During COVID-19, practice of holding Annual General Meeting through Video Conferencing or Other Audio Visual Means (OAVM) became most common. However, what about today, when the pandemic is over and there is no restriction of movement of people? Are the companies still eligible to hold AGM or other meetings through Video Conferencing or OAVM?
Companies Act does not have any specific provisions related to holding shareholders’ meetings through video conferencing or audio visual mode. During COVID-19, MCA allowed holding of AGM or EGM through video conferencing of other audio visual means through Circular No. 14/2020 dated 8th April, 2020 and Circular No. 20/2020 dated 5th May, 2020.
This relaxation has been further extended from time to time through various circular. Latest, as per Circular 11/2022 dated 28th December, 2022, MCA has extended this relaxation till 30th September, 2023. Therefore, Companies are allowed to hold AGM and EGM through VC or OAVM till 30th September, 2023.
However, the Company is required to comply with the process and conditions given under the circular. This article will throw light on the process of conducting AGM or EGM through video conferencing:
1. Types of shareholders’ meeting
There are three types of shareholders’ meeting:
- Annual General Meeting (AGM)
- Extraordinary General Meeting (EGM)
- Class meeting
AGM is an annual affair in order to have interaction between management, board of directors and shareholders to learn about past performances and strategies for future. This meeting gives an opportunity to present audited financial statements, appoint auditors and directors, declare dividend and discuss other matters known as special business.
EGM is a meeting conducted between the period of two AGMs to transact any urgent businesses like removal of auditor or director, etc. All business transacted at an EGM are special business.
Class meeting is specific for one class of members. Only members of that class can attend such meetings and speak as well as vote thereat, e.g. meetings of preference shareholders. Such meetings are required to be convened when it is proposed to vary the rights of the holders of a particular class of shares.
We are discussing AGM and EGM which are more popularly held by the majority of companies.
2. Companies allowed to conduct shareholders’ meet through video conferencing or OAVM
Extraordinary General Meeting (EGM):
- As per Circular No. 14/2020 dated 8th April, 2020, all companies (including unlisted companies) are allowed to conduct EGM through video conferencing for any unavoidable matters
Annual General Meeting (AGM):
- All companies who are required to provide facility of e-voting under Companies Act or any other company who has opted for it, can conduct AGM through VC or OAVM.
- However, other companies, i.e., which have not provided facilities for e-voting, can hold AGM through VC or OAVM only if it has the email address of atleast 50% of the total members:
- In case of Nidhi Company, who hold shares of more than INR 1000 in face value or more than 1% of total paid-up share capital, whichever is less;
- In case of other companies having share capital, who represents atleast 75% of such part of the paid-up share capital of the company as gives a right to vote at the meeting;
- In case of companies not having share capital, who have the right to exercise atleast 75% of the total voting power exercisable at the meeting.
3. Guidelines for conducting AGM or EGM via video conferencing
While conducting shareholders’ meet via video conferencing, following guidelines should be adhered to:
- Before scheduling the meet, convenience of different persons positioned in different time zones should be considered.
- Proper video conferencing equipment or facilities should be there for providing transmission of the communications for effective participation of members.
- The facility of joining video conferencing meetings should be kept open at least 15 minutes before the meeting and should not be closed till the expiry of 15 minutes after the meeting.
- It should be ensured that no person other than the concerned member is attending or have access to the proceedings of the AGM or EGM through video conferencing mode or other audio visual means.
- Participants should be allowed to raise questions concurrently or given sufficient time to submit their questions in advance on the e-mail id of the company.
- First come first serve basis principle should be followed at least for 1000 members except for large shareholders holding more than 2%, promoters, institutional investors, directors, key Managerial personnels etc.
- Once the meeting gets started, the chairman should be appointed by show of hands or through a poll in case the number of members are less than 50. Where the number of members are greater than 50, appointments should be through poll or poll through e-voting system, as the case may be.
- There is no requirement of appointment of proxies since members are not required to attend the meeting physically. However, representatives of body corporates are allowed to attend meetings.
