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Apr 9, 2020

FAQs on holding Extra-ordinary General Meeting through video conferencing (VC) or other audio visual means (OAVM)

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Due to COVID-19 pandemic, MCA vide its Circular dated 08th April, 2020, has issued procedural guidelines in respect of conduct of extra ordinary general meetings through video conferencing (VC) or other audio visual means (OAVM) on or before 30th September, 2020.

While Circular dated 08th April, 2020 came as a welcome relief but it failed to address an important issue i.e. with respect to issue of notice to members whose email id is not available. After receiving several representation, MCA vide Circular No. 17/2020 dated April 13, 2020 has allowed sending of notices through email to members whose email id is available along with certain other measures.

The guidelines issued by MCA through various circulars is presented in form of FAQ’s below:

  For companies which are required to provide the facility of e-voting or any other company which has opted for such facility For companies which are not required to provide the facility of e-voting
Whether a company can hold its EGM through VC/OAVM? EGMs, may be held through VC or OAVM and the recorded transcript of the same shall be maintained in safe custody by the company.
Whether the recorded transcript should be available on the website of company? In case of a public company, the recorded transcript of the meeting, shall as soon as possible, be also made available on the website (if any) of the company.
What should be kept in mind before scheduling the meeting? Convenience of different persons positioned in different time zones shall be kept in mind before scheduling the meeting.
What facilities should be provided through VC or OAVM?
  • To ensure that such meeting allows two way teleconferencing or webex for the ease of participation of the members; and
  • The participants are allowed to pose questions concurrently or given time submit questions in advance on the e-mail address of the company.
What should be the capacity to avail such facilities? Such facility must have a capacity to allow at least 1000 members to participate on a first-come-first-served basis. Such facility must have a capacity to allow at least 500 members or members equal to the total number of members of the company (whichever is lower) to participate on a first-come-first-served basis.
How notice for such meetings will be sent?
  • Notice to members can be sent through email, where the same is available.
  • In respect of members, whose email id is are not available, in the advertisement to be published in respect of e-voting , following additional disclosures shall be made
    1. a statement that the EGM through VC or OAVM has been convened in compliance with applicable provisions of the Act read with General Circular 14/2020, dated 8th April, 2020 and Circular No. 17/2020 dated April 13, 2020;
    2. the date and time of the EGM through VC or OAVM;
    3. availability of notice under section 101 on the website of the company and the stock exchange;
    4. the manner in which the members who have not registered their email addresses with the company can get the same registered immediately for casting their vote through remote e-voting or through the e-voting system during the meeting;
    5. any other detail considered necessary by the company.

Further the Chairman of the meeting shall satisfy himself and cause to record the same before considering the business in the meeting that all efforts feasible under the circumstances have indeed been made by the company to enable to participate and vote on the items being considered in the meeting
  • Notice to members can be sent through email , where the same is available.
  • A copy of the notice shall also be prominently displayed on the website, if any, of the company.
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  • The company contact all those members whose e-mail addresses are not registered with the company over telephone or any other mode of communication for registration of their e-mail addresses before sending the notice for meeting to all its members; or
  •  where the contact details of any of members are not available with the company or could not be obtained, it shall cause a public notice by way of advertisement to be published immediately at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated and having a wide circulation in that district, and at least once in English language in an English newspaper having a wide circulation in that district and specifying in the advertisement the following information:-.
  • That the company intends to convene a general meeting in compliance with applicable provisions of the Act read with the General Circular No. 14/2020, dated 8th April, 2020 and Circular No. 17/2020 dated April 13, 2020 , and for the said purpose it proposes to send notice to all its members by e-mail after, at least, 3 days from the date of publication of the public notice;

 

  • the details of the e-mail address along with a telephone number on which the members may contact for getting their e-mail addresses registered for participation and voting in the general meeting.

Further the Chairman of the meeting shall satisfy himself and cause to record the same before considering the business in the meeting that all efforts feasible under the circumstances have indeed been made by the company to enable  to participate and vote on the items being considered in the meeting
 
What will be the place of meeting convened through VC or OVAM? There will be no place of meeting, since all the participants will be joining the meeting through VC or OVAM
Is there any exclusions from first-come-first-served principle? The following persons are excluded from first-come-first-served principle:

