Conducting of Board meetings through Video Conferencing (VC)
Every year, all Companies have to conduct at least 4 meetings of its Board and 1 meeting of its Members called Annual General Meeting. These meetings can be conducted either in physical mode or in Video Conferencing/Other Audio Visual Means mode. Earlier, there were restrictions on certain agenda items to be discussed in the Board meeting through Video Conferencing. Those were-
1. Approval of financial statements;
2. Approval of matter relating to merger/amalgamation;
3. Approval of matter relating to takeover/acquisition;
4. Approval of prospectus for issue of shares.
The provisions of Rule 4 of the Companies (Meeting of the Board and its powers) Rules, 2014 barred the Companies to conduct the Board meeting through Video Conferencing for the above mentioned agenda items. However considering the depth of COVID-19 pandemic and restrictions on the movement of persons, the Ministry of Corporate Affairs (MCA) vide its notification dated 15th June, 2021 omitted this rule and provided the Companies an option to conduct its all Board meetings through Video Conferencing irrespective of restricted agenda items mentioned above. By this relaxation, now Companies can approve their financial statements or matter relating to merger/amalgamation/takeover in a meeting held through Video Conferencing. However, this relaxation is not obligatory but optional to the Companies. The Companies can still conduct meetings through physical mode.
Along with this relaxation, the responsibility of the Company’s management increases. If Company proposes to conduct any Board meeting through Video Conferencing, it has to maintain video recording of the same as a proof of actual conduction of the meeting.
Some of the advantages of meeting through Video Conferencing are-
1. Physical presence of Directors at the venue of the meeting is not required;
2. Attendance to the meeting from any part of the world;
3. Saving of time and travelling cost.
In this regard, the Companies should think positively about holding of Board meetings through Video Conferencing subject to compliance of MCA rules.
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