AGM through video conferencing or other audio-visual means during the lockdown
Updated: Jul 15, 2020
Due to extension of lockdown and restriction in movement of people, Ministry of Corporate Affairs (MCA) had earlier issued circulars on April 8, 2020 and April 13, 2020 (MCA Circulars for EGM or Circulars), allowing companies for conducting Extraordinary General Meeting (EGM) through video conferencing or through other audio-visual means. However, the said Circulars did not provide any relaxation with respect to conducting of AGM through electronic means.
MCA has, vide its circular dated May 5, 2020, further clarified that companies can now conduct the Annual General Meeting (AGM) through electronic means during calendar year 2020, in a similar way as it has allowed to conduct EGM.
Applicable to any company having less than 1000 shareholders.
AGM can be conducted through video conferencing or other audio visual means only by a company having email addresses of at least 50% of its shareholders on its record, who: (a) in case of a Nidhi company: shareholders’ who holds shares of more than Rs. 1,000/- in face value or more than 1% of the total paid-up share capital, whichever is less; (b) in case of other companies having share capital: shareholders’ who represent not less than 75% of such part of the paid-up share capital of the company, which provides them the right to vote at the meeting; and (c) in case of companies not having share capital: shareholders’ who have the right to exercise not less than 75% of the total voting power exercisable at the meeting.
Companies should take all possible steps to register email addresses of all the shareholders, whose email address is not registered on the company’s records.
MCA Circulars for conducting of EGM shall be applicable mutatis mutandis for conducting meeting through video conferencing or through other audio-visual means and dispatch of notice.
Financial statements, auditor’s report and/or any other documents shall be sent only via email. Physical dispatch of above documents is not required.
Adequate provisions should be made by companies allowing the members for receiving dividends in their bank accounts through the Electronic Clearing System. If the company does not have the details of the bank account of the shareholders’, the dividend warrant/cheque should be dispatched to shareholders by post, upon normalization of postal services.
All companies shall ensure that the provisions relating to general meetings viz. making of disclosures, inspection of related documents/registers by members, or authorizations for voting by bodies corporate, etc. as provided in the Act and the articles of association of the company are made available through electronic mode.
The companies who are required to mandatorily hold their AGM on or before September 30, 2020 and are unable to conduct their AGM in accordance with the framework provided in this Circular are advised to make an application for extension of AGM at suitable point of time before the concerned Registrar of Companies under Section 96 the Companies Act, 2013.
Additional points to be kept in mind:
Companies are advised to contact all those members whose email addresses are not registered over telephone or any other mode of communication for sending the notice of the meeting.
Where any contact details are not available with the company or the same could not be obtained, a public notice by way of an advertisement should be published immediately in 1 vernacular language of the district in which the registered office of the Company is situated and at least in 1 English newspaper both having wide circulation in that district, preferably both newspaper having electronic editions.
The newspaper advertisement shall specify the following information: (a) the intention of a company to convene a general meeting in compliance with the applicable provisions read with General Circular No. 14/2020, dated 8th April, 2020; and (b) the contact details of the company i.e. contact number and email address on which members may contact for getting their email addresses registered for participation and voting in the general meeting.
The notice of such meeting shall be sent to members, after a minimum of 3 days from the date of publication of the public notice.
In such meetings, other than ordinary business, only those items of special business, which are considered unavoidable by the Board of Directors, may be transacted.
Note: Clarification for Companies having more than 1000 shareholders has been separately provided in the Circular.