Companies registered under Companies Act, 1956 or Companies Act, 2013 ('Companies') can now conduct their annual general meeting through Video Conferencing ('VC') or other Audio-Visual Modes (OAVM) till September 30, 2023. Ministry of Corporate Affairs ('MCA') vide its circular dt: December 28, 2022 has granted an extension to its earlier circular dt: May 5, 2022, vide which Companies were allowed to conduct AGM through VC or OAVM mode till December 31, 2022.
It needs to be highlighted here that Companies can conduct AGM through VC or OAVM mode only in compliance with provisions mentioned under MCA circular dt: May 5, 2020 read with April 8, 2020 and April 13, 2020.
MCA vide it's circular dt: May 5, 2020 had allowed Companies to conduct AGM through VC or OAVM mode. It also prescribed provisions that needs to be followed for conducting AGM through VC or OAVM mode. This was due to onslaught of COVID-19. Under this circular MCA allowed Companies to conduct AGM through VC or OAVM mode till December 31, 2020.
Further, citing COVID-19 concerns MCA time and again, vide various extension to circular dt: January 13, 2021, and December 14, 2021 allowed Companies to conduct AGM through VC or OAVM mode till certain time period. Vide its last circular dt: May 5, 2022 MCA allowed Companies to conduct AGM through VC or OAVM mode till December 31, 2022.
Also, it needs to be highlighted that MCA wants to incorporate provision for conducting AGM through VC or OAVM mode to be incorporated under Companies Act 2013. Report of Company Law Committee, March 2022 at Point 8.5 inter-alia recommended for incorporating provision for conducting AGM through VC or OAVM mode or hybrid mode in Companies Act 2013. So, it needs to be seen whether MCA continues giving extension to MCA circular May 5, 2020 for conducting AGM through VC or OAVM mode till recommendations of Company Law Committee Report and consequent amendment to Companies Act, 2013 is approved by legislature.
Citing COVID-19 and MCA circulars, allowing Companies to conduct AGM through VC or OAVM mode, SEBI had been granting relaxations in compliance with certain provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 ('LODR'). SEBI vide it's circular dt: May 13, 2022 and May 16, 2022 granted relaxation with certain provisions of LODR. These relaxations granted by SEBI will be expiring on December 31, 2022. So now it needs to be seen if SEBI further grants relaxation for compliance with certain provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015.
It needs to be deliberated whether companies who had already sent AGM or EGM or postal ballot notices in December first week for conducting AGM or EGM in physical mode, assuming that relaxations allowed May 5, 2020 and April 8, 2002 read with April 13, 2020 would not be continued, can these companies conduct meetings now through VC or OAVM mode as now MCA has now further extended relaxations given earlier?
Disclaimer: This article provides general information existing at the time of preparation and we take no responsibility to update it with the subsequent changes in the law. The article is intended as a news update and Affluence Advisory neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this article. It is recommended that professional advice be taken based on specific facts and circumstances. This article does not substitute the need to refer to the original pronouncement
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