On the heels of companies being allowed to conduct board meetings via video conference for certain compliances till June 30, the Corporate Affairs Ministry ( MCA) has extended a similar dispensation to India Inc for holding extraordinary general meetings (EGMs) through video conferencing or other audiovisual means (OAVM) and e-voting.
MCA has now said that EGMs can be held through video conferencing or other audiovisual means till June 30 this year, which is a six months extension to the earlier set time limit of December 31, 2020, for this window.
This facility, which was allowed on April 8 last year in the backdrop of extraordinary circumstances of Covid-19 pandemic prevailing in the country, was to expire on June 30, but was later extended to September 30, December 31, and has now been extended to June 30, 2021.
Proxies
The video conferencing system leverages on 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 had been dispensed with, while representatives of bodies corporate will continue to get appointed for participation in such meetings.
This framework allows companies to hold shareholders’ EGMs through VC/OAVM without compromising on the other requirements of the 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.
Company law experts suggested that the video-conferencing option should be legislated, and such facility be provided as an alternate for small companies. They also suggested that MCA should now consider extending the time limit for holding of annual general meetings, in respect of companies whose financial year ended on December 31.
Harish Kumar, Partner, L&L Partners said: “Given that the pandemic risk has not yet mitigated and travel restrictions continue, the present extension was much needed. It would enable companies to take decisions in timely manner without comprising on shareholders’ participation.”
Aseem Chawla, Managing Partner, ASC Legal, said: “The general circular suggests extension of dispersion upto June 30, 2021. It would be worthwhile to consider legislating the same and provide Other Audio Visual Means as an alternate means for small companies to carry out such corporate compliances.”