NEW DELHI : Companies can hold shareholder meetings by videoconference, other audiovisual means or by postal vote until the end of June 2022, the Ministry of Social Affairs said on December 8. The facility was introduced in March 2020 due to the pandemic and was expected to be in place until the end of December 2021.
The decision to expand this facility was taken after reviewing the situation, the ministry said. However, these meetings must be held within the framework provided for this purpose, he said.
Companies that organize extraordinary general meetings (AGE) by audiovisual means must offer at least 1,000 shareholders the opportunity to participate on a first-come, first-served basis. However, the principle is not applicable in the case of shareholders holding a stake of 2% or more, institutional investors, key managers, auditors and chairs of key committees of the board of directors.
Companies must also keep recorded transcripts of these meetings. In the case of public companies, transcripts must also be made public. Also, there should be a facility for full-duplex communication.
Shareholders’ EGMs are convened in an emergency, for example to deal with a legal situation.
The virtual meeting facility served businesses well during the first two waves of the pandemic. Its extension makes decision-making more efficient for companies at a time when physical meetings are still undesirable given the pandemic situation.
The government previously permanently removed the restriction on holding video conferences in certain cases, such as board meetings for the approval of annual financial statements.
Physical meetings were previously required for board resolutions given the need for a quorum and the impact of such binding decisions on stakeholders.
The regulations for audiovisual meetings specify that the quorum must be maintained throughout the duration of the meeting.
In a separate order, the ministry said that companies whose general meetings were to be held in 2021 could hold them before June 30, 2022, although this should not be interpreted as an extension of the deadline for holding general meetings by the companies. businesses under the Companies Act.
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