The Ministry of Corporate Affairs (MCA) on Wednesday issued a circular to clarify the procedure on the passing of ordinary and special resolution under the Companies Act, 2013.
In order to fight against the outbreak of coronavirus, the only weapon is social distancing, which has adversely impacted the functioning of companies. So as to minimize the impact the government proposed the idea to hold Extraordinary General Meeting (EGM) through video-conferencing or any other Audio Visual means.
Considering the need to take precautionary steps to overcome the outbreak of the coronavirus (COVID-19), the Government has in-principle decided to relax the requirement of holding Board meetings with the physical presence of directors under section 173 (2) read with rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014 for approval of the annual financial statements, Board’s report, etc. Such meetings may till June 30, 2020 be held through video conferencing or other audiovisual means by duly ensuring compliance of rule 3 of the rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014.
The Companies Act, 2013 lacks provisions relating to allow the meeting of members through video-conferencing or any other Audio Visual means. Section 108 provides for e-voting and Section 110 provides for passing a resolution through postal ballot.
The circular prescribes the procedure so as to conduct an unavoidable Extraordinary General Meeting (EGM).
“EGMs whenever unavoidable shall be held through video-conferencing or any other Audio Visual means and the transcript of the meeting must be kept in the safe custody and the facility for joining the meeting shall be kept open for at least 15 minutes before the time scheduled to start a meeting,” the circular said.To Read the full text of the Circular CLICK HERE