The COVID-19 pandemic has affected operations across the globe, including the usual functions of a company. Running a business amidst the pandemic adds another layer of challenge for its founders. Small and medium enterprises and startups have limited resources and time and hence require a special focus to survive during this outbreak.

The Ministry of Corporate Affairs (MCA) has recognized the need to ease requirements for companies to run their businesses and the difficulties faced by companies on account of the ongoing nationwide lockdown and social distancing due to COVID-19. The ministry has also taken note of various representations received from the industry associations and corporates on the need to facilitate companies in taking certain immediate measures in the face of extreme disruptions and dislocation caused by the pandemic.

The Ministry of Corporate Affairs has earlier allowed all meetings of the Board of Directors up to 30th June 2020, to be conducted through video conferencing (VC) or Other Audio Visual Means (OAVM) vide its notification dated 19.03.2020, including meetings on items where the physical presence of directors is otherwise required.

To further ease companies to run their operations and facilitating corporate compliances during the current lockdown period, the Ministry of Corporate Affairs has issued a circular allowing companies to hold Extraordinary General Meetings (EGMs) through VC or OAVM complemented with e-Voting facility/simplified voting through registered emails, without requiring the shareholders to physically assemble at a common venue. The Companies Act, 2013 allows ordinary and special resolutions to be passed through postal ballot/e-voting route without holding a physical general meeting. However, in the present lockdown/social distancing conditions due to COVID-19, postal ballot facility cannot be utilized by the companies.

Accordingly, the General Circular No. 14/2020 dated 08.04.2020 issued by the MCA allows listed companies or companies with 1,000 shareholders or more which are required to provide e-voting facility under the Companies Act, 2013 to conduct EGM through VC/ OAVM and e-Voting.  For other companies, a highly simplified mechanism for voting through registered emails has been put in place for easy compliances.

Such an initiative leverages technology to promote social distancing and enabling everyone to follow the Government of India’s directions to combat the COVID-19 pandemic. As the meetings will be conducted over VC/OAVM, the facility for appointment of proxies has been dispensed with, while representatives of corporate bodies will continue to get appointed for participation in such meetings.

This framework allows the companies to hold shareholders’ EGMs through VC/OAVM without compromising on the other requirements of law. As an additional check, all companies using this option are required to maintain a recorded transcript of the entire proceedings in safe custody, and public companies are also required to host this transcript on their website for greater transparency. Further, all resolutions passed through this framework will be required to filed with the RoC within 60 days, so that such resolutions may be viewed publicly. Other safeguards have also been included in the circular to ensure transparency, accountability and protection of the interests of investors.

Such initiatives by the Government of India should bring some relief to founders and business owners in following the compliances and regulations. The government is actively adopting innovative ways of combating the COVID-19 crisis. 

More details about the Ministry of Corporate Affairs’ circular dated 08 April 2020 can be accessed through the following link:


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