Cos can send EGM notices to shareholders through e-mails

The government on Monday said companies can send notices for extraordinary general meetings through e-mails to shareholders, a decision that comes amid the lockdown and social distancing requirements due to the coronavirus pandemic.

This facility will also be applicable to companies planning to transact a business only through postal ballot without convening a general meeting.

Less than a week after permitting companies to conduct extraordinary general meetings (EGMs) through video conferences and to seek approval for proposals through electronic voting facility, the corporate affairs ministry on Monday came out with a new circular to provide greater clarity on certain aspects.

Now, companies have to facilitate registration of e-mail addresses of shareholders who have not done so and make suitable disclosure in this regard at the time of issue of public notices in newspapers.

The public notices should also "specify the manner in which members who are holding shares in physical form or who have not registered their e-mail addresses with the company can cast their vote through remote e-voting or through the e-voting system during the meeting," the ministry said in a release.

A similar framework would also be in place for smaller companies, those which are not required to provide e-voting facility to their members.

"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 release said.

Listed companies or those with at least 1,000 shareholders that are required to provide e-voting facility under the Companies Act, 2013 have already permitted to conduct EGMs through video conference or other audio visual means.

For other companies, the ministry said a "highly simplified mechanism for voting through registered emails has been put in place for easy compliance", the ministry said on April 8.

EGMs of shareholders are convened to get approvals for urgent business proposals.

The relaxation, which would be in place till June 30, would ensure that there is no requirement for shareholders to be physically present at a common venue for an EGM.

The Act allows ordinary and special resolutions to be passed through postal ballot/e-voting route without holding a physical general meeting.

"However, in present lockdown/ social distancing conditions due to COVID-19, postal ballot facility cannot be utilised by the companies," the release said.

In March, the ministry allowed conducting of board meetings through video conferencing or other audio visual means, including meetings on items where the physical presence of directors is otherwise required.