MCA Clarification On Holding Of Annual General Meeting (AGM) And EGM Through Video Conference (VC) Or Other Audio-Visual Means (OAVM)
In a significant development, the Ministry of Corporate Affairs has issued a clarification regarding the conduct of Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs) for companies operating under the Companies Act, 2013. The recent circular, in continuation of previous directives, grants companies the flexibility to hold their AGMs and EGMs through virtual modes, ensuring business continuity amidst ongoing uncertainties.
AGMs Through Virtual Platforms
As per the latest directive issued on October 9, 2023, companies whose AGMs are scheduled for the years 2023 or 2024 can opt to conduct their meetings virtually. This includes the use of video conferencing (VC) or other audio-visual means (OAVM). The deadline for conducting such virtual AGMs has been extended to September 30, 2024. This move comes as a response to the evolving business landscape and the need for companies to adapt to changing circumstances.
The requirements for conducting virtual AGMs are outlined in the General Circular No. 20/2020 dated 05.05.2020, particularly in para 3 and para 4. However, it is essential to note that this extension should not be misconstrued as an extension of the statutory timeframes for holding AGMs, and companies failing to adhere to statutory timelines may face legal action under the appropriate provisions of the Companies Act, 2013.
EGMs and Postal Ballots
In addition to the AGM clarification, the Ministry of Corporate Affairs also addressed the conduct of EGMs. Companies are now permitted to hold EGMs through video conferencing (VC) or other Audio-Visual Means (OAVM) and transact items through postal ballot until September 30, 2024. The framework for conducting these meetings and ballots remains in accordance with previous circulars, specifically General Circular No. 14/2020 dated 08.04.2020, General Circular No. 03/2022, and General Circular No. 17/2022 dated 28.07.2022.
This decision reflects the government's commitment to support businesses and facilitate their operations, even in challenging circumstances. The extension of virtual meeting options aligns with the changing dynamics of the corporate world, where remote work and digital communication have become integral parts of daily operations.
Companies are urged to carefully review the circulars and comply with the stated guidelines to ensure legal compliance and a smooth conduct of their AGMs and EGMs in the coming years. This move by the Ministry of Corporate Affairs demonstrates its responsiveness to the evolving needs of businesses and its commitment to fostering corporate governance and compliance in India's corporate sector.