Amid the coronavirus pandemic, MCA amended new rules shifting from physical board meetings to meeting through virtual mode. MCA has amended the Companies (Meetings of Board and its Powers) Rules, 2014, omitting Rule 4 by Companies (Meetings of Board and its Powers) Amendment Rules, 2021 vide MCA Notification dated 15th June 2021.
To curb the difficulties for corporates to conduct Board meetings during an outbreak of the Covid pandemic, MCA had granted relaxation from the above restriction in a phased manner up to June 30, 2021. Now the said restriction is permanently deleted.
Rule 4 of Companies (Meetings of Board and its Powers) Rules, 2014 related to restriction of conducting Board Meeting through Video Conferencing/Other Audio-Visual Means for selected agenda items.
In Rule 4 there are those matters not to be dealt with in a meeting through video conferencing or other audio-visual means-
(i) the approval of the annual financial statements;
(ii ) the approval of the Board’s report;
(iii) the approval of the prospectus;
(iv) the Audit Committee Meetings for consideration of financial statement including consolidated financial statement, if any, to be approved by the Board under sub-section (1) of Section 134 of the Act; and
(v) the approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.
Due to the COVID pandemic, MCA granted relaxation for conduction meeting through VC till 30th June 2021, which now permanently allows virtual resolutions on matters referred in rule 4. Boards of Directors of the Companies can now approve annual financial statements, Board’s report, Prospectus and matters related to mergers, amalgamations, at meetings held through video conferencing and other audio-visual means. No physical presence of director is required more.
This step would go a long way in ensuring that the hurdles faced by companies are reduced and business can be carried on smoothly with the aid of technology. Permitting audio-visual means for all matters will also enable companies to fulfil compliances promptly and will thereby ease the pressure on stakeholders.
For video, refers YouTube Link https://youtu.be/80Y3bP6t0Rw