Subject: Clarification on passing of ordinary and special resolutions by companies under the Companies Act, 2013 and rules made thereunder on account of the threat posed by Covid-19.
As we all are aware that there is no specific provision contained by the Act for allowing conduct of member's meetings through video conferencing (VC) or other audio-visual means (OAVM). Several representations have been made by the stakeholders to the Ministry to provide clarification on how to pass ordinary and special resolutions of urgent nature, The Ministry has examined and considered the issues raised by the stakeholders in the said representations and provide the following clarifications:
- To pass resolutions of urgent nature through postal ballot or e-voting without holding a general meeting.
- To hold EGM on or before 30.06.2020 through VC or OAVM, where extraordinary general meeting is unavoidable
A. 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.
B. For companies which are not required to provide the facility of e-voting under the Act.
CONDITIONS LAID BY THE CIRCULAR TO PASS RESOLUTION THROUGH POSTAL BALLOT OR E-VOTING OR TO HOLD EGM THROUGH VC OR OAVM:
1. TO PASS RESOLUTIONS OF URGENT NATURE THROUGH POSTAL BALLOT OR E-VOTING WITHOUT HOLDING A GENERAL MEETING:
i. Pass the resolutions of urgent nature which requires the approval of members through mechanism of postal ballot or e-voting .
ii. Other provisions of the Companies Act, 2013 and rules made thereunder should also be complied with.
Exclusions:
Ordinary Business or Business where any person has a right to be heard, can not be passed through postal ballot or e-voting with out holding a general meeting, which requires physical presence of members at a common venue.
2. TO HOLD EGM ON OR BEFORE 30.06.2020 THROUGH VIDEO CONFERENCING OR OTHER AUDIO-VISUAL MEANS WHERE EXTRAORDINARY GENERAL MEETING IS UNAVOIDABLE BY FOLLOWING THE BELOW MENTIONED PROCEDURE:
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S.No. |
Particulars |
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. |
For companies which are not required to provide the facility of e-voting under the Act. |
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1. |
EGM Mode |
Through Video Conferencing (VC) or Other Audio-Visual Means (OAVM) |
Through Video Conferencing (VC) or Other Audio-Visual Means (OAVM) |
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2. |
Persons in different time zones |
Convenience of different persons positioned in different time zones shall 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. |
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3. |
Recording of EGM |
To be kept safe by the company & Public Company shall made available on it's website, if any, asap. |
To be kept safe by the company & Public Company shall made available on it's website, if any, asap. |
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4. |
Two way Teleconfrencing or webex |
Participants should be allowed to pose questions concurrently or given time to submit questions in advance on email of the Company. |
Participants should be allowed to pose questions concurrently or given time to submit questions in advance on email of the Company. |
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5. |
Capacity of VC or OAVM facility |
Facility must allow at least 1000 members to participate on first come first-serve basis. |
Facility must allow atleast 500 members or members equal to the total number of members of the company, whichever is less, to participate on first come first-serve basis. |
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6. |
Participation may be allowed without restriction on account of first come-first serve basis |
i. Large Shareholders (shareholding 2% or more), promoters, institutional investors, directors, key managerial personnel, iii. the chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, auditors etc |
i. Large Shareholders (shareholding 2% or more), ii. promoters, institutional investors, directors, key managerial personnel, the chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, auditors etc |
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7. |
Facility window to join the meeting |
Facility window shall be kept open for at least 15 minutes before scheduled time. &shall not be closed till the expiry of 15 minutes after scheduled time. |
Facility window shall be kept open for at least 15 minutes before scheduled time& shall not be closed till the expiry of 15 minutes after scheduled time. |
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8. |
E-voting system |
Facility of remote e-voting shall be provided in accordance with the Act and the rules, before the actual date of the meeting. |
NA |
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9. |
If vote have not casted through remote e-voting |
Members who are present in the meeting through VC or OAVM and have not casted their vote through remote e-voting and not barred otherwise, shall be allowed to vote through e-voting or by show of hands in the meeting. |
NA |
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10. |
Attendance of Members |
shall be counted for ascertaining quorum under section 103 of the Act. |
shall be counted for ascertaining quorum under section 103 of the Act. |
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11. |
Chairman of the Meeting |
Chairman shall be appointed in following manner unless the articles of the company require any specific person to be appointed as chairman: a. If members present at meeting, less than 50, then shall be appointed in accordance with Section 104 of the Act b. In all other cases, shall be appointed by a poll through e-voting during the meeting. Chairman shall ensure that the facility of e-voting system is available for the purpose of conducting a poll during the meeting held through VC or OAVM. |
