MCA Notification on Holding Extraordinary General Meeting (EGM)
Updated: a day ago
MCA has issued Clarification on the passing of ordinary and special resolutions by companies on the account of the threat posed by Covid19 and holding an extraordinary general meeting.
Section 100 (1) of the Companies Act, 2013 (the Act), the Board may, whenever it deems fit, call an extraordinary general meeting (EGM) of the company. EGM of any company other than of the wholly-owned subsidiary of a company incorporated outside India shall be held at a place within India.
The Ministry of Corporate Affairs (the MCA) has issued two General Circulars No.14/2020 dated 8th April 2020 and 17/2020 dated 13th April 2020. The MCA has stated that due to the pandemic caused by COVID19 prevailing which requires social distancing, Companies are requested to take all decisions of urgent nature requiring the approval of members, other than items of ordinary business or business where any person has a right to be heard, through the mechanism of postal ballot e-voting following the provisions of the Act and rules made thereunder, without holding a general meeting, which requires the physical presence of members at a common venue.
Prescribed Procedures for holding an EGM
Under unavoidable circumstances, for holding an EGM by any company, the following prescribed procedure should be adopted for conducting EGM till 30.06.2020:
A. For Companies where e-voting is required/Companies opted for such facility:
VC/OAVM: The EGMs may be held through video conferencing (VC) or other audio-visual means (OAVM) and transcript of the same shall be kept in safe custody. In the case of a Public Company, the same shall be uploaded on the website as soon as possible.
Zones: Different time zones shall be kept in mind.
Deliberations: There should be two-way conferencing with the facility to pose questions and participation by at least 1000 members (in case e-voting is allowed) on a first-come-first-served basis. Besides this, the promoters, chairman of audit committee nomination and remuneration committee, stakeholders’ relationship committee institutional investors, directors, auditors should be allowed to join
Joining Time: The Facility for joining a meeting shall remain open for at least 15 minutes before and after the timing of the meeting.
E-Voting: Before the actual date of the meeting, the facility of remote e-voting shall be provided.
Chairman: To be appointed by the persons named in the articles. In other cases, if less than 50 members present, the Chairman shall be appointed as per the provisions of the Act, otherwise, Chairman shall be appointed by a poll.
Voting Facility: Chairman shall ensure that the facility of e-voting is available for conducting a poll at the meeting. In the case of fewer than 50 members by way of e-voting/ show of hands/ poll and other cases by way of e-voting.
Proxy: Facility for the appointment of proxies shall not be available.
Independent Director: At least one Independent Director (if any) and the auditor or his authorized representative shall attend the meeting.
Institutional Shareholders: Where institutional investors are members of a company, they should be encouraged to attend and vote.
Assistance: Notice shall provide clear instructions on how to participate in the meeting and also a helpline number be provided.
Resolutions: All resolutions passed shall be filed within 60 days of the meeting with requisite details.
Meetings: if prior scheduled, the framework as per this Circular may be adopted.
B. Companies where e-voting is not required:
Sr. No. (iii) as per ‘A’ above should be followed for 500 members.
In case a poll is required, a vote can be cast by sending an email on the designated email id sent in the notice.
Confidentiality of password and due safeguards concerning the authenticity of an email address shall be maintained.
Where less than 50 members are present, voting by show of hands can be conducted if not demanded by-poll.
The facility of remote e-voting shall not be required. If the counting of votes requires time, the meeting may be adjourned.
All other conditions remain the same as mentioned in ‘A’.
Amit Ajay Mutha is currently pursuing law at BVP New Law College.
They can be contacted at firstname.lastname@example.org
Edited By: Swathi. Ashok. Nair
DISCLAIMER BY LEGAL ARMOR
We at Legal Armor do not endorse the Authors' views and are in no way responsible for the said views. We are just publishing the Write-ups as blogs with just light editing, and are in no way responsible for any legal claims. Legal Armor shall not be liable for any plagiarized content.