MCA allows Conduct Of Shareholder Meetings by Video Conferencing or any Other Audio Visual Means for Urgent Resolutions

On receipt of numerous representations from the stakeholders concerning the difficulties faced by them on account of the threat posed by COVID-19, in holding physical shareholder meetings to pass ordinary and special resolutions of urgent nature, Ministry of Corporate Affairs (‘MCA’) had on 8^th day of April 2020 issued a General Circular No. 14/2020 providing clarification regarding the convening of shareholder meetings by Video Conferencing mode or any other audiovisual mode till 30^th day of June 2020. As the extant provisions of Companies Act, 2013 (“CA13”) does not contain any specific provision for allowing the conduct of meetings via Video Conferencing mode or any other audiovisual mode, reference should be made to section 108 of the CA13 read with Rule 20 of the Companies (Management and Administration) Rules, 2014 which enables voting by electronic mode in case of listed companies and every other company who has at least 1,000 (one thousand) members. Further, section 110 of CA13 requires resolutions other than (i) ordinary business and (ii) any business in respect of which directors or auditors have a right to be heard at any meeting, to be transacted by means of postal ballot. Accordingly, the companies are advised to take all urgent decisions other than (i) ordinary business and (ii) any business in respect of which directors or auditors have a right to be heard at any meeting, requiring approval of members by following the means of e-voting/postal ballot, without holding a general meeting which requires the physical presence of members at a common venue. The circular further provides the procedural formalities to be followed by the Companies where it is not possible to avoid holding Extra-Ordinary General Meetings (EGM) and has categorized it as under: 1. Procedural formalities for companies intending to voluntarily follow e-voting or are covered under the provisions of section 108 to follow means of e-voting. 2. Procedural formalities for companies not covered under the provisions of section 108 to follow means of e-voting. Note: Companies are required to ensure compliance with provisions relating to general meetings such as making of disclosures, inspection of related documents by members, or authorization for voting by body corporates, etc. as mandated by the provisions of CA13 and Articles of the Company. The complete text of the circular may be viewed at below link: http://www.mca.gov.in/Ministry/pdf/Circular14_08042020.pdf Last Updated: 10^th April 2020 This article is contributed by:  Luv Malhotra Senior Manager, Legal    

Tag: Legal Update, MCA