Chairman shall be appointed in following manner unless the articles of the company require any specific person to be appointed as chairman: a. If members present at meeting, less than 50, then shall be appointed in accordance with Section 104 of the Act b. In all other cases, shall be appointed by a poll through sending emails from registered email ids to the designated email id circulated by the company in advance. |
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12. |
Manner of Voting |
a. If less than 50 Members present, then either by e-voting or by show of hands. b. Through e-voting only, in case poll is asked or in any other cases. |
a. If Members present are less than 50 at the meeting by show of hands. b. If poll is asked on any item, then members shall send email from their registered email ids on the designated email id of the company. At the time of sending notice of the meeting the Company shall provide a designated email id duly safeguarded to all members. |
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13. |
Counting of Votes |
NA |
If counting of votes requires time, the said meeting may be adjourned and called later to declare the result. |
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14. |
Proxy |
Facility for appointment of proxies will not be available Since meeting is to held through VC or OAVM. However in pursuance of section 112 and 113 of the Act, representatives of the members may be appointed for remote e-voting or for participation and voting in the meeting held through VC or OAVM. |
Facility for appointment of proxies will not be available Since meeting is to held through VC or OAVM. However in pursuance of section 112 and 113 of the Act, representatives of the members may be appointed for remote e-voting or for participation and voting in the meeting held through VC or OAVM. |
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15. |
Mandatory Participations |
At least one Independent Director (if required to be appointed) and Auditor or his authorized representative, who is qualified to be auditor shall attend meeting through VC or OAVM. |
At least one Independent Director (if required to be appointed) and Auditor or his authorized representative, who is qualified to be auditor shall attend meeting through VC or OAVM. |
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16, |
Participation of Institutional Investors, if members of the company |
Should be encouraged to attend and vote in such meeting. |
Should be encouraged to attend and vote in such meeting. |
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17. |
Notice of General Meeting |
Notice of meeting shall contain: 1. Disclosures with regard to the manner provided in the circular 2. How to access and participate in the meeting Notice of meeting should be displayed on website of the company, and should be intimated to stock exchanges in case of listed company. |
Notice of meeting shall contain: 1. Disclosures with regard to the manner provided in the circular How to access and participate in the meeting Notice of meeting should be displayed on website of the company. |
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18. |
If notice of meeting issued prior to the date of this circular |
Then framework proposed in this circular may be adopted for the meeting. if consent in accordance with section 101(1) has been obtained from members then, fresh notice of shorter duration may also be issued. |
Then framework proposed in this circular may be adopted for the meeting. if consent in accordance with section 101(1) has been obtained from members then, fresh notice of shorter duration may also be issued. |
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19. |
Filing with Registrar of Companies |
Resolutions passed in accordance with this mechanism shall be filed with the Registrar of Companies with in 60 days of the meeting, And it should be clearly indicating that the mechanism provided in the circular along with other provisions of the Act and rules were duly complied with during such meeting. |
Resolutions passed in accordance with this mechanism shall be filed with the Registrar of Companies with in 60 days of the meeting, And it should be clearly indicating that the mechanism provided in the circular along with other provisions of the Act and rules were duly complied with during such meeting. |
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20. |
Helpline Number |
The company should also provide a helpline number through RTA, technology provider or otherwise for shareholders who need assistance. |
The company should also provide a helpline number through RTA, technology provider or otherwise for shareholders who need assistance. |
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21. |
Other Compliance |
The company shall ensure that all other compliances associated with the provisions relating to general meeting viz making of disclosures, inspection of related documents by members, or authorisations for voting by body corporate etc as provided in the Act and the articles of association of the company are made through electronic mode. |
The company shall ensure that all other compliances associated with the provisions relating to general meeting viz making of disclosures, inspection of related documents by members, or authorisations for voting by body corporate etc as provided in the Act and the articles of association of the company are made through electronic mode. |
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