- Auditors and at least one independent director, where the company is required to appoint, should attend AGM or EGM. Institutional investors should be encouraged to attend and vote at AGM or EGM.
- Recorded transcript of the AGM or EGM should be maintained in safe custody by the company. In case of a public company, the recorded transcript should also be made available on its website.
4. Notice for shareholders’ meet via video conferencing
A general meeting be it AGM or EGM can be called by giving clear 21 days’ notice to members and other stakeholders like auditors, directors, debenture trustee, etc. through e-mails registered with company or depository participants.
The notice shall state the following:
- Date and time of meeting;
- Items of business to be transacted with resolution for special businesses;
- Manner in which framework provided for conducting AGM or EGM through video conferencing will be available for use by members;
- Instructions for accessing and participating in meeting;
- Helpline number for assistance of members;
The notice of the AGM should be placed on the website of the company and should be sent to stock exchanges in case of a listed company.
5. Manner of Sending Notice about shareholders’ meet via video conferencing
a. Companies which are required to provide e-voting facility or have already opted for it:
- Companies may send notices through e-mail addresses registered with the company or with depository participants.
- However, while publishing public notice under Rule 20(4)(v) of Rules, the following matters shall also be stated:
- A statement that the EGM has been convened through VC or OAVM in compliance with applicable provisions.
- the dale and lime of the EGM through VC or OAVM;
- availability of notice of the meeting on the website of the company and the stock exchange.
- the manner in which the members, who are holding physical shares or whole email addresses are not available with company, can cast their vote through remote e-voting or through the e-voting system during the meeting;
- How members can get their email address registered with the company, if not done so far;
b. Companies which are not required to provide e-voting facility or have already opted for it:
- Notice of the meeting will be given only through email address registered with the company or with the depositor.
- A copy of the notice shall also be prominently displayed on the website, if any.
- To make sure that all members are aware that a general meeting is proposed to be conducted, the company shall:
- contact all those members whose e-mail addresses are not registered over telephone or any other mode of communication for registration of their e-mail addresses before sending the notice for meeting to all its members; or
- In case contact details are not available, the company shall issue a public notice through advertisement in at least once newspaper in the vernacular language and one newspaper in English language in which the registered office of the company is situated, preferably both newspapers having electronic editions. The notice shall contain the following information
6. Quorum of shareholders’ meet via video conferencing
Minimum number of members required to present at AGM or EGM conducted through video conferencing is:
| Type of company | Minimum members |
| Private company | 2 members |
| Public company with members upto 1000 | 5 members |
| Public company with members greater than 1000 but not more than 5000 | 15 members |
| Public company with members exceeding 5000 | 30 members |
Any member attending a meeting through video conferencing will be counted for the purpose of quorum for AGM or EGM. In case the quorum for the meeting is not present within half an hour from the scheduled time, the meeting will be adjourned to the same day in the next week for the same time and at the same place.
7. Voting mechanism in shareholders’ meet via video conferencing
a. Companies which are required to provide e-voting facility or have already opted for it:
Only those members, who are present in the meeting through VC or OAVM facility and are not barred from e-voting, shall be allowed to vote through e-voting system or by a show of hands in the meeting.
b. Companies which are not required to provide e-voting facility or have already opted for it:
- During the meeting held through VC or OAVM facility, the members shall cast their vote only by sending emails through their email addresses which are registered with the company. Such emails shall only be sent to the designated email address circulated by the company.
- In case less than 50 members are present in a meeting, the Chairman may decide to conduct a vote by show of hands, unless a demand for poll is made by any member.
- In case the counting of votes requires lime, the said meeting may be adjourned and called later to declare the result.
8. Post shareholders’ meeting via video conferencing compliance
All resolutions passed in AGM or EGM held through video conferencing shall be filed with the Registrar of Companies in Form MGT-14 within 60 days of the meeting, clearly indicating therein that the mechanism provided herein along with other provisions of the Act and rules were duly complied with during such meeting.
Within 30 days of conclusion of AGM or EGM held through video conferencing, minutes should be prepared which record summary of proceedings and resolutions passed.
