AGM/EGM through Video Conferencing Extension
The utilization of video conferencing for Annual General Meetings (AGMs) gained significant traction amid the COVID-19 pandemic. With evolving circumstances, businesses are now inquiring about the feasibility of continuing this practice. A recent amendment by the Ministry, as outlined in General Circular No. 09/2023 brings forth a clarity on continuation of this practice of conducting the Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs) for companies under the Companies Act, 2013 through Video-Conference (VC) or Other Audio-Visual Means (OAVM).
One of the most impactful changes is the extension of the timeline for conducting AGMs through virtual means. According to the latest circular, companies with AGMs due in 2023 or 2024 are now allowed to conduct their meetings via video conferencing (VC) or other audio-visual means (AVM) until 30th September 2024. This move comes in alignment with the requirements specified in the General Circular No. 20/2020.
Clarification on Statutory Timelines
It’s essential to note that while the circular offers flexibility in the mode of conducting AGMs, it does not extend the statutory time for holding these meetings. Companies must adhere to the relevant statutory timelines stipulated in the Companies Act, 2013. Failure to comply may result in legal action under the appropriate provisions of the Act.
This clarification emphasizes the importance of balancing flexibility with adherence to legal obligations. While virtual meetings offer convenience, companies must ensure they remain compliant with the broader regulatory framework.
EGMs and Postal Ballots: A Continued Digital Journey
In a parallel development, the Ministry has extended the option for companies to conduct their EGMs through video conferencing (VC) or other Audio-Visual Means (OAVM) or transact items through postal ballot until 30th September 2024. This builds upon the framework established in General Circulars No. 14/2020, No. 03/2022, and No. 17/2022.
The decision recognizes the ongoing need for flexibility in conducting crucial business decisions, allowing companies to leverage digital platforms to ensure smooth proceedings.
The recent amendments reflect a progressive approach by the Ministry, acknowledging the dynamic nature of the corporate environment. By extending the scope of virtual meetings and maintaining flexibility in the conduct of EGMs, companies have more tools at their disposal to navigate the challenges posed by the evolving business landscape.
As we move forward, it will be interesting to observe how companies leverage these amendments to enhance efficiency, transparency, and overall corporate governance in the digital age.
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