The ongoing Covid-19 pandemic has caused substantial business disruption across all walks of life. In order to alleviate this disruption, regulators across the world have been responding with various measures aimed at ensuring business continuity, whether its in the form of extensions to statutory limitation periods, offering relief to startups, or advisories to employers to not terminate services of their employers.
Activity in corporate boardrooms across the globe have also been affected due to the pandemic. A number of prominent companies had been putting off their board meetings, on account of the prevalent conditions, in an attempt to limit large gatherings. In India, Piramal Enterprises and Future Lifestyle Fashions Limited were just 2 of the companies that cancelled their board meetings that were scheduled to take place recently. Taking into consideration the difficulties faced by companies and to facilitate social distancing while ensuring a modified form of compliance with the Act, the Ministry of Corporate Affairs issued a notification on March 19, 2020 ("Notification"), altering the compliance requirements with respect to the conduct of board meetings via audio-visual means by companies.
The Companies Act, 2013 ("Act") already provided for the conduct of board meetings through audio-visual means for some matters. However, this pandemic has prompted the MCA to provide a relaxation with respect to the few reserved matters (or the Prohibited Matters, discussed later on), where companies earlier could not conduct a board meeting through audio-visual means.
In this Note, we discuss the existing provisions of the Act governing board meetings and how the Notification changes compliance for companies in India.
Originally published 01 April 2020
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