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 issued the following requirements subject to which the AGM can be held through VC or OAVM:
For companies which are not required to provide the facility of e-voting under the Act –
- A company can conduct AGM through VC or OAVM only when it has in its records the email addresses of at least half of its total number of members who-
a. in case of a Nidhi, hold shares of more than one thousand rupees in face value or more than one per cent. of the total paid-up share capital, whichever is less;
b. in case of other companies having share capital, who represent not less than seventy-five per cent of such part of the paid-up share capital of the company as gives a right to vote at the meeting;
c. in case of companies not having share capital, who have the right to exercise not less than seventy-five per cent. of the total 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 – II shall be applicable mutatis mutandis 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 mandate for the same and for those shareholders whose bank accounts are not available, company shall upon normalization of the postal services, dispatch the dividend warrant/cheque to such shareholder by post.
Other compliances associated with the provisions relating to general meetings like 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 through electronic mode.
The companies which are unable to conduct their AGM in accordance with the framework provided above are advised to prefer applications for extension of AGM at suitable point of time before the concerned 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 which are not required to provide the e-voting facility by extending facility of conducting meeting through VC or OAVM.