faced by Companies due to COVID 19 and an ongoing nation-wide lockdown, Ministry of Corporate Affairs (MCA) allows companies to hold Extraordinary General Meetings (EGMs) through VC or OAVM complemented with e-Voting facility/simplified voting through registered emails. The Companies Act, 2013 allows ordinary and special resolutions to be passed through postal ballot/e-voting route without holding a physical general meeting. However, in present lockdown/social distancing conditions due to COVID 19, postal ballot facility cannot be utilized by the Companies.

As the meetings will be conducted over VC/ OAVM, the facility for appointment of proxies has been dispensed with, while representatives of bodies corporate will continue to get appointed for participation in such meetings. The General Circular No. 14/2020 dated 8th April, 2020 allows listed companies or companies with 1,000 shareholders or more which are required to provide e-voting facility under the Companies Act, 2013 to conduct EGM through VC/ OAVM and e-Voting. For other companies, a highly simplified mechanism for voting through registered emails has been put in place for easy compliance. The Companies are required to follow the procedure as prescribed by the Circular.

Further, this framework allows the companies to hold shareholders’ EGMs through VC/ OAVM without compromising on the other requirements of law. As an additional check, all companies using this option are required to maintain a recorded transcript of the entire proceedings in safe custody. Public companies are also required to host the transcript on their website for greater transparency. Further, all resolutions passed through this framework will be required to filed with the RoC within 60 days. Other safeguards have also been included in the Circular to ensure transparency, accountability and protection of interests of investors.

Tags : EGMs Video conferencing Circular Issuance

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