June 17, 2021 6:03:39 pm
Boards of companies can now approve annual financial statements and matters related to mergers, among others, at meetings held through video conferencing and other audio-visual means.
Amid the coronavirus pandemic resulting in the shift from physical meetings to virtual ones, the Ministry of Corporate Affairs (MCA) has amended rules pertaining to ‘meetings of board and its powers’ under the Companies Act, 2013.
Nangia Andersen LLP Partner Sandeep Jhunjhunwala said the Companies Act always permitted conducting meetings through video conferencing but key matters such as approving the financial statements, board’s report and prospectus required physical meetings.
“Acknowledging the difficulty always caused by the ongoing pandemic, the MCA has eliminated the list of matters that could be conducted through audio-visual means.
“This step would go a long way in ensuring that the hurdles faced by companies are reduced and business can be carried on smoothly with the aid of technology,” he noted.
Earlier, the rules specifically mentioned a list of matters that cannot be dealt with by a company’s board through video conferencing or other audio-visual means.
Approval of the annual financial statements, board’s report, prospectus, matters relating to amalgamation, merger, demerger, acquisition and takeover, and holding of the audit committee meetings for consideration of accounts, were not permitted.
With the latest amendment, the list has been done away with.
In this regard, the ministry notified the Companies (Meetings of Board and its Powers) Amendment Rules, 2021, on June 15.
According to Jhunjhunwala, permitting audio-visual means for all matters will also enable companies to fulfil compliances promptly and will thereby ease the pressure on stakeholders.
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