The Ministry of Corporate Affairs has vide notification dated 05th May 2020 has relaxed the provisions of conducting the Annual General Meeting (AGM) by allowing conducting AGM through Video Conferencing or other Audio-Visual Means.
The ministry has published the below requirements subject by which the AGM can be conducted through OAVM or VC:
The companies which NOT needed to provide the facility of e-voting under the Act:
- A company can organize AGM by OAVM or VC only when the company is having email addresses of half of its total number of employs or members in its records who-
- In Nidhi’s case, the document is served only to members who hold shares of more than one percent or more than one thousand rupees in face value, of the overall paid-up share capital of it (Nidhi) whichever is minimum.
- in case of other companies having a share capital, who represent not less than seventy-five percent of such part of the paid-up share capital of the company as gives a right to vote at the meeting.
- in case of companies not having a share capital, who have the right to exercise not less than seventy-five percent of overall voting power (exercisable) at the meeting.
- The framework provided in para 3-B of EGM Circular – I and the manner and mode of issuing notices provided in sub-para (i)-B of EGM Circular – IIshall be applicable once the required changes have been made for conducting the AGM.
- In such meetings, other than ordinary business, only items of special business which are considered to be unavoidable by the Board may be transacted.
- Instead of delivering physical copies of financial statements,such statements shall be sent only by email to the members, debenture trustees, or any other person who is entitled to the same.
- Dividends can be paid directly in the bank accounts through Electronic Clearing Service (ECS), of the members and adequate provisions to be made for allowing members to give their directive or mandate for the same and company normalize postal services for dispatching the dividend cheque/warrant for those shareholders whose bank accounts are not available.
Making disclosures, authorization, or allowance for voting by bodies corporate, examining related registers/documentsby members,etc. are the compliances associated with the provisions related to general meetings aspresented in the Act and company’s articles of association are made of electronic mode.
The companies which are unable to conduct their AGM following the framework provided above are advised to prefer applications for extension of AGM at a suitable point of time before the regarded Registrar of Companies under Section 96 the Act.
Thus, the Ministry has relaxed the provisions of conducting Annual General Meetings through VC or OAVM even for companies that are not required to provide the e-voting facility by extending the facility of conducting meetings through VC or OAVM.
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Posted by: CA Neetu Saini