In a major relief for India Inc, the Ministry of Corporate Affairs (MCA) has now allowed companies —whose annual general meetings (AGMs) are due in the year 2023 and 2024 —to hold them through video conference (VC) mode till September 30, 2024.
In a separate move, the MCA has also allowed companies to hold their extraordinary general meetings (EGMs) via video conference and transact items through postal ballot till end September 2024.
“In continuation to this ministry’s general circular dated May 5 , 2020, general circular dated May 5, 2022, general circular dated December 28, 2022, it has been decided to allow the companies whose AGMs are due in the year 2023 or 2024, to conduct their AGMs through VC or OAVM on or before September 30, 2024,” the MCA said in a circular on Monday.
The video conferencing system 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 had been dispensed with, while representatives of corporate bodies will continue to get appointed for participation in such meetings.
The MCA circular 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. Also, the companies 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 up to September 2024 would be available for companies whose financial year ends on December 31, 2023 or March 31, 2024. The move is in continuation of relief announced for India Inc post the onset of Covid-19 pandemic.
In March 2020, the MCA took several measures to make life easy for India Inc to meet the company law’s compliance requirements.
In December last year, the MCA extended virtual AGM facility till September 2023 in respect of companies that were to hold AGM in the year 2023. MCA had also then clarified that companies can hold their extraordinary general meetings (EGMs) via video conference and transact items through postal ballot till end September 2023.
In the backdrop of Covid-19 pandemic, the MCA had on April 8, 2020 for the first time allowed companies to hold EGMs through virtual mode till June 30, 2020. This was later extended multiple times to September 30, December 31, 2020, June 30, 2021, December 31, 2021, June 30, 2022, December 31, 2022 , September 30, 2023 and now to September 30,2024.
The move is in alignment with the broader objective of acknowledging the digital mode as an alternative efficacious mode for conducting affairs of companies.
Some experts even suggested that the video-conferencing option should be legislated, and such facility be provided as an alternate for small companies.