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Companies can hold shareholder meetings by audio-visual means till year end

The ministry said that after due examination, companies have been allowed to hold their extraordinary general meetings (EGMs) through videoconferencing or other audio-visual means or through postal ballot upto 31, DecemberPremium
The ministry said that after due examination, companies have been allowed to hold their extraordinary general meetings (EGMs) through videoconferencing or other audio-visual means or through postal ballot upto 31, December

  • EGMs of shareholders are called in between scheduled annual meetings to deal with urgent matters such as a legal situation.

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NEW DELHI : The government on Friday further extended the facility for companies to conduct shareholder meetings electronically till the end of December.

An order from the ministry of corporate affairs (MCA) said that after due examination, companies have been allowed to hold their extraordinary general meetings (EGMs) through videoconferencing or other audio-visual means or through postal ballot up to 31 December. This facility was to expire by the end of June.

The ministry introduced the facility for shareholder meetings via audio-visual means in March 2020 in view of the pandemic. The ministry said the video-conference or audio-visual facility has to be utilized as per a framework provided for the same.

EGMs are called in between scheduled annual meetings to deal with urgent matters.

As per the framework, companies holding EGMs by audio-visual means have to offer at least 1,000 shareholders the facility to participate on a first-come-first-served basis. In the case of major shareholders having 2% stake or more, institutional investors, key managerial persons, auditors, and chairpersons of key committees of the board of directors, the first-come-first-serve principle does not apply.

Businesses also have to maintain recorded transcript of such meetings and in the case of public companies, it has to be made public. There should also be a facility for simultaneous two-way communication in such meetings.

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