India Inc gets a boost as MCA extends virtual AGM and EGM facility until Sept 2025

In a significant relief for India Inc, the Corporate Affairs Ministry (MCA) has now allowed companies -- whose annual general meetings (AGMs) are due in the year 2024 or 2025 -- to hold them through video conference (VC) mode till September 30, 2025.

• Also read: India Inc logs lowest revenue growth in almost 4 years

In another decision, MCA has also allowed companies to hold their extraordinary general meetings (EGMs) via video conference or Other Audio Visual Means (OAVM) or transact items through postal ballot till the end of September 2025.

“In continuation to this ministry’s general circular dated May 5, 2020, general circular dated May 5, 2022, general circular dated December 28, 2022, and general circular dated September 25, 2023, it has been decided to allow the companies whose AGMs are due in the year 2024 or 2025, to conduct their AGMs through VC or OAVM on or before September 30, 2025,” the MCA said in a circular on Thursday. 

The latest MCA move aligns with the broader objective of acknowledging the digital mode as an alternative efficacious mode for conducting the affairs of companies. Some experts even suggested that the video-conferencing option should be legislated, and such facility be provided as an alternate for small companies.

The video conferencing system leverages the strengths of digital India by using a combination of VC and e-voting/simplified voting through registered emails to enable companies to conduct their EGMs.

As the meetings will be conducted over VC/OAVM, the facility for the appointment of proxies had been dispensed with, while representatives of corporate bodies will continue to get appointed for participation in such meetings.

The latest MCA circular also clarified that the latest move should not be considered as conferring any extension of time for holding of AGMs by the companies under the Companies Act 2013. 

Also, the companies, which have not adhered to the relevant timelines, would be liable for legal action under the appropriate provisions of the Companies Act 2013.

Company law experts highlighted that the latest dispensation to hold virtual AGMs up to September 2025 would be available for companies whose financial year ends on December 31, 2024, or March 31, 2025. 

The latest MCA move is in continuation of relief announced for India Inc post the onset of Covid-19 pandemic. In March 2020, the MCA took several measures to make life easy for India Inc to meet the company law’s compliance requirements.

In September 2023, the MCA extended the virtual AGM facility till September 2024 in respect of companies that were to hold AGM in the year 2023 or 2024. MCA had also then clarified that companies could hold their EGMs via video conference and transact items through postal ballot till the end of September 2024.

Virtual EGMs 

Against the backdrop of the Covid-19 pandemic, the MCA had on April 8, 2020, for the first time allowed companies to hold EGMs through virtual mode till June 30, 2020. 

This was later extended multiple times to September 30, December 31, 2020, June 30, 2021, December 31, 2021, June 30, 2022, December 31, 2022, September 30, 2023, September 30, 2024 and now to September 30, 2025.

Prakhar Mithal, Advocate, Kings & Alliance LLP said that the MCA extension of allowing companies to hold their AGMs and EGMs via video conferencing [VC] or Other Audio Visual Means [OAVM] until September 2025 marks a progressive step in corporate governance.

This decision, in line with Section 108 (dealing with voting by electronic means) and Section 110 (postal ballot) of the Companies Act, 2013, embraces the virtual format that became crucial during the Covid-19 pandemic, he noted.

“The pandemic acted as a catalyst for companies to adopt digital platforms for meetings, overcoming geographical barriers and facilitating broader participation. Virtual meetings have proven to be time-efficient, cost-effective, and accessible for stakeholders, especially smaller shareholders. It’s high time that the VC option is formally introduced instead of merely extending the Covid-era circular, recognizing it as a permanent alternative in today’s corporate governance landscape,” Mithal said.