By CA. Aakash Kalra And Rishabh Duhan - April 17, 2020
Clarification on passing of Ordinary and Special Resolutions by Companies under the Companies Act, 2013 on account of threat posed by Covid- 19.
Several representations received by Ministry for providing relaxation in passing Ordinary and special resolutions.
1. There is no specific provision in Companies Act, 2013 which allows for conduct of Shareholder’s meeting through Video Conferencing (VC) or other audio visual means (OAVM). With the outbreak of pandemic COVID-19 companies are permitted to take all decisions of urgent nature requiring approval of members through the mechanism of postal ballot/ e-voting in accordance with provisions of section 108/110 of the Act and rules made thereunder. However, items of ordinary business or business where any person has right to be heard are not covered in above.
2. Procedure to be followed for conduct of Extraordinary General Meeting (EGM) as per Section 100 of Companies Act, 2013 (the Act) on or before June 30, 2020 where delay cannot be made:
S. No. |
Particulars |
For Companies which are allowed to provide facility of e-voting under the Act or any other Company which has opted for such facility |
For Companies which are not required to provide the facility of e-voting under the Act |
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Mode of conducting EGM |
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2. |
Prerequisites |
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Kept open– atleast 15 minutes before time scheduled; and Shall remain open– till expiry of 15 minutes after scheduled time; |
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3. |
Quorum of the meeting |
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4. |
Notice of said General Meeting |
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5. |
Attendance |
Attendance shall be counted for reckoning quorum under Section 103 of the Act |
Attendance shall be counted for reckoning quorum under Section 103 of the Act |
6. |
Voting/ Poll |
Only present members who have not voted thorough remote e-voting can cast their vote through e-voting or by show of hands. |
Where a poll is required, members shall cast their vote only by sending emails through their registers e-mail addresses at designated e-mail addresses provided in the Notice |
7. |
Election of Chairman |
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8. |
Responsibilities of Chairman |
Ensure that facility of e-voting is available for conducting poll during such meeting |
NA, as there is no voting. |
9. |
Manner of conducting voting |
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10. |
Appointment of Proxy- Section 105 of the Act |
Not available for said meeting. However, Representatives of members may be appointed for voting through remote e-voting or for participation and voting in the meeting |
Not available for said meeting. However, Representatives of members may be appointed for voting through remote e-voting or for participation and voting in the meeting |
11. |
Independent Director |
Where Company is required to appoint Independent Directors, atleast one independent director shall attend. |
Where Company is required to appoint Independent Directors, atleast one independent director shall attend. |
12. |
Auditors |
Auditors or his authorized representatives shall attend said meeting |
Auditors or his authorized representatives shall attend said meeting |
13. |
Where Institutional Investors are the members |
They must be encouraged to attend and vote through VC or OAVM |
They must be encouraged to attend and vote through VC or OAVM |
14. |
Filing with Registrar of Companies |
All resolutions passed in said meeting shall be filed within 60 days of meeting clearly indicating that mechanism provided in this circular alongwith provision of Act were duly complied |
All resolutions passed in said meeting shall be filed within 60 days of meeting clearly indicating that mechanism provided in this circular alongwith provision of Act were duly complied |
We hope that above is useful and will enable easy conducting of meetings.
Please do contact us on case of queries or clarifications.
Regards,
TheTaxTellers Team