MCA clarification regarding holding of AGMs through VC/OAVM
May 6, 2020
Following relaxations on holding of EGMs through Video Conferencing (VC) or other audio visual means (OAVM) and permitting e-voting/voting through registered email, the MCA has clarified that companies may hold their annual general meeting (AGM) by VC/OAVM during the calendar year 2020. Earlier it had allowed companies whose financial year ended 31 December 2019 to hold their AGMs by 30 September 2020. The relaxation in holding of AGMs for all companies has been made owing to the need for continuous adherence to social distancing norms and restrictions on movements of persons.
The procedure given in circulars dated 8 April 2020 and 13 April 2020 for holding of EGMs and manner of issuing notices (refer KM Updates below) will apply mutatis mutandis for the conduct of AGMs during 2020 depending on whether the company is required to provide the facility of e-voting or has opted for the same or not.
Financial statements along with Board’s reports, Auditor’s reports and other documents are required to be sent only through email to members ,trustees for the debenture-holder of any debentures issued by the company and all other entitled persons.
Companies required to provide e-voting facility
In addition to the requirements mentioned above, a company which is required to provide e-voting facility, shall, prior to sending the financial statements and other documents by email, issue a public notice by way of an advertisement in newspapers (in principal vernacular language and English language) circulated in the district in which their registered offices are situated, containing information of date and time of the meeting through VC/OAVM, the manner of casting votes, manner in which email addresses may be registered with the company etc.
Where such a company has received permission from the relevant authorities to hold an AGM at its registered office, it should also provide VC/OAVM facility to allow members other than those who can be physically present to participate. Participation through both means shall be counted towards quorum under section 103 of the CA 2013. All resolutions shall continue to be passed by e-voting.
In case the company is unable to pay the dividend to any shareholder by the electronic mode due to non-availability of the details of the bank account, the company shall, upon normalization of the postal services, dispatch the dividend warrant cheque to such shareholder by post.
Companies not required to provide e-voting facility
Companies which are not required to provide e-voting facility under the Act may hold AGMs through VC/OAVM only if they have on their records the email addresses of half of the total number of members who; (i) in case of a Nidhi company, hold shares of more than One Thousand Rupees in face value or more than 1% of the total paid-up share capital, whichever is less; (ii) in case of other companies having share capital, represent at least 75% of such part of the total paid-up share capital as gives a right to vote at the meeting; and (iii) in companies not having share capital, who have the right to exercise not less than 75% of the total voting power exercisable in the meeting.
Such companies should provide a window to the shareholders for registering their mandate for transferring dividends electronically through ECS or any other means.
To refer to the MCA circular dated 5 May 2020, click here.
This is intended for general information purposes only. The views and opinions expressed in this article are those of the author/authors and does not necessarily reflect the views of the firm
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