Procedure to Conduct Annual General Meeting by VC/OAVM

Holding an Annual General Meeting is a yearly procedure to be followed by every company. The Ministry of Corporate Affairs vides a General Circular No. 19/2021 dated December 08, 2021, issued a clarification on holding of Annual General Meeting (AGM) through Video Conference (VC) or Other Audio-Visual Means (OAVM). With this circular MCA announced that it has been decided to allow the company’s Annual General Meetings are due in the Year 2021, to conduct their AGMs on or before June 30, 2022. The present article tries to clear up the basic provisions relating to conducting the Annual General Meeting by VC/OAVM.

Synopsis of MCA Circular

In view of the continuing restrictions on the movement of persons at several places in the country, it has been decided that the companies be allowed to conduct their AGM through video conferencing (VC) or other audio-visual means (OAVM) subject to the fulfillment of the certain requirements.

MCA has decided to allow the companies whose AGMs are due in the Year 2021, to conduct their AGMs on or before June 30, 2022.
MCA also clarified that this General Circular No. 19/2021 shall not be construed as conferring any extension of time for holding of AGMs by the companies under the Companies Act, 2013 and the companies which have not adhered to the relevant timelines shall be liable to legal action under the appropriate provisions of the Companies Act.

Basic Provisions Relating to the Conducting 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 a period of nine months from the end of the first financial year. However, in any other case, the AGM should be held within a period of six months from the end of the financial year.

Ministry of Corporate Affairs (the MCA) has allowed companies to hold an annual general meeting (AGM) in a manner similar to the one provided in, which deal with the conduct of extraordinary general meeting (EGM) and by virtue of the same, the companies have been allowed the holding of annual general meeting (AGM) through video conferencing (VC) or other audiovisual means (OAVM). For More Details on Annual General Meeting, click here

Summing up various circulars already issued

General Circular No. 20/2020 dated 5^th May 2020 - The circular allows the companies to conduct the AGM via video conferencing or other audio-visual means. General Circular No. 02 /2021 dated 13^th January 2021 - This circular allows companies to conduct their AGM on or before 31st December 2021 through Video Conferencing (VC) or Other Audio-Visual Means (OAVM) i.e. in accordance with the requirements specified in the General Circular No. 20/2020 dated 5^th May 2020.

The Procedure of Conducting AGM by VC /OAVM for Companies where e-voting is required

The Procedure of Holding Annual General Meeting (AGM) through Video Conferencing (VC) or Other Audio-Visual Means (OAVM) For Companies mandatory opted for providing e-voting facility explained below:

Forwarding Notice to Members

The Notice of Holding AGM shall be dispatched to members only through e-mails registered with the Company or Depository Participant. Financial statements (including Board’s report, Auditor’s report, or other documents required to be attached therewith), shall be sent by email to members and the other persons entitled to receive.

Publishing Notice in News Papers

Before sending the notices and copies of the financial statements, etc., public notice by way of the advertisement be published at least once in a vernacular language and in the English language in respective language newspaper mentioning the following details:

A statement that the AGM will be convened through VC / OAVM as per applicable legal prescriptions.
The date and time of the AGM through VC / OAVM
Availability of notice of the meeting on the website of the company (on the stock exchange by listed entities)
For members who are holding shares in physical form or who have not registered their email addresses with the company – stating they can cast vote through e-voting/remote e-voting.
The manner for registration of unregistered members for registration
Manner to mandate receiving dividends directly in member’s bank account.

Facility for Joining the AGM

The facility for joining the meeting shall be opened at least 15 minutes before the time scheduled for the meeting and close after 15 minutes of expiry of the scheduled time of the meeting
The Company shall ensure that meeting through VC or OAVM allows two-way teleconferencing or Webex for the ease of participation of the members and the participants are allowed to ask questions or given time to ask questions in advance on the email address of the Company.
The Facility must have the capacity to allow at least 1,000 members to participate on the First-cum-First-serve basis.

Selection of Members to Participate in AGM

Participation of at least One Independent Director (Where the Company has Independent Directors) and the Auditors or his representative is mandatory for holding meetings through VC or OAVM. The shareholders holding 2% or more shareholding, promoters, KMPs, Chairpersons of Audit Committee and Nomination & Remuneration Committee, etc. may be allowed to attend the meeting without restrictions. Chairperson: As specified in Articles of Association (AOA) of the Company. If AOA does not specify the name of the Chairperson then-

Where there are <50 members present: Chairperson appointed as per Section 104 of the Act;
In all other cases: Appointed by Poll conducted through e-voting.

Attendance of members through VC or OAVM shall be counted for quorum u/s 103 of the Companies Act.

Payment of Dividend to Shareholder

In case the Company is unable to pay the dividend to any shareholder by the electronic mode, due to non-availability of the details of bank account, then the company, upon normalization of the postal services, is allowed to dispatch the dividend warrant/cheque by post for dividend remaining unpaid.

Permission to Conduct AGM physically

If the Company has received permission to conduct AGM physically, then the persons attending such meetings physically as well as persons attending the meeting through VC/OAVM shall be reckoned for the purpose of quorum. All resolutions shall continue to be passed through the facility of the e-voting system. All resolutions shall continue to be passed through the e-voting facility.

The Procedure of Conducting AGM by VC /OAVM For Companies where e-voting is not required:

The Procedure of Holding Annual General Meeting (AGM) through Video Conferencing (VC) or Other Audio-Visual Means (OAVM) For Companies where e-voting is not required is explained below:

Email Addresses is Mandatory for AGM

The Company can conduct AGM through VC or OAVM Facility only when it has the email addresses of at least half of its total number of members:

1	In the case of Nidhi Companies	Who hold shares of more than Rs. 1,000/- in face value or more than 1% of the total paid-up share capital, whichever is less
2	In the case of other Companies having Share Capital	Who represents not less than 75% of such part of the paid-up share capital of the company as gives a right to vote at the meeting
3	In case of Companies not having Share Capital	Who has the right to exercise not less than 75% of the total voting power exercisable at the meeting

The company need to take all necessary steps to register the email addresses of all persons who have not registered their email addresses with the company

Forwarding Notice to Members

The Notice of Holding AGM shall be dispatched to members only through e-mails registered with the Company or Depository Participant; The copies of financial statements including Board’s report, Auditor’s report, or other documents required to be attached therewith, shall be sent only by email to the members, trustees for the debenture-holders, and to all other persons so entitled;

Facility for joining the AGM

The Facility must have a capacity to allow at least 500 members or equal to the total number of members of the Company, whichever is lower, to participate on the First-cum-First-serve basis. All other conditions/requirements specified above under the topics “Facility for joining the AGM, Selection of members to participate on AGM and Payment of Dividend to Shareholder ” are applicable to conduct AGM For Companies where e-voting is not required.

Conditions for Voting

If the Company has Institutional Investors as its members, they must be encouraged to attend and vote in the AGM through VC or OAVM.
In case the Poll is required to be taken, the Company shall provide a designated email address to all members at the time of sending the notice of meeting so that the members can convey their vote.
During the meeting held through VC or OAVM facility, where a poll on any item is demanded, the members shall cast their vote on such resolution only by sending emails through their email address registered with the Company.
Any member-voted through any other email id not registered with Company, such vote shall be considered as Invalid.

Voting on Resolution(s):

Where <50 members present: Voting by show of hands unless poll demanded
Where >50 members present: Voting by poll through e-mail as stated in clause 15 above

It is important to remember that conducting the Annual General Meeting of a Private Limited Company is a simple affair that is not complicated. For more information about Private Limited Company or Annual General Meeting, visit IndiaFilings.com