CLARIFICATION ON HOW TO PASS MEMBER RESOLUTION IN  COVID-19 THREATMinistry of Corporate Affairs, Government of India, has issued circular vide no 14/2020 on 08th April, 2020 for clarification on passing of ordinary and special resolutions by companies under the Companies Act, 2013 and rules made there under on account of the COVID 19 threat.

As there is no specific provision for allowing the companies to conduct the member’s meetings through video conferencing or other audio-visual means whereas in this COVID-19 pandemic and considering the emergency the MCA allowed the same and issued the clarification to pass the ordinary and special resolution  in case to transact the business agenda which required the member's consent.

Where an extraordinary general meeting is unavoidable, then to hold EGM on or before 30.06.2020 through video conferencing or other audio-visual means after following the below-mentioned procedure in addition to other requirements: 

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-

1.  Maintenance of the recorded transcript in the safe custody of the company and for the public company it should be uploaded on the website at the earliest.

2. Convenience of different persons positioned in different time zones shall be kept in mind before scheduling the meeting.

3.  Participants should be allowed to pose questions concurrently or given time to submit questions in advance on email of the Company. Such facility should have capacity of atleast 1000 members on the first served basis.

4. Large Shareholders (shareholding 2% or more),  promoters, institutional investors, directors, key managerial personnel, the chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, auditors etc should be allowed to attend without restriction of first served basis.

5.  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.

6. The attendance of the members should be counted for the purpose of satisfying the quorum as per the provisions of companies Act 2013.

7.  Members who are present in the meeting through VC or OAVM and have not casted their vote through remote e-voting and not barred otherwise, shall be allowed to vote through e-voting or by show of hands in the meeting.

8.  Chairman shall be appointed in following manner unless the articles of the company require any specific person to be appointed as chairman:

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 e-voting during the meeting 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.

9.  Since meeting is held through VC or OAVM, 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.

10. At least one Independent Director (if applicable) and Auditor or his authorized representative, who is qualified to be auditor shall be mandatory participants to attend meeting through VC or OAVM.

11. Institutional Investors, if members of the company should be encouraged to attend and vote in such meeting.

12. Notice of the general meeting shall make the disclosure with regard to the manner provided in the circular and the access and the participation in the meeting. The helpline numbers should be provided for the technical help. Copy of the meeting will be displayed on the website and for listed copy the intimation will be sent to the stock exchange.

13. If notice of meeting issued prior to the date of this circular Fresh notice of shorter duration may also be issued, if consent in accordance with section 101(1) has been obtained from members.

14. Resolutions passed in accordance with this mechanism shall be filed with the Registrar of Companies within 60 days of the meeting.

B. For companies which are not required to provide the facility of e-voting under the Act:

1.  Convenience of different persons positioned in different time zones shall be kept in mind before scheduling the meeting.

2. 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.

3.  Large Shareholders (shareholding 2% or more), promoters, institutional investors, directors, key managerial personnel, the chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, auditors etc.

4. 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.

5.  Members attendance shall be counted for ascertaining quorum under section 103 of the Act.

6. Chairman shall be appointed in following manner unless the articles of the company require any specific person to be appointed as chairman:

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.

7. Voting should be in such manner that If Members present are less than 50 at the meeting by show of hands. If poll is asked on any item, then members shall send email from their registered email ids on the designated email id of the company. The Company shall provide a designated email id duly safeguarded to all members at the time of sending notice of the meeting.

8. If counting of votes requires time the said meeting may be adjourned and called later to declare the result.

9.  Since meeting is to held through VC or OAVM, facility for appointment of proxies will not be available for 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.

10.  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.

11. Institutional Investors, if members of the company should be encouraged to attend and vote in such meeting.

12. Notice of the general meeting shall make the disclosure with regard to the manner provided in the circular and the access and the participation in the meeting. The helpline numbers should be provided for the technical help. Copy of the meeting will be displayed on the website and for listed copy the intimation will be sent to the stock exchange.

13. If notice of meeting issued prior to the date of this circular Fresh notice of shorter duration may also be issued, if consent in accordance with section 101(1) has been obtained from members.

14. Resolutions passed in accordance with this mechanism shall be filed with the Registrar of Companies within 60 days of the meeting.

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