Clarification on passing of Ordinary and Special resolutions on account of the threat posed by Covid-19

Clarification on passing of Ordinary and Special resolutions on account of the threat posed by Covid-19

MCA vide General Circular No. 14/2020 dated 08.04.2020 gives clarification on passing of Ordinary and Special resolutions by Companies under the Companies Act,2013 and rules made thereunder on account of the threat posed by Covid-19.

Several representations were received by Ministry of Corporate Affairs to allow companies to pass ordinary and special resolutions of urgent nature, in view of difficulties faced by the Stakeholders on account of threat posed by Covid-19. The issues raised in the said representations have been examined considering the overall situation at present.

In view of the current extraordinary circumstances due to the pandemic caused by COVID-19 prevailing in the country,requiring social distancing, companies are requested to take all decisions of urgent nature requiring the approval of members, other than items of ordinary business or business where any person has a right to be heard, through the mechanism of postal ballot/e-voting in accordance with the provisions of the Act and rules made! thereunder, without holding a general meeting, which requires physical presence of members at a common venue.

However, in case holding of an extraordinary general meeting (EGM) by any ‘company is considered unavoidable, the following procedure needs to be adopted for conducting such a meeting on or before 30.06.2020, in addition to any other requirement provided in the Act or the rules made thereunder;

A. For companies which are required to provide the facility under the Act, or any other company which has opted for such facility

B. For companies which are not required to provide the facilityof e-voting  under the Act, or any other company which has opted for such facility

Source: http://www.mca.gov.in/Ministry/pdf/Circular14_08042020.pdf

DISCLAIMER: THE ARTICLE IS BASED ON THE RELEVANT PROVISIONS AND AS PER THE INFORMATION EXISTING AT THE TIME OF THE PREPARATION. IN NO EVENT I SHALL BE LIABLE FOR ANY DIRECT AND INDIRECT RESULT FROM THIS ARTICLE. THIS IS ONLY A KNOWLEDGE SHARING INITIATIVE.

THE AUTHOR – CS DEEPAK SETH (ASSOCIATE PARTNER HELPINGHANDS PROFESSIONALS LLP) AND CAN BE REACHED AT CONTACTHHPRO@GMAIL.COM OR 9910248911.