The Ministry of Corporate Affairs with reference to general circular passed on 08.04.2020 “clarification on passing of ordinary and special resolution by companies under the Companies Act 2013 and Rules made thereunder on account of the threat posed by COVID-19″ and in response to the complaints received by the Ministry, it has issued another circular on 13.04.2020 for further clarity on the guidelines that must be followed by the companies while conducting Extra Ordinary Meeting (EGM) amid the lockdown are as follows:

Manner and mode of issuance of notices to the members before convening the general meetings:

  1. 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:
  • In consideration of the current scenario and in accordance to the proviso under rule 18 of Companies (Management and Administration) Rules, 2014(the rules), the notice to the members will be given through email registered with the company or with depository participant or depository.
  • The notice required under rule 20(4) (v) of the rules shall contain the information that EGM is conducted vide video conferencing or other audio-visual means with the date and time of the EGM. Further the notice is to be uploaded on companies’ website and the stock exchange. Those members who are holding shares in physical form or whose email is not registered with the company can cast their vote vide remote e-voting during the meeting. The notice should prescribe the procedure for registering the email of those members who are not yet registered with the company and other necessary details.
  • The Chairman of the meeting is obliged to ensure that all the necessary steps for conducting the meeting have been made and that the members are able to participate and vote in the meeting.
  1. For Companies which are not required to provide the facility of e-voting under the Act:
  • The notice to the members must be given as per the provisions of rule 18 of Companies Act 2013, 2014 (the rules) on the emails registered with the company or with the depository or depository participants.
  • The notice is to be displayed on the website (if any) of the company.
  • To ensure that all the members are aware of the general meeting conducted with compliance to the circular dated 08.04.2020, the company must contact all the members whose emails are not registered vide telephone or any other communication mode for registration of email before sending the notice. Further, if details of such members are not available with the company then a public notice by way advertisement to be published in one of the vernacular newspapers in vernacular language of the district of registered office and in English language.
  • The public notice published should inform that a general meeting in compliance with circular dated 08.04.2020 is being conducted at least 3 days from the date of the publication of the notice. And calling for details of email address along with the telephone number of the members for registering the same for their participation and voting in the general meeting.
  • The Chairman of the meeting will be under the obligation to ensure that all the arrangements for the meeting has been complied with.

Requirement for voting by show of hands:

  • The sub-para A-IX of para 3 of circular dated 08.04.2020 enables relevant companies to pass resolutions in certain cases through show of hands. The Chairman present shall ensure that the facility of e-voting system is available for voting during the meeting vide video conferencing or other audio-visual means.

Passing of certain matters only through postal ballot without convening a general meeting:

  • The ministry clarifies that in respect to passing of resolution vide postal ballot/e voting without holding a general meeting as per section 110(1) (b) mentioned in the circular dated 08.04.2020 rule 20 regarding the voting by electronic means would be applicable as far as possible.
  • The company have to send notice through email to all its shareholders on their registered email address informing them that the dissent and assent of the members will be taken vide e-voting system only.

Sending of emails by members, where a poll on any item is required for companies covered in para 3-B of general circular dated 08.04.2020:

  • The Ministry clarifies that the circular dated 08.04.2020 does not provide polling by members at any time before the general meeting. The poll should take place during the meeting and the assent/dissent of the members would be conveyed during the item in consideration by sending emails on the designated email address of the company.

The ministry has initiated this step so that the company’s business continues and is not affected by the lockdown amid COVID-19.

Order:MCA EGM Circular17_