Now Extraordinary Meetings can be done online

To

All Regional Directors,

All Registrar of Companies,

All Stakeholders.

Subject: Clarification on the 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.

Sir/Madam,

Several representations have been received in the Ministry for providing relaxations in the provisions of the Companies Act, 2013 (The Act) or rules made thereunder to allow companies to pass ordinary and special resolutions of urgent nature, in view of the difficulties faced by the stakeholders on account of the threat posed by COVID-19. The issues raised in the said representations have been examined considering the overall situation at present.

2. The act does not contain any specific provision for allowing the conduct of members’ meetings through video conferencing (VC) or other audiovisual means (OAVM). It has been noted that section 108 of the Act and rules made thereunder provide for relevant companies to allow e-voting (including remote e-voting) in case of general meetings convened by them. Section 110 of the Act, on the other hand, allows the companies to pass resolutions (except items of ordinary business and items where any person has a right to be heard) through postal ballot (which includes the electronic ballot and electronic voting under section 108). In view of the current extraordinary circumstances due to the pandemic caused by the COVID-19 prevailing in the country, requiring social distancing, companies are requested to take all decisions of urgent nature requiring the approval of members, other than items of ordinary business or business where any person has a right to be heard, through the mechanism of postal ballot/e-voting in accordance with the provisions of the Act or rules made thereunder, without holding a general meeting, which requires physical presence of members at a common venue.

3. However, in case holding of extraordinary general meeting (EGM) by any company is considered unavoidable, the following procedure needs to be adopted for conducting such a meeting on or before 30.06.2020, in addition to any other requirement provided in the Act or rules made thereunder.

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