Companies Act Alert
Clarification on Passing Ordinary and Special Resolution by Companies
Ministry of Corporate affairs vide its General Circular No. 14/2020 dated 8th April, 2020 has clarified the mode of conducting of general meetings for Companies in the era of outbreak of Coronavirus. By this circular companies can take urgent decisions without convening a general meeting and ratify them through e-voting process. This circular is applicable to all type of companies.
Type of Meeting
This circular is applicable only for Extra ordinary general meeting (EGM) held on or before 30th June, 2020.
Conditions for Above Facilities
- Allowed in case of when passing of resolution in EGM is unavoidable or urgent.
- When passing of resolution through Postal Ballot is not feasible.
Note: If any resolution is passed, for which company is required to file FORM MGT-14, then it can be filed within 60 days of passing such resolution instead of 30 days along with the declaration that provisions of the circular and rules are complied with.
Manner of Mode of Issues of Notice to the Members Before Convening the General Meeting
For Companies which are required to provide the facility of e-voting under the Act, or any other company which has opted such facility-
- Notice to members may be given only through emails registered with the company or with the depository participants.
- While publishing public notice as required the following matters shall be stated, namely-
- A statement that the EGM has been convened through Video Call (VC) or other audio-visual means (OAVM).
- The date and time of EGM through VC or OAVM.
- Availability of notice of the meeting on the website of the Company and Stock Exchange.
- Attendance of members through VC and OAVM shall be counted for the purpose of reckoning the quorum under section 103 of the Act.
- The facility for appointment of proxy would not be available for such meetings.
- EGM’s where unavoidable, may be held through VC and OAVM and the recorded transcript of the same shall be maintained by the company in safe custody.
- Members who are participating in meeting are allowed to pose questions.
- Care must be taken to ensure that such meeting through VC and OAVM facility allow two-way teleconferencing for the ease of participation of the members.
The facility for joining the meeting shall be kept open at least 15 minutes before the time to scheduled to start the meeting and shall be closed till the expiry of 15 minutes after such scheduled time.
Voting Facility
- In case companies listed on stock exchange or having atleast 1000 members, remote evoting shall be provided which shall be provided which shall remain open not less that 3 days and shall close at 5.00 p.m. on the date preceding the date of the general meeting.
- In case companies not listed on stock exchange or having less than 1000 members, the evoting shall be taken through registered e-mail from members on designated mail id of the company.
- Where there is less than 50 members present at the meeting, the voting may be conducted either-
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- Through e voting
- By show of hands
- Unless a demand for poll is made in accordance with section 109 of the Act, in which case the voting shall be conducted through e-voting system.
- In all other case, voting shall be conducted through e-voting system.
- The meeting shall be chaired by person as specified in AOA.
- If AOA doesn’t provide the same and members present at meeting are or more, the chairman shall be elected by taking poll.
- If members are less than 50, the chairman shall be elected by show of hands.
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