EGMs now allowed via video conference, other audio-visual means

The Ministry of Corporate Affairs (MCA) on Wednesday issued a circular allowing companies to hold Extraordinary General Meetings (EGMs) through video conferencing (VC) or other audiovisual means (OAVM), complemented with e-voting facility or simplified voting through registered emails.

The relaxation does away with the requirement of the shareholders to physically assemble at a common venue.

The Companies Act, 2013 allows ordinary and special resolutions to be passed through postal ballot or 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, a official statement statement said.

"The Ministry of Corporate Affairs (MCA) is fully cognizant of the difficulties faced by companies on account of the ongoing nationwide lockdown and social distancing due to COVID 19. The Ministry has also taken note of various representations received from industry associations and corporates on the need to facilitate companies in taking certain emergent/urgent measures in the face of extreme disruptions and dislocation caused bythe pandemic," it said.

It said that the circular issued by the MCA 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 or 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 framework leverages the strengths of digital India by using a combination of VC and e-Voting/simplified voting through registered emails to enable companies conduct their EGMs. 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 forparticipation in such meetings.

This framework allows the companies to hold shareholders' EGMs through VC and 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 safecustody, and public companies are also required to host this transcript on their website for greater transparency.

Further, all resolutions passed through this framework will be required to filed with the Registrar of Companies within 60 days, so that such resolutions may be viewed publicly. IANS