The Ministry of Corporate Affairs ("MCA") in May, 2022, published various notifications and circulars in relation to video conferencing permissions vis-à-vis annual general meetings ("AGMs") and extraordinary general meetings ("EGMs"), the Companies (Prospectus and Allotment of Securities) Amendment Rules, 2022 and the Companies (Share Capital and Debentures) Amendment Rules, 2022.
The key details of the notifications are stated below:
- General Circular No. 2/20221dated May 5, 2022, has allowed companies whose AGMs are due in the year 2022, to conduct their AGMs on or before December 31, 2022 through video conference or other audio visual means in accordance with the requirement stipulated under paras 3 and 4 of the General Circular No. 20/20202 dated May 5, 2020. It has been further clarified that the said circular should not be construed as an extension of timelines for holding of AGMs by companies as prescribed under the Companies Act, 2013. The companies will continue to comply with the applicable timelines for holding the AGMs and any non-adherence with the timelines would be subject to applicable liabilities.
- General Circular No. 3/20223 dated May 5, 2022, has allowed companies to conduct their EGMs through video conference or other audio visual means or transact items through postal ballot (as per the prescribed framework) up to December 31, 2022.
- Under notification no. S.R. 338(E)4, the MCA notified the
Companies (Prospectus and Allotment of Securities) Amendment Rules,
2022 which has the effect of amending the Companies (Prospectus and
Allotment of Securities) Rules, 2014 as under:
- After the fourth proviso of rule 14(1), a new proviso has been added which stipulates that no offer or invitation of any securities under the above Rules will be made to a body corporate incorporated in, or a national of, a country which shares a land border in India, unless such body corporate or the national have obtained Government approval under the Foreign Exchange Management (Non-debt Instrument) Rules, 2019 and attached the approval with the private placement offer cum application letter; and
- a new field has been inserted in Part B of the Annexure to Form PAS-4 in order to enforce the requirement as detailed under paragraph 3(a) above.
- Under notification no. G.S.R. 335(E)5, the MCA notified the Companies (Share Capital and Debentures) Amendment Rules, 2022 which has the effect of amending the Companies (Share Capital and Debentures) Rules, 2014 wherein, in the Annexure to Form SH-4 (before the enclosures), a prescribed declaration in relation to the requirement of government approval under the Foreign Exchange Management (Non-debt Instrument) Rules, 2019 prior to the transfer of shares has been inserted. It is mandatory to comply with the aforesaid declaration and confirm whether the government approval is required or not for transfer of shares and if required, a copy of the approval is required to be annexed.
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