PASSING OF RESOLUTIONS HAVING URGENT NATURE DURING LOCK DOWN PERIOD COVID-19

by Sagar Chauhan Digital Marketing Analyst

There is no specific provision under the Companies act 2013 for allowing conduct of member’s meetings through video conferencing (VC) or other audio-visual means (OAVM). Many of the stakeholders approached to the Ministry of Corporate Affairs, Government of India to provide clarification on how to pass ordinary and special resolutions of “urgent nature”. The Ministry having considered the concern of the stakeholders has issued circular vide no 14/2020 on 08^th April, 2020 for clarification on passing of ordinary and special resolutions having “urgent nature” by companies under the Companies Act, 2013 and rules made thereunder on account of the threat posed by Covid-19. Further to this another general circular vide no 17/2020 was issued on 13^th April, 2020 to clarify on manner and mode of issue of notices to the members before convening the general meeting. Accordingly, conditions laid by the circular(s) to pass resolution through postal ballot or e-voting or to hold EGM through VC or OAVM are stated in below paragraphs:

1. TO PASS RESOLUTIONS OF URGENT NATURE THROUGH POSTAL BALLOT OR E-VOTING WITHOUT HOLDING A GENERAL MEETING:

I. Pass resolutions of urgent nature in view of current extra-ordinary circumstances of COVID-19 requiring the approval of members through mechanism of postal ballot or e-voting. Herein the items of Ordinary Business or Business where any person has a right to be heard, cannot be passed through postal ballot or e-voting without holding a general meeting, which requires physical presence of members at a common venue.

II. Other provisions of the Companies Act, 2013 and rules made thereunder should also be complied with.

2. WHERE EXTRAORDINARY GENERAL MEETING IS UNAVOIDABLE, THEN TO HOLD EGM ON OR BEFORE 30.06.2020 THROUGH VIDEO CONFERENCING OR OTHER AUDIO-VISUAL MEANS. The procedure for:

a) Companies which are required to provide the facility of e-voting under the Act, or any other company which has opted for such facility.

b) Companies which are not required to provide the facility of e-voting under the Act, is as under

S.NO.	Particulars	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.	For companies which are not required to provide the facility of e-voting under the Act.
	EGM Mode	EGM to be held through Video Conferencing (VC) or Other Audio-Visual Means (OAVM). Convenience of different persons positioned in different time zones shall be kept in mind before scheduling the meeting and Participants should be allowed to pose questions concurrently or given time to submit questions in advance on email of the Company. Recording of EGM to be kept safe by the company & Public Company shall make the transcript of such recordings available on its website, if any.
	Capacity of VC or OAVM facility	Facility must allow at least 1000 members to participate on first come first-serve basis.	Facility must allow at least 500 members or members equal to the total number of members of the company, whichever is lower, to participate on first come first-serve basis.
	Participation may be allowed without restriction on account of first come-first serve basis	I. Large Shareholders (shareholding 2% or more), II. Promoters, institutional investors, directors, key managerial personnel, III. The chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, auditors etc
	Facility window to join the meeting	Facility window shall be kept open for at least 15 minutes before scheduled time & shall not be closed till the expiry of 15 minutes after scheduled time.
	E-voting system	Facility of remote e-voting shall be provided in accordance with the Act and the rules, before the actual date of the meeting.	-
	If vote have not casted through remote e-voting	Members who are present in the meeting through VC or OAVM and have not casted their vote through remote e-voting and are also not barred otherwise, shall be allowed to vote through e-voting system or by show of hands in the meeting.	-
	Attendance of Members	Through VC or OAVM shall be counted for ascertaining quorum under section 103 of the Act.
	Chairman of the Meeting	Chairman shall be appointed in following manner unless the articles of the company differ: a. If members present at meeting are less than 50, then appointment to be made in accordance with Section 104 of the Act b. In all other cases, shall be appointed by a poll through e-voting during the meeting.	Chairman shall be appointed in following manner unless the articles differ: a. If members present at meeting, less than 50, then shall be appointed in accordance with Section 104 of the Act b. In all other cases, shall be appointed by a poll through sending emails from registered email ids to the designated email id circulated by the company in advance.
	Manner of Voting	Chairman shall ensure that the facility of e-voting system is available for the purpose of conducting a poll during the meeting held through VC or OAVM. a. If Members present are less than 50 at the meeting, then either by e-voting or by show of hands. b. Unless a demand for poll is made in accordance with the section 109 of the act or in any other case, wherein voting shall be conducted through e-voting system.	a. If Members present are less than 50 at the meeting by show of hands. b. If poll is asked on any item, then members shall send email from their email id registered with the company on the designated email id of the company circulated by the company in advance. The Company shall provide a designated email id duly safeguarded to all members at the time of sending notice of the meeting. Confidentiality of passwords and other privacy issues to be maintained and due safeguard with regard to authenticity of the email address and other details of the members shall be taken care by the company.
	Counting of Votes	-	If counting of votes requires time, the said meeting may be adjourned and called later to declare the result.
	Proxy	Since meeting’s to held through VC or OAVM and physical presence of members has been dispensed with, the facility for appointment of proxies will not be available for such meetings. However in pursuance of section 112 and 113 of the Act, representatives of the members may be appointed for remote e-voting or for participation and voting in the meeting held through VC or OAVM.
	Mandatory Participations	At least one Independent Director (if required to be appointed) and Auditor or his authorized representative, who is qualified to be auditor shall attend meeting through VC or OAVM. Participation of Institutional Investors, if members of the company Should be encouraged to attend and vote in such meeting.
	Notice of General Meeting	Notice of meeting shall contain: 1. Disclosures with regard to the manner provided in the circular 2. How to access and participate in the meeting Notice of meeting should be displayed on website of the company, *and should be intimated to stock exchanges in case of listed company.*
	If notice of meeting issued prior to the date of this circular	Then framework proposed in this circular may be adopted for the meeting. Fresh notice of shorter duration with due disclosures in consonance with this circulars, may also be issued, if consent in accordance with section 101(1) has been obtained from members.
	Filing with Registrar of Companies	Resolutions passed in accordance with this mechanism shall be filed with the Registrar of Companies within 60 days of the meeting, clearly indicating that the mechanism provided in the circular along with other provisions of the Act and rules were duly complied with during such meeting.
	Other Compliance	The company shall ensure that all other compliances associated with the provisions relating to general meeting viz making of disclosures, inspection of related documents by members, or authorizations for voting by body corporate etc as provided in the Act and the articles of association of the company are made through electronic mode. The company should also provide a helpline number through RTA, technology provider or otherwise for shareholders who need assistance.