06 July 2024
In 2020, due to the COVID-19 pandemic, several regulatory relaxations and amendments were introduced to facilitate easier compliance for private companies regarding board meetings. Here are the key changes and considerations:
1. **Virtual Meetings Allowed:** - The Ministry of Corporate Affairs (MCA) allowed companies to conduct board meetings through video conferencing or other audio-visual means. This was a significant relaxation considering the restrictions on physical gatherings due to the pandemic. - Companies were permitted to hold all types of meetings (including board meetings) through virtual mode, ensuring compliance with social distancing norms and travel restrictions.
2. **Relaxed Notice Periods:** - The notice period for convening board meetings was reduced. Typically, a shorter notice period (less than the usual 7 days) was allowed in certain circumstances to enable prompt decision-making during emergencies.
3. **Flexibility in Quorum Requirements:** - Quorum requirements for board meetings were relaxed to facilitate easier convening of meetings, especially when physical attendance was challenging.
4. **Adaptations to Electronic Processes:** - Companies were encouraged to use electronic means for circulation, signing, and maintenance of minutes of meetings, reducing the dependency on physical paperwork.
5. **Continued Compliance with Statutory Requirements:** - While virtual meetings were allowed, companies were required to ensure compliance with all statutory requirements regarding notice periods, quorum, recording of minutes, and resolutions passed during the meetings.
Regarding the question of whether it is mandatory to hold virtual meetings, during the pandemic, virtual meetings were strongly recommended and widely accepted as a safe alternative to physical meetings. However, the requirement to hold virtual meetings was more about practicality and compliance with health guidelines rather than a mandatory legal requirement in all circumstances.
It's advisable to check the latest guidelines issued by the Ministry of Corporate Affairs or consult with a corporate lawyer to understand the current regulations and any specific requirements that may apply to your private company regarding board meetings and virtual participation.
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