Postal Ballot

11 May 2014 • CS Samrish Bhanja

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Postal Ballot

11 May 2014 • CS Samrish Bhanja

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. 

Applicability

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.

Listed Companies:

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:

  1. Whether any special resolution passed last year through postal ballot – details of voting pattern
  2. Person who conducted the postal ballot exercise
  3. Whether any special resolution is proposed to be conducted through postal ballot
  4. Procedure for postal ballot

8 comments

  1. Query
    Under Rule 22(14) of Chapter 7, resolution by postal ballot deemed to be passed of at a meeting convened in that behalf. In postal ballot , no meeting is convened. Only two dates are there (i) last date of receiving the postal ballot and date of securitinizer handing over the result. a Resolution deemed to be passed when in a meeting result is declared . for the purpose of rule 22(14) which date is taken as a date of meeting ? i.e. the last date of receiving he postal ballot (by which date it is not known that what is the result of postal ballot i.e. passed or not passed ) or date of result when report is received by the Chairman whether resolution passed or or not ? Kindly clarify with support

    1. • Postal ballot -is an additional facility to the actual meetings which a company has to provide in order to improve shareholder participation and awareness. In case actual meeting is convened along with the postal ballot, date of General Meeting shall be deemed to be the date on which the resolution is passed.
      In case there is no actual meeting,: The Resolution, if passed by requisite majority, shall be deemed to have been passed on the last date specified by the company for receipt of duly completed postal ballot forms or e-voting (As per SS-2). Further, we have seen cases where the date of declaration of results by company is taken as date of passing resolution.

  2. Hello Sir,
    Kindly let me know, if currently the regd. office of a company is in Bangalore and the same is to be changed to Gurgaon, then during the proceedings of regd. office change from Bangalore to Gurgaon, can the legal documents like affidavit etc. to be presented before the Regional Director of Hyderabad (Since currently the regd. office is in Bangalore) be taken on the Stamp Paper of Haryana, if the directors of the Company are residing in Bangalore, just because regd. office as on date is in Bangalore and residential addresses of all directors are in Bangalore?

  3. Dear Sir,
    Is under companies act, 2013 filling of Calendar of Events is required or not and if required the under which section and rule, please suggest me.

    thanks & regards
    Vijayandar Shukla

  4. Dear Sir
    First of all thank u very much for resolving my previous queries.

    There is one more query, as per new companies act,2013 there is a requirement under section 180 to take shareholder approval by way of special resolution if, company borrowings exceeds aggregate of paid up share capital and free reserves. In case loan was taken before 12th september and no resolution was passed for private companies , so how i can manage those under new companies act, 2013.

    As there are various group companies, in which this problen is there, kindly suggest me the relevent solution

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