NEW DELHI :
Firms can maintain shareholder conferences via videoconference, different audio-visual means or postal poll until the tip of June 2022, the ministry of company affairs stated on 8 December. The ability was launched in March 2020 in view of the pandemic and was to be in place until the tip of December 2021.
The choice to increase this facility was taken after examination of the state of affairs, the ministry stated. Nonetheless, such conferences must be held based on the framework offered for this, it stated.
Companies holding extraordinary normal conferences (EGMs) by audio-visual means have to supply not less than 1,000 shareholders the power to take part on a first-come first-served foundation. Nonetheless, the precept shouldn’t be relevant within the case of shareholders holding 2% stake or extra, institutional buyers, key managerial individuals, auditors and chairpersons of key committees of the board of administrators.
Companies even have to take care of recorded transcripts of such conferences. Within the case of public firms, the transcripts have additionally to be made public. Additionally, there needs to be a facility for simultaneous two-way communication.
EGMs of shareholders are referred to as for emergency functions corresponding to coping with a authorized state of affairs.
The ability for digital assembly has served companies nicely throughout the first two waves of the pandemic. Its extension makes decision-making extra environment friendly for companies at a time bodily conferences are nonetheless not fascinating given the pandemic state of affairs.
The federal government earlier completely eliminated the restriction on holding videoconferencing in sure instances corresponding to board conferences for approving annual monetary statements.
Bodily conferences had been earlier required for board resolutions given the necessity for a quorum and the affect these binding choices have on stakeholders.
The foundations for audio-visual conferences specify that quorum must be maintained all through the assembly.
In a separate order, the ministry stated that firms whose AGMs had been on account of be held in 2021 might maintain them earlier than 30 June 2022, although it shouldn’t be construed as an extension of time for holding AGMs by firms beneath the Firms Act.
Supply: Live Mint