Extraordinary circumstances need extraordinary measures. The pandemic has proved the statement to be axiomatic, which can be juxtaposed to the corporate realm. In the times of pandemic more or less every type of functionary came to a standstill except the very essential ones. But as life must go on, the human kind has found ways to carry on life through bypassing physical presence while shifting things virtually considering the scopes. Mega corporation Grameenphone held its 23rd annual general meeting of 2020 on its very own digital platform, not in-person. This is a whole new scenario for the corporate sector of Bangladesh, considering general meetings can be tagged as the most vital function for the smooth operation of a company. But this also gives rise to a legal question, which is, if the current legal frameworks surrounding the corporate realm are accommodating for such scenarios or are there some lacunas and blockages.
A company has to call for several types of meetings based on different events and requirements, section 81 to 89 and schedule -1 of the companies act 1994 has laid down provisions of certain meetings. Amongst different meetings there is , AGM (Annual general meeting) which requires a notice period of 14 days in writing and EGM (Extraordinary general meeting) which requires that of 21 days. Notice may be served personally or by registered post. The meeting may be called by shorter notice if it so agreed in writing by all members entitled to attend and vote. Therefore, an electronic copy of the notice can be sent personally to the shareholders through email as long as the notice is in written format.
Any meetings need different persons of the company to be present. Regarding presence in the meeting, presence in person (here the Bengali text of this provision stipulates "personal presence") or by proxy is required. Therefore, virtual presence is not prohibited as long as personal presence or presence by proxy is ensured. As this provision talks about presence personally or proxy it is clear that it does not intend or mean physical presence of such a person. However, still for better procedural clarity, the company's Article can stipulate the procedure of virtual presence and virtual voting.
Every company is statutorily required to cause minutes of all proceedings of general meeting and meetings of its directors to be entered in books kept for that and other purposes. Any such minute shall be signed by the chairman of the meeting at which the proceedings were had or by the chairman of the next succeeding meeting as evidence of the proceedings. Here a question of physical presence arises legally.
However, Section 6 of the Information and Communication Technology Act, 2006 ("ICT Act, 2006") grants functional equivalence to, and establishes the principle of non-discrimination for electronic records in Bangladesh. The said section in essence provides that if any law provides for any information or any other matter to be recorded in handwritten or typed or in any other form of writing or printing, such information/matter can be recorded electronically, subject to such information or matter being accessible for a subsequent reference.
Again, section 9 of ICT Act, 2006 imposes additional requirements for retention of electronic records which essentially are as follows:
(a) the preserved electronic records shall be accessible in future;
(b) such records shall be maintained in such original format in which they had been generated/ sent or received;
(c) mechanisms enabling determination of origin/destination, date and time of sending and receipt of electronic records in question, are in place.
Accordingly, a cogent argument depicts in addition to written or typewritten copies of the minutes, assuming the digital copies satisfy the requirements for maintaining electronic records under section 6 and 9 of ICT Act-2006, they will be deemed to be valid and enforceable records in Bangladesh, upon reliance on section 6 and 9 of the ICT Act-2006.
However, section 88 of the Companies act 1994 stipulates, in case any special or extraordinary resolution is adopted in such a meeting, a copy of every special and extraordinary resolution shall, within fifteen days from the passing thereof, be printed or typewritten and duly certified under the signature of an officer of the company and filed with the Registrar who shall record the same. Therefore, although the meetings and other activities can be conducted virtually and remotely, this filing requirement will make physical presence necessary.
So it can be inferred, a virtual general meeting is possible as long as it addresses the required statutory reports and agendas and is signed by the Chairman of the meeting or the Chairman of the next meeting and in case of any special or extraordinary resolution adopted in such meeting it is within fifteen days from the passing thereof, printed or typewritten and duly certified under the signature of an officer of the company and filed with the Registrar for recording purposes.
Generally, there is no residency requirement for directors of a company in Bangladesh. Therefore, general administrative affairs of a company can be run remotely from abroad by directors residing abroad. Although complete remote administration is not possible due to several in person activities of company officers, hence there is a necessity for the laws to be given impetus with the current circumstances of the pandemic and the 21st century globalization for total remote operations and mobility.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.