  1. Large shareholders (i.e. shareholders holding 2% or more shareholding);
  2. Promoters;
  3. Institutional Investors;
  4. Directors;
  5. Key Managerial Personnel;
  6. The Chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee;
  7. Auditors etc.
Upto what time members can join the meeting? The facility for joining the meeting shall be kept open at least 15 minutes before the time scheduled to start the meeting and shall not be closed till the expiry of 15 minutes after such scheduled time.
How attendance of genuine members can be ensured? Companies should try to avail VC or OAVM facilities which provide unique password to each member for joining the meeting. In case of closely held companies, common password can be adopted, since all the members are known.
How to reckon the quorum of general meeting? Attendance of members through VC or OAVM shall be counted for the purpose of reckoning the quorum under section 103 of the Act.
How voting will be done?
  • Before the actual date of the meeting, the facility of remote e-voting shall be provided in accordance with the Act and the rules.
  • During the meeting, voting shall be through e-voting
  • During the meeting
    • If number of present is less than 50, then by way of show of hands unless poll is demanded
    • In all other cases, by poll.
How poll will be undertaken at the meeting Through e-voting
  • Poll will take place by way of email.
  • The company shall provide a designated email address to all members at the time of sending the notice of meeting;
  • The confidentiality of the password and other privacy issues associated with the designated email address shall be strictly maintained by the company at all times;
  • Due safeguards with regard to authenticity of email address(es) and other details of the members shall also be taken by the company;
  • During the meeting, where a poll on any item is required, the members shall cast their vote on the resolutions only by sending emails through their email addresses whish are registered with the company. The said emails shall only be sent to the designated email address circulated by the company in advance;
  • In case the counting of votes requires time, the said meeting may be adjourned and called later to declare the result.
Whether ballot paper is required to be provided? No, since e-voting will take place in meeting, in case poll is required While the poll is being conducted through email but to avoid any confusion, ballot paper shall be provided to the shareholders.
The Chairman shall regulate the process of poll through email
Whether in case of poll through email, procedure prescribed in Section 109 read with Rules to be followed? N.A.
  • The Circular mentions that poll can be demanded in accordance with Section 109 but prescribes a new method for conducting the same.
  • So, provisions of Section 109 read with rules, so far as they provide for procedural requirement shall not apply
  • But where there are large number of members, Chairman should ensure transparency of the entire process and appoint a scrutinizer to monitor and submit its report on the voting 
Whether in case of poll by email , assent or dissent can be sent in advance? N.A. No, the same have to be sent during the course of the meeting, if poll by email is undertaken.
Who can vote at the meeting Only those members, who are present in the meeting through VC or OAVM and have not cast their vote on resolutions through remote e-voting and are otherwise not barred from doing so, shall be allowed to vote through e-voting system or by a show of hands in the meeting. All members who have joined the meeting through VC or OVAM
Whether we need to publish advertisement for e-voting All formalities for conducting e-voting as provided in Section 108 read with rules is required to be undertaken. NA
How to appoint Chairperson of the meeting? Chairperson shall be as per AOA. If such Chairperson is not available the Chairperson for the meeting shall be appointed in the following manner:

  • Where there are less than 50 members present at the meeting, the Chairperson shall be appointed in accordance with Section 104 of the Act;
  • In all other cases, the Chairperson shall be appointed by a e-voting.
 Chairperson shall be as per AOA. If such Chairperson is not available the Chairperson for the meeting shall be appointed in the following manner:

  • Where there are less than 50 members present at the meeting, the Chairperson shall be appointed in accordance with Section 104 of the Act;
  • In all other cases, the Chairperson shall be appointed by poll through email.
Whether a person can appoint his proxy for such meetings? The facility of appointment of proxies by members will not be available for such meeting.
Whether a person can be appointed as a representative of body corporates etc.? In pursuance of sections 112 and 113 of the Act, representatives of the members may be appointed for the purpose of voting through remote e-voting or for participation and voting in the meeting held through VC or OAVM.\
Such authorization if not already provided, can be shared with the Company through electronic mode
Is it require mandatory to attend the meeting by independent director and the auditor? At least one independent director (where the company is required to appoint), and the auditor or his authorized representative, who is qualified to be the auditor shall attend such meeting through VC or OAVM.
Is it require mandatory to attend the meeting by institutional investors? Where institutional investors are members of a company, they must be encouraged to attend and vote in the meeting through VC or OAVM.
What is the due care in the notice of general meeting? The following things shall be mentioned in the notice of general meeting:

  • Disclosures with regard to the manner in which framework provided in the Circular;
  • Clear instructions on how to access and participate in the meeting;
  • Provide a helpline number through the RTA, technology provider, or otherwise, for those shareholders who need assistance with using the technology before or during the meeting.
  • Inspection of documents mentioned in notice, shall be provided through electronic means.

A copy of the notice shall also be prominently displayed on the website of the company and due intimation may be made to the stock exchanges in case of a listed company.
What company have to do, if a company has already issued the notice of EGM before MCA Circular? In case a notice for meeting has been served prior to the date of MCA Circular (i.e. 08th April, 2020), the framework proposed in the Circular may be adopted for the meeting, by sending a fresh notice of shorter duration with due disclosures in consonance with the Circular subject to receipt of shorter consent in accordance with Section 101(1) of the Act.
Listed Companies, who have already sent the notice of EGM, can’t avail the facility provided in the Circular
Whether the resolution passed in the meeting needs to be filed with the Registrar? All resolutions passed (whether ordinary or special) in accordance with this mechanism shall be filed with the Registrar of Companies within 60 days of the meeting, clearly indicating therein that the mechanism provided in the MCA Circular dated 08th April, 2020 alongwith other provisions of the Act and rules were duly complied with during such meeting.

Click here to view following:

Circular No 14/2020
Circular No. 17/2020

For any clarification or query, please contact the following

Mr. Ankit Singhi

Mr. Nitesh Latwal

E: ankit@indiacp.com
M: +91 9910888952

E: nitesh@indiacp.com
M: +91 9910888952

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