Postal Ballot under Companies Act (Updated till latest revisions)

POSTAL BALLOT UNDER COMPANIES ACT 2013

Section 110 of the Companies Act 2013 governs the provisions relating to postal ballot of the company.

A detailed analysis is done below for a better understanding of the said provisions under the Companies Act 2013.

Business to be transacted mandatorily only by means of postal ballot

Alteration of the objects clause of the memorandum In the case of the company in existence immediately before the commencement of the 2013 Act, alteration of the main objects of the memorandum Alteration of articles of association in relation to insertion or removal of provisions which, under sub section (68) of section 2, are required to be included in the articles of a company in order to constitute it a private company. Change in place of registered office outside the local limits of any city, town or village as specified in sub section (5) of section 12 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 under sub section (8) of section 13 Issue of shares with differential rights as to voting or dividend or otherwise under sub-clause (ii) of clause (a) of section 43 Variation in the rights attached to a class of shares or debentures or other securities as specified under section 48. Buy back of shares by a company under sub section (i) of section 68 Election of a director under section 151 Sale of the whole or substantially the whole of an undertaking of a company as specified under sub-clause (a) of sub section (1) of section 180 Giving loans or extending guarantee or providing security in excess of the limit specified under sub-section (3) of section 186

Certain companies are not required to transact any business through postal ballot

One person company and Other companies having members upto 200

Option to transact any item of business through postal ballot	A company may, in respect of any item of business transact by means of postal ballot, except the following; a)      Ordinary business and b)      Any business in respect of which directors or auditors have a right to be heard at any meeting.
Deemed to be duly passed at a general 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 meeting convened in that behalf.

PROCEDURE FOR CONDUCTING  BUSINESS THROUGH POSTAL BALLOT

i)                    Notice shall be sent to all the shareholders along with a draft resolution explaining the reasons therefor.

ii)                  The notice should state that the assent or dissent in writing on postal ballot shall be sent within a period of 30 days from the date of dispatch of the notice.

iii)                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 30 days.

iv)                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 is situate and at least once in English language in a English news paper having wide circulation in that district.

v)                  The advertisement shall specify the following matters;

Ø  the date of dispatch of the ballot papers

Ø  a statement to the effect that the business is to be transacted  by postal ballot which includes voting by electronic means

Ø  the date of commencement of voting

Ø  the date of end of voting

Ø  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

Ø  a statement to the effect that members, who have not received postal ballot forms may apply to the company and obtain a duplicate thereof; and

Ø  contact details of the person responsible to address the grievances connected with the voting by postal ballot including voting by electronic means.

 Display on the website

Ø  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.

Ø  Such notice shall remain on such website till the last date for receipt of the postal ballots from the members

Scrutinizer

Ø  The Board shall appoint one scrutinizer, who is not in employment of the company and who, in the opinion of ht Board can conduct the postal ballot voting process in a fair and transparent manner.

Ø  The scrutinizer shall be willing to be appointed and be available for the purpose of ascertaining the requisite majority

Custodian of postal ballot papers

Ø  Postal ballot received back from the shareholders shall be kept in the safe custody of the scrutinizer

Ø  After the receipt of the 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

Report & Register

Ø  The scrutinizer shall submit his report as soon as possible after the last date of receipt of postal ballots but not later than 7 days thereof.

Ø  The scrutinizer shall maintain a register either manually or electronically to record their assent or dissent received.

Ø  The register should mention the names of the shareholders, 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.

Scrutinizer’s custodial responsibility

Ø  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.

Ø  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.

Assent or dissent after 30 days

Ø  The assent or dissent received after 30 days from the date of issue of notice shall be treated as if reply from the member has not been received

Declaration of results

Ø  The results shall be declared by placing it, along with the scrutinizer’s report, on the website of the company

Ø  The resolution shall be deemed to be passed on the date of at a meeting convened in that behalf.

CS Balaji G

Company Secretary