Relaxation in holding of AGM and EGM through VC/ OAVM till December 31, 2022
Relaxation in Holding of AGM and EGM through VC/ OAVM till December 31, 2022
Holding an Annual General Meeting is a yearly procedure to be followed by every company. The Ministry of Corporate Affairs (MCA) has allowed companies to hold their Annual General Meetings (AGMs) through video conferencing mode for six more months. As against the set outer limit of the end of June 2022, MCA has now clarified that it has been decided to allow companies whose AGMs are due in the year 2022 to organize the AGMs on/ before 31.12.2022 through Video Conference (VC) or Other Audio-Visual Means (OAVM. The present article briefs Relaxation in holding of AGM and EGM through VC/ OAVM till December 31, 2022.
Synopsis of MCA Circular
The MCA in continuation to its previous General Circulars (including General Circular No. 21/2021 dated 14th December 2021) issued two new circulars to allow Companies to hold AGM through video conferencing or other audio-visual means up to 31st December 2022.
Accordingly, the Companies can now conduct their EGM through VC or OAVM or transact items through the postal ballot in accordance with the provisions/ framework provided in the previous General Circulars (in accordance with the requirements laid down in Para 3 & 4 of General Circular Nos. 20/2020 dated 05.05.2020) up to 31st December 2022
Basic provisions relating to the holding of an Annual General Meeting
Section 96 of the Companies Act, 2013 covers the provisions relating to the Annual General Meeting (i.e., AGM).
- Every company is required to hold a general meeting each year. One person company is not required to hold the AGM.
- In the case of the first AGM, it should be held within nine months from the end of the first financial year. However, in any other case, the AGM should be held within six months from the end of the financial year.
For details on Procedure to Conduct Annual General Meeting through Video Conference (VC) or Other Audio-Visual Means (OAVM), click here
Extraordinary General Meeting (EGM)
An extraordinary general meeting (EGM), is a meeting of members of an organization, shareholders of a company, or employees of an official body that occurs at an irregular time.
An extraordinary general meeting (EGM) is a shareholder meeting called other than a company’s scheduled Annual General Meeting (AGM).
- The extraordinary general meeting is utilized to deal with urgent matters that come up between annual shareholders’ meetings.
- EGMs are often considered for emergency measures such as resolving an immediate legal matter or the removal of a key manager.
For More Details on Extraordinary General Meeting, click here
Relaxation in holding of AGM through VC/ OAVM – General Circular No. 2/2022
In furtherance of the earlier relaxations granted by MCA in respect of holding AGM through VC/ OAVM, MCA has now permitted companies whose AGMs are due in the year 2022, to conduct their AGMs on or before December 31, 2022, through VC/ OAVM
It has been clarified that this relaxation should not be construed as conferring any extension of time for holding of AGMs by the companies under the Companies Act, 2013. The aforesaid relaxation has been granted vide General Circular No. 2/2022 dated May 5, 2022
Relaxation in holding of EGM through VC/ OAVM – General Circular No. 3/2022
In the case of EGMs, MCA has permitted companies to hold EGMs through VC/OAVM or transact items through the postal ballot in accordance with the earlier circulars till December 31, 2022. The extension has been given vide General Circular No. 3/2022 dated May 5, 2022. . The official circular about the Clarification on extraordinary general meeting (EGM) 2022 is attached here for reference:
Applicability of Relaxation
The MCA on 05.05.2022 provided more leeway for companies in terms of holding annual general meetings in virtual mode.
- The relaxation will be applicable for companies whose AGMs are due in the Year 2022
- Companies proposing to hold their AGMs in 2022 for the financial year ended/ending any time before/on March 31, 2022, have been allowed to conduct the same through the virtual mode till December 31st , 2022
- The companies can conduct their AGMs through video conference (VC) or other audio-visual means (OAVM).
The MCA also clarified that the circular should not be construed as conferring any extension of time for holding AGMs by the companies under the Companies Act, 2013. The companies which have not adhered to the relevant timelines shall be liable for legal action under the appropriate provisions of the Companies Act.
On May 5thth, 2022, MCA had allowed the companies whose AGMs are due in the Year 2022, to conduct their AGMs on or before December 31st, 2022.