Corp Affairs Ministry giving more leeway for firms to hold AGMs virtually

The corporate affairs ministry on Tuesday provided more leeway for companies in terms of holding annual general meetings in virtual mode.

The relaxation will be applicable for companies planning to hold their annual general meetings (AGMs) next year for the financial year 2021-22.

Companies proposing to hold their AGMs in 2022 for the financial year ended/ending any time before/on March 31, 2022 have been allowed to conduct the same through the virtual mode till June 30, 2022, according to a circular.

The companies can conduct their AGMs through video conference (VC) or other audio visual means (OAVM).

The ministry also clarified that the circular should not be construed as conferring any extension of time for holding AGMs by the companies under the Companies Act, 2013.

"... the companies which have not adhered to the relevant timelines shall be liable to legal action under the appropriate provisions of the Act," the circular said.

Chandrika Sridhar, Partner at Deloitte India, said the clarification by the ministry regarding holding AGM through VC or OAVM is a welcome one and timely.

"It will provide a breather for companies due to the continuing restrictions (and possible third wave considerations) relating to the pandemic," Sridhar added.

The ministry is implementing the Companies Act, 2013.