With health emergency prevailing in major cities and normalcy yet to return in corporate functioning post the Covid-19 induced lockdown, the Corporate Affairs Ministry (MCA) on Monday stepped in to provide series of measures to ease their compliance burden. It has now allowed three more months for Corporate India to hold Extraordinary General Meetings (EGMs) through video conferencing or other audiovisual means and e-voting.
This facility, which was allowed on April 8 in the backdrop of extraordinary circumstances of Covid-19 pandemic prevailing in the country, was to expire on June 30, but was extended to September 30, and has now been extended to December 31.
The latest MCA move is expected to facilitate corporate compliance during the current lockdown period, especially in the main metro cities of the country, said experts.
LLP Settlement Scheme
MCA has also extended the validity of scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act till December 31. Also, the LLP Settlement Scheme 2020, which was valid till September 30, now stands extended to December 31.
The LLP Settlement Scheme has been further extended to December 31 to enable LLPs to make good their previous defaults, the Finance Minister’s office tweeted on Monday.
It may be recalled that the latest framework on conduct of EGM via video conferencing leverages the strengths of digital India by using a combination of VC and e-voting/simplified voting through registered emails to enable companies to conduct their EGMs.
As the meetings will be conducted over VC/OAVM, the facility for the appointment of proxies has been dispensed with, while representatives of bodies corporate will continue to get appointed for participation in such meetings.
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, 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 be filed with the RoC within 60 days, so that such resolutions may be viewed publicly. Other safeguards have also been included in the MCA circular to ensure transparency, accountability and protection of interests of investors.