MCA Updates Clarification on passing of ordinary and special resolutions by companies under the Companies Act, 2013 and rules made thereunder on account of the threat posed by COVID-19

In continuation of the earlier Circular  issued by the Ministry of Corporate Affairs (MCA) on 8^th April, 2020 regarding conduct of extraordinary general meetings (EGMs) through video conferencing (VC) or other audio visual means (OAVM), the MCA has issued another Circular to provide greater clarity regarding issue of notices to members for such meetings by using only electronic means, in view of the COVID-19 related lockdown and social distancing requirements, while at the same time ensuring that the relevant companies facilitate registration of email addresses of the members who have not done so and make suitable disclosure in this regard at the time of issue of public notice in the newspapers.

The public notice to be issued by relevant companies would also be required to specify the manner in which members who are holding shares in physical form or who have not registered their email addresses with the company can cast their vote through remote e-voting or through the e-voting system during the meeting.

A similar framework for smaller companies i.e. companies which are not required to provide e-voting facility to their members has also been specified in the Circular. This procedure is being allowed on account of disruption caused in postal services, whereby it has become difficult to serve or receive notices by post.

The Circular also provides that where certain companies intend to transact a business only through postal ballot (without convening a general meeting) in accordance with the applicable provisions of the Companies Act, 2013/rules made thereunder, then in such case, the relevant provisions of the Companies (Management and Administration) Rules, 2014 with regard to voting by electronic means and the framework provided for e-voting in the present Circular and earlier Circular dated 08^th April, 2020 issued by MCA would be applicable mutatis mutandis.

The above clarifications are expected to greatly facilitate the conduct of business by companies during these extraordinary times. 

For further details http://www.mca.gov.in/Ministry/pdf/Circular17_13042020.pdf