On account of the ongoing nation-wide lockdown and social distancing due to COVID 19, MCA vide its Circular No. 14/2020 dated 08/04/2020 has issued a clarification on passing of ordinary and special resolutions (except items of ordinary business and items where any person has a right to be heard) by companies of urgent nature by conducting EGM through Video Conferencing (VC) or other audio visual means (OAVM) on or before 30/06/2020.

For companies which are required to provide the facility of e-voting under the Act, or any other company which has opted for such facility –

• Facility used for conducting EGM must have a capacity to allow at least 1000 members to participate on a first-come-first-served basis. However, the large shareholders (i.e. shareholders holding 2% or more shareholding), promoters, institutional investors, directors, KMP, the chairpersons of the Committees, auditors, etc. may be allowed to attend the meeting without restriction on account of First-come-­first-served principle.
• Before the actual date of the meeting, the facility of remote e-voting shall be provided.
• Only those members, who are present in the meeting and have not cast their vote 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.

For companies which are not required to provide the facility of E-voting under the Act ‑

• Facility used for conducting EGM must have a capacity to allow at least 500 members to participate on a first-come-first-served basis. However, the large shareholders (i.e. shareholders holding 2% or more shareholding), promoters, institutional investors, directors, KMP, the chairpersons of the Committees, auditors, etc. may be allowed to attend the meeting without restriction on account of First-come-­first-served principle.
• The company shall provide a designated email address to all members at the time of sending the notice of meeting.
• Where a poll on any item is required, the members shall cast their vote only by sending emails through their email addresses which 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.

Common Points –

• All companies using this option are required to maintain a recorded transcript of the entire proceedings and keep in safe custody, and public companies are also required to host this transcript on their website.
• 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.
• Attendance of members through VC or OAVM shall be counted for the purpose of quorum.
• Where there are less than 50 members present at the meeting, the voting may be conducted either through the e-voting system or by a show of hands. If poll is demanded, then the voting shall be conducted through the e-voting system. Otherwise, the voting shall be conducted through e-voting.
• The facility for appointment of proxies has been dispensed with, while representatives of bodies corporate will continue to get appointed for participation in such meetings.
• At least one independent director (where the company is required to appoint one), and the auditor or his authorized representative auditor shall attend such meeting through VC or OAVM.
• The notice for the general meeting shall make disclosures with regard to the manner in which framework provided in this Circular and also contain clear instructions on how to access and participate in the meeting. A copy of the same shall also be prominently displayed on the website and due intimation may be made to the exchanges in case of a listed company.
• The company shall also provide a heIp-line number through the registrar & transfer agent, technology provider, or otherwise, for those shareholders who need assistance with using the technology before or during the meeting.
• In case a notice for meeting has been served prior to the date of this Circular, the framework proposed in this Circular may be adopted for the meeting, however consent from members to be obtained as per section 101(1) of the Act, and a fresh notice of shorter duration with due disclosures in consonance with this Circular is issued consequently.
• The Companies shall ensure that all other compliances associated with general meetings viz making of disclosures, inspection of related documents by members, or authorizations for voting by bodies corporate etc. as provided in the Act and the articles of association of the company are made through electronic mode.

All resolutions passed 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 herein along with other provisions of the Act and rules were duly complied with.

The said Circular can be accessed through the following link: MCA_Circular 14_08.04.2020_Clarification on holding EGM