At the hight of the cold wave at New Delhi, Ministry of Corporate Affairs suddenly awakens to issue two circulars within hours. We have an interesting observation: the first one published a regular font Arial/Times New Roman (who cares the font) but second used a font called – Comic Sans MS. Use of the font in a law communication communicates. We will read this circular in this post.
The circular may use simpler language. Without a straightforward acknowledgement of the fact, many companies could not convene their Annual General Meeting due to be held in calendar 2020 it provide a bit of relief.
The circular applies to companies whose Annual General Meetings:
- Were due to be held in the year 2020 (but could not be conducted due to whatsoever reason); or
- Become due in the year 2021.
The Government decided to allow these companies to conduct their meetings on or before 31 December 2021.
The circular clarifies that such Annual General Meetings may be conducted in accordance with Circular 20/2020. The Circular 20/2020 allows companies to conduct Annual General Meetings through Video Conferencing or any other audiovisual mode.
The first paragraph of the circular may create two confusions:
a. Due date for the Annual General Meeting for Annual General Meeting legally due to be held any time during the year 2020 is extended till 31 December 2021.
b. Due date for the Annual General Meeting for Annual General Meeting legally due to be held any time during the year 2021 is extended till 31 December 2021.
This possible misinterpretation immediately clarified in the second paragraph.
The second paragraph clarifies that no extension is allowed. All these companies should follow legal time-limits or face legal actions.
We consider the circular as an indication of the government understanding of difficulties faced by companies. Same time it clarifies that no extension is coming for AGM missed 31 December 2020 deadline.
Secondly, the Government is planning a few announcements in the Budget speech.
The most important take away from the circular is hidden advice: Companies should not take the risk for the year 2021.
According to the law, any company which missed legal timeline in the year 2020 may opt for compounding but repeated miss in the year 2021.
I hope the Government will compound the offence of not holding Annual General Meeting timely during the year 2020 with ease.
Government bless us.
[P.S.: I have no interpretation of the font used.]
Aishwarya Mohan Gahrana
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