Covid-19: India Inc allowed to hold virtual AGMs till December 31

In another significant relief for India Inc in the current pandemic times, the Ministry of Corporate Affairs (MCA) has allowed companies to hold their Annual General Meetings (AGMs) scheduled for 2021 through video conferencing (VC) or other audio-visual means (OAVM) till December-end.

This dispensation will also be available for AGMs that were due to be held in 2020 and where companies had obtained individual extension from the Registrar of Companies (RoC).

Last August, the MCA had granted more time to companies that had not been able to hold their AGMs for FY20. This was allowed so long as they filed a separate application for this purpose before the concerned RoC. Most RoCs had allowed extension till December 31, 2020.

Although the MCA has now allowed AGMs to be conducted through VC on or before December 31, 2021, it has in the latest circular made it clear there is no blanket extension this time round for companies, especially for those that had to conduct AGMs by December 31, 2020. Suppose a company has not held its AGM in 2020 and not got an extension from the RoC to hold it beyond December 31, 2020, then such companies cannot hold it now. If they still do it, then legal action can be initiated by MCA, company law experts said.

Under Companies Act, 2013, the AGM has to be conducted within six months of the end of the financial year and not later than a period of 15 months from the date of the last AGM. In the wake of the Covid-induced lockdown, the MCA had from time to time given relaxations as regards regulatory compliances.

Commenting on the MCA move, SN Ananthasubramanian, former President of the Institute of Company Secretaries of India, said this was a relevant and appropriate step in the current circumstances and in keeping with the times.

Shinoj Koshy, Partner, L&L Partners, said: “Extending the order allowing AGMs be held through VC and OAVM is a positive move. Despite the vaccine it is important to continue to follow pandemic related safety protocols. This will allow companies to offer VC and OAVM participation modes to shareholders and behave as responsible corporate citizens doing their bit in avoiding super spreader events.”

Manish Gupta, Partner, IndusLaw, said this would help the companies fulfil their statutory obligations in the current Covid scenario, especially when the MCA does not intend to extend the timelines to hold AGMs any further.

Vidisha Krishan, Partner, MV Kini & Co, said: “In the light of the continued Covid-19 situation this is a logical extension of the VC relief measures taken so far. I feel this is a necessary continuation of the flexibility and will continue till even the residual effects of the pandemic remain.”