The Companies Act, 2013 and the Secretarial Standards permit board meetings to be held through video conferencing. This allows directors who are in different locations to participate. However, some matters cannot be decided through video conferencing.
The permitted matters
Most routine matters can be decided through video conferencing:
- Approval of financial statements
- Approval of board reports
- Approval of investments
- Approval of borrowing
- Approval of related party transactions, subject to the conditions
The restricted matters
Some matters cannot be decided through video conferencing:
- Approval of the annual financial statements, in some cases
- Matters that require the physical presence of the directors
- Matters that involve the inspection of documents
The restrictions are set out in the Secretarial Standards and the rules.
The compliance requirements
The company must:
- Give notice of the video conference meeting
- Record the proceedings
- Maintain the minutes
- Ensure that the directors can participate effectively
- Follow the Secretarial Standards
The practical points
The company should decide in advance whether the meeting will be physical, video conference or hybrid. The notice should state the mode. The minutes should record the mode and the participation. The company should ensure that the restricted matters are not decided through video conferencing.
Call to Action: We advise companies on video conferencing board meetings and Secretarial Standards compliance. For a board meeting review, contact office@anujdesaiassociates.com, Ph No. 9619456656, Website https://anujdesaiassociates.com, LinkedIn linkedin.com/in/ca-anuj-desai-122547230.