Amid to the outbreak of COVID 19 and subsequently extension of lockdown, the Ministry of Corporate Affairs had issued Circular on April 8, 2020 and April 13, 2020 allowing companies for conducting EGM through VC or OAVM. However, the said Circular excluded AGMs to be conducted through electronic means.
The Ministry has vide its Circular dated May 5, 2020, clarified that the companies are allowed to conduct its Annual General Meeting through electronic means during calendar year 2020, in similar way as it was allowed to conduct EGMs.
The key points of the above referred Circular are as follows:
A) For Companies which are required to provide e-voting facilities:
- Provisions of MCA Circulars for EGM would be applicable mutatis mutandis for conducting AGMs through VC/OAVM.
- Financial statements, auditor’s report and/or any other documents shall be sent only by email. Physical dispatch of above documents is not mandatory.
- Public notice should be published before sending notice of AGM and other documents. Also, Public notice by way of advertisement should contain the information related to holding of AGM through VC/OAVM as per this MCA circular, details of which is provided on Page no. 3 of said Circular.
- Due to non-availability of bank account of shareholders, the company should dispatch dividend warrant/cheque to shareholders by post, upon normalisation of postal services. In other cases, dividend should be paid within timeline.
- If the Company has already obtained permission from relevant authorities as per Section 96 of the Companies Act, 2013, the companies are allowed to conduct AGM at Registered Office or any other place, as decided, in presence of some members and also with providing facility of VC/OAVM. Members physically present in the meeting and through electronic means, should be counted for quorum under Section 103 of the Act.
- B) For Companies which are not required to provide e-voting facilities:
- Companies having email addresses of at least 50% of its shareholders on its record.
- Companies should take all possible steps to register email addresses, whose email address is not registered on the Company’s records.
- MCA Circulars for EGM should be applicable mutatis mutandis for conducting meeting through VC and dispatch of notice.
- Financial statements, auditor’s report and/or any other documents shall be sent only by email. Physical dispatch of above documents is not required.
- Due to non-availability of bank account of shareholders, the company should dispatch dividend warrant/cheque to shareholders by post, upon normalisation of postal services.
The companies referred above, shall ensure that all other compliances associated with 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 through electronic mode.
The companies which are not covered by the General Circular No. 18/2020, dated 21.04.2020 and are unable to conduct their AGM in accordance with the frame provided in this Circular 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.
Attached herewith the MCA Circular dated 05.05.2020 for your quick reference