The Ministry of Corporate Affairs (MCA) in its vide General Circular issued on 8th April 2020 has clarified the status and issues related to the passing of resolutions either ordinary or special under the Companies Act, 2013. It has also provided various provisions related to the holding of Extraordinary General Meeting (EGM) in the company. As per the circular, the companies are now allowed to take all the urgent and important decisions that require proper approval of the members of the company through the system of postal ballot or e-voting facility without even holding an Extraordinary General Meeting (EGM) requiring the physical presence of the members.
This has also been noted that the circular does not state any specific provisions in the act about conducting the meeting of the members through Video Conferencing (VC) or Other Audio-Visual Means (OAVM).
As per the vide Circular of the MCA, it has prescribed the given procedure that all companies must adopt for holding an Extraordinary General Meeting (EGM) on or before the 30th of June 2020. The rules and provisions related to the same are as follows to all the registered companies must comply with-
- The Extraordinary General Meeting (EGM) must be held through the VC or OAVM. The transcript recorded for the same must be maintained by the company in safe custody. In case the company is a Public Limited Company, the transcript of the meeting must be made available on the company’s website as well.
- Before scheduling the meeting, the convenience of the all the different persons must be positioned as per the different time zones they are in.
- The facility must allow a two-way teleconferencing. The participants must be allowed to raise questions at concurrent time or they must be given time for submitting their doubts in advance on the company’s respective e-mail ID.
- The Extraordinary General Meeting (EGM) facility should have the capacity of allowing a minimum of 1000 members to participate simultaneously on the first come first basis. In the case of unlisted public companies this limit is at least 500 members.
- On account of a first come first served basis, it must not restrict the larger shareholders, directors, key managerial personnel, chairperson of the Audit Committee, investors, promoters, Remuneration Committee, and auditors, etc. in attending the meeting.
- The facility of joining the Extraordinary General Meeting (EGM) must be open to the members for at least 15 minutes before the actual scheduled time of the meeting.
- The attendance of members must be counted through such a facility for complying with Section 103 of the Companies Act, 2013.
- At least one independent director and the authorized representative or internal auditor must attend the Extraordinary Meeting through the VC facility.
- The facility for proxy member appointments must not be allowed in such meetings. However, for e-voting, such, members must be provided with a representative.
- The institutional investors who are also members of the company must be encouraged to attend the meeting for voting.
- The notice for the Extraordinary General Meeting (EGM) must have disclosures about the manner of the framework of the circular and the meeting for utilization by the members. It must also contain clear instructions about accessing and participating in the meeting.