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Many an organisation may be deeming physical attendance of employees mandatory, but when it comes to company AGMs, virtual will continue to rule.
The Corporate Affairs Ministry (MCA) has allowed companies to hold their annual general meetings (AGMs) through video conference (VC) mode till September 30 next year, extending a benefit it had made during the pandemic-hit years.
In a separate move, the MCA, in a circular issued on Thursday, has allowed companies to hold their extraordinary general meetings (EGMs) via video conference and transact items through postal ballot till end-September next year.
As the meetings will be conducted over video conference, the facility for the appointment of proxies has been dispensed with, while representatives of corporate bodies will continue to get appointed for participation in such meetings.
Clarification
The MCA circular also clarified that the latest move should not be considered as conferring any extension of time for holding of AGMs by the companies under the Companies Act 2013. Companies that have not adhered to the relevant timelines would be liable for legal action under the appropriate provisions of the Companies Act 2013.
Company law experts highlighted that the latest dispensation to hold virtual AGMs upto September 2023 would be applicable for companies whose financial year ends on December 31, 2022, as well as March 31, 2023. This should be seen as continuation of compliance relief announced for India Inc. post the onset of Covid-19 pandemic in March 2020.
In May last year, the MCA had extended virtual AGM facility till December 2022 in respect of companies that were to hold AGM in the year 2022.
Covid-19 surge scare
Although there has been some conjecture about whether virtual AGMs will become permanent, this latest MCA move has been likely precipitated by the Covid-19 resurgence warnings. The Union Health Ministry has, from January 1 , 2023, made negative RT-PCR reports mandatory for passengers arriving from China, Hong Kong, Singapore, Japan, South Korea and Thailand.
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