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The corporate affairs ministry (MCA) has permitted companies to hold their annual general meetings (AGMs) and extraordinary general meetings (EGMs) through videoconferences or other audiovisual means for one more year till September 2025.
In a circular, the ministry also said that companies are allowed to transact stipulated items through postal ballots until next September.
"However, it is hereby clarified that general circular shall not be construed as conferring any extension of statutory time for holding of AGMs by the companies under the Companies Act, 2013 and the companies which have not adhered to the relevant statutory timelines shall be liable to legal action under the appropriate provisions of the Act," the circular said.
Virtual meetings have proved to be time-efficient, cost-effective and accessible for stakeholders, especially the smaller ones, said Prakhar Mithal, advocate at Kings & Alliance LLP.
"It's high time that the VC (venture capital) option is formally introduced instead of merely extending the Covid-era circular, recognising it as a permanent alternative in today's corporate governance landscape," Mithal said.
The ministry had first allowed companies to undertake such crucial meetings through the electronic mode in the wake of the Covid-19 pandemic in 2020. It has since extended the relief periodically.
In a circular, the ministry also said that companies are allowed to transact stipulated items through postal ballots until next September.
"However, it is hereby clarified that general circular shall not be construed as conferring any extension of statutory time for holding of AGMs by the companies under the Companies Act, 2013 and the companies which have not adhered to the relevant statutory timelines shall be liable to legal action under the appropriate provisions of the Act," the circular said.
Virtual meetings have proved to be time-efficient, cost-effective and accessible for stakeholders, especially the smaller ones, said Prakhar Mithal, advocate at Kings & Alliance LLP.
"It's high time that the VC (venture capital) option is formally introduced instead of merely extending the Covid-era circular, recognising it as a permanent alternative in today's corporate governance landscape," Mithal said.
The ministry had first allowed companies to undertake such crucial meetings through the electronic mode in the wake of the Covid-19 pandemic in 2020. It has since extended the relief periodically.
