Postal Ballot under Companies Act, 2013
kiran mukadam
- Jun
- 13
- 2014
Postal Ballot under Companies Act, 2013
CS M. Kurthalanathan
Postal Ballot under Companies Act,2013
Section 110 of the Companies Act,2013 and Rule 22 of the Companies (Management and Administration ) Rules,2014deals with Postal Ballot.
Postal Ballot – Business:
A company shall transact the following business only by means of Postal Ballot;
| Section | Description |
| 13 | Alteration of the objects clause of the memorandum and in the case of the company in existence immediately before the commencement of the Act, alteration of the main objects of the memorandum |
| 2 (68) | Alteration of articles of association in relation to insertion or removal of provisions which are required to be included in the articles of a company in order to constitute it a private company |
| 12(5) | Change in place of registered office outside the local limits of any city, town or village. |
| 13(8) | Change in objects for which a company has raised money from public through prospectus and still has any unutilized amount out of the money so raised |
| 43(a)(ii) | Issue of shares with differential rights as to voting or dividend or otherwise |
| 48 | Variation in the rights attached to a class of shares or debentures or other securities |
| 68(1) | Buy-back of shares by a company |
| 151 | Election of a director |
| 180(1)(a) | Sale of the whole or substantially the whole of an undertaking of a company |
| 186(3) | Giving loans or extending guarantee or providing securityin excess of the limit |
A company may transact any other business by postal ballot instead of transacting at a general meeting except:
- ordinary business and
- any business in respect of which directors or auditors have a right to be heard at any meeting.
If a resolution is assented to by the requisite majority of the shareholders by means of postal ballot, it shall be deemed to have been duly passed at a general meetingconvened in that behalf.
Procedure to be followed for conducting Postal Ballot:
Notice to Shareholders:
Where a company is required or decides to pass any resolution by way of postal ballot, it shall send a notice to all the shareholders, along with a draft resolution explaining the reasons there for and requesting them to send their assent or dissent in writing on a postal ballot because postal ballot means voting by post or through electronic means within a period of 30 days from the date of dispatch of the notice.
Mode of dispatch:
The notice shall be sent either :
- by Registered Post or speed post, or
- through electronic means like registered e-mail id or
- through courier service for facilitating the communication of the assent or dissent of the shareholder to the resolution within the said period of thirty days.
Publish advertisement:
An advertisement shall be published at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated, and having a wide circulation in that district, and at least once in English language in an English newspaper having a wide circulation in that district, about having dispatched the ballot papers and specifying therein.
Details of Advertisement:
- a statement to the effect that the business is to be transacted by postal ballot which includes voting by electronic means;
- the date of completion of dispatch of notices;
- the date of commencement of voting;
- the date of end of voting;
- the statement that any postal ballot received from the member beyond the said date will not be valid and voting whether by post or by electronic means shall not be allowed beyond the said date;
- a statement to the effect that members, who have not received postal ballot forms mayapply to the company and obtain a duplicate thereof; and
- contact details of the person responsible to address the grievances connected with the voting by postal ballot including voting by electronic means.
Place notice on website:
The notice of the postal ballot shall also be placed on the website of the company forthwith after the notice is sent to the members and such notice shall remain on such website till the last date for receipt of the postal ballots from the members.
Appoint Scrutinizer:
The Board of directors shall appoint one scrutinizer, who is not in employment of the company and who, in the opinion of the Board can conduct the postal ballot voting process in a fair and transparent manner.
Obligation of Scrutinizer:
- The scrutinizer shall be willing to be appointed and be available for the purpose of ascertaining the requisite majority.
- Postal ballot received back from the shareholders shall be kept in the safe custody of the scrutinizer and after the receipt of assent or dissent of the shareholder in writing on a postal ballot, no person shall deface or destroy the ballot paper or declare the identity of the shareholder
- The scrutinizer shall submit his report as soon as possible after the last date of receipt of postal ballots but not later than seven days thereof
- The scrutinizer shall maintain a register either manually or electronically to record their assent or dissent received, mentioning the particulars of name, address, folio number or client ID of the shareholder, number of shares held by them, nominal value of such shares, whether the shares have differential voting rights, if any, details of postal ballots which are received in defaced or mutilated form and postal ballot forms which are invalid.
- The postal ballot and all other papers relating to postal ballot including voting by electronic means, shall be under the safe custody of the scrutinizer till the chairman considers, approves and signs the minutes and thereafter, the scrutinizer shall return the ballot papers and other related papers or register to the company who shall preserve such ballot papers and other related papers or register safely.
- The assent or dissent received after thirty days from the date of issue of notice shall be treated as if reply from the member has not been received.
- The results shall be declared by placing it, along with the scrutinizer’s report, on thewebsite of the company.
The resolution shall be deemed to be passed on the date of at a meeting convened in that behalf.
The provisions of rule 20 regarding voting by electronic means shall apply, as far as applicable, mutatis mutandisto this rule in respect of the voting by electronic means.
Postal Ballot – Companies Act,1956 Vs Companies Act,2013:
| Companies Act,1956 | Companies Act,2013 |
| Section 192A of the 1956 Act deals with Postal Ballot | Section 110 of the 2013 act deals with Postal Ballot |
| It applies only to listed public companies | It applies to all companies |
Exemptions:
- One Person Company and
- other companies having members up to two hundred
are not required to transact any business through postal ballot
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Though utmost efforts has made to provide authentic information, it is suggested that to have better understanding kindly cross-check the relevant sections, rules under the Companies Act,2013
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