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NEW DELHI : Companies can hold shareholder meetings through videoconference, other audio-visual means or postal ballot till the end of June 2022, the ministry of corporate affairs said on 8 December. The facility was introduced in March 2020 in view of the pandemic and was to be in place till the end of December 2021.
The decision to extend this facility was taken after examination of the situation, the ministry said. However, such meetings have to be held according to the framework provided for this, it said.
Businesses holding extraordinary general meetings (EGMs) by audio-visual means have to offer at least 1,000 shareholders the facility to participate on a first-come first-served basis. However, the principle is not applicable in the case of shareholders holding 2% stake or more, institutional investors, key managerial persons, auditors and chairpersons of key committees of the board of directors.
Businesses also have to maintain recorded transcripts of such meetings. In the case of public companies, the transcripts have also to be made public. Also, there should be a facility for simultaneous two-way communication.
EGMs of shareholders are called for emergency purposes such as dealing with a legal situation.
The facility for virtual meeting has served businesses well during the first two waves of the pandemic. Its extension makes decision-making more efficient for businesses at a time physical meetings are still not desirable given the pandemic situation.
The government earlier permanently removed the restriction on holding videoconferencing in certain cases such as board meetings for approving annual financial statements.
Physical meetings were earlier required for board resolutions given the need for a quorum and the impact these binding decisions have on stakeholders.
The rules for audio-visual meetings specify that quorum has to be maintained throughout the meeting.
In a separate order, the ministry said that companies whose AGMs were due to be held in 2021 could hold them before 30 June 2022, though it should not be construed as an extension of time for holding AGMs by companies under the Companies Act.
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