Postal ballot means voting by post or through any electronic mode.(Sec2(65) of the CA 2013)
Earlier, Section 192A of the Companies Act, 1956, read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2001 (the Rules) obligated the listed companies to conduct certain businesses only by way of postal ballot.
Postal Ballot is now applicable to all companies except One Person Company and other companies having members upto two hundred. (Proviso to Rule 22 of chapter 7)
The following items of business shall be transacted only by means of voting through a postal ballot (Section 110(1)(a) of the Act read with Rule 22(16) of Companies (Management and Administration) Rules, 2014).
(a) alteration of the objects clause of the memorandum;
(b) 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;
(c) change in place of registered office outside the local limits of any city, town or village;
(d) change in objects for which a company has raised money from public through prospectus and still has any unutilized amount;
(e) issue of shares with differential rights;
(f) variation in the rights attached to a class of shares or debentures or other securities;
(g) buy-back of shares;
(h) election of small shareholders director (applicable to listed company);
(i) sale of the whole or substantially the whole of an undertaking;
(j) giving loans or extending guarantee or providing security in excess of the limit (specified under sub-section (3) of section 186):
Procedure to be followed for conducting business through postal ballot.-
(1) 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 thereof 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 thirty days from the date of dispatch of the notice.
(2) The notice shall be sent either (a) by Registered Post or speed post, or (b) through electronic means like registered e-mail id or (c) through courier service
(3) An advertisement shall be published at least once in a vernacular newspaper and at least once in English language in an English newspaper about having dispatched the ballot papers and specifying various details as prescribed in the rules.
(4) The notice of the postal ballot shall also be placed on the website of the company
(5) The Board of directors shall appoint one scrutinizer,
(6) If a resolution is assented to by the requisite majority of the shareholders it shall be deemed to have been duly passed at a general meeting convened in that behalf.
(7) The scrutinizer shall submit his report within seven days after the last date of receipt of postal ballots;
(8) The results shall be declared by placing it, along with the scrutinizer’s report, on the website of the company.
(9) The resolution shall be deemed to be passed on the date of at a meeting convened in that behalf.
In addition to the above mentioned businesses, SEBI (Buy Back of Securities) Regulations, 1998, SEBI (Delisting of Equity Shares) Regulations, 2009, SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 also provide some business for which postal ballot is mandatory.
Clause 49 of the Listing Agreement also suggests, among others, the following information to be included in the Report on Corporate Governance in the Annual Report of Companies under the heading – General Body meetings: