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Companies Act

Postal Ballot and Its Provisions

December 8, 2020 by Team Instabizfilings

Blog Details

‘Postal Ballot’ means voting by post or through any electronic mode.

 

The concept of postal ballot is welcome step. Usually, at an AGM attendance is by a few hundred members. The AGM of some coveting companies are held in remote places, where the registered office of such companies situate. This make it inconvenient for the members to attend in large number. Further, members do not evince much interest in attending AGM.

 

The postal ballot brings the voting at the doorsteps of members. Hence, a very large number of members can conveniently participate in voting on the resolutions of the company.

 

PROVISIONS

It is mandatory for a company to pass resolution by postal ballot in respect of such items of business as the Central Government may, by notifications, declare to be transacted only by means of postal ballot.

 

It is, however, discretionary for a company to pass any resolution by way of postal ballot other than-

1. Ordinary Business items; and

2. Any business in respect of which directors or auditors have a right to be heard at any meeting.

 

It may be noted that One Person Company (OPC) and other companies having members upto 2two hundred are not required to transact any business through postal ballot.Following is the listed of businesses specified by the Central Government, in respect of which the resolutions shall be passed by means of postal ballot only:-

 

1. Alteration of 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 memorandum;

 

2. 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  private company;

 

3. 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;

 

4. Change on objects for which a company has raised money form a public through prospectus and still any unutilized amount out of the money so raised under sub-section (8) of section 13;

 

5. Issue of shares with differential rights as to voting or dividend or otherwise under sub-clause(ii) of clause (a) of section 43;

 

6. Variation in the rights attached to a class of shares or debentures or other securities as specified under section 48;

 

7. Buy-back of shares by a company under sub-section (1) of section 68;

 

8. Election of director under section 151of the Act;

 

9. Sale of the whole or substantially the whole of the undertakings of a company as specified under sub-clause (a) of sub-section (1) of section 180;

 

10. Giving loans or extending guarantee or providing security in excess of the limit specified under sub-section (3) of section 186’

 

It may be noted that Central Government can, at any time, include or delete the items to be transacted through postal ballot only.

 

It may be further noted that aforesaid items of business, required to be transacted by means of postal ballot, may be transacted at a general meeting by a company which is required to provide the facility to members to vote by electronics means under section 108, in the manner provided in that section.

 

PROCEDURE FOR PASSING RESOLUTION BY POSTAL BALLOT 

1. Convene a Board Meeting to pass the resolutions for the following purposes:

> To approve the notice of resolution to be sent to the shareholders;

> To approve the postal Ballot Form; and

> To fix the responsibility for the entire postal ballot on the Company Secretary and a Functional Director.

 

2. A notice setting out the draft of resolution to be passed together with the reasons for passing the resolution should be sent to all the shareholders.

 

3. The company may issue the notices either,-

> under ‘Registered Post’ or ‘Speed Post’; or

> through Courier service; or

> through registered e-mail of the members provided to the company.

 

Further, an advertisement shall also published in a leading English Newspaper and in one vernacular language Newspaper circulating in the State in which registered office of the company is situated, about having dispatched the ballot papers.

 

4. The company may make a note below the notice of the General Meeting for understating of members that the transaction(s) at Sl. No……requires consent of the shareholders through postal ballot.

 

5. The Board of Directors shall appoint one scrutinizers (not being an employee) who, in the opinion of the Board, can conduct the postal ballot voting process in a fair and transparent manner.

 

6. The assent or dissent of the shareholders should be sent within 30 days from the date of posting the notice. The assent or dissent otherwise received after 30 days from the date of issue of notice shall be treated as if reply form the members has not been received.

 

7. The scrutinizers hall submit his report as soon as possible after the last date of receipt of postal ballot, but not later than 7 days thereof.

 

8. The results shall be declared by the Chairman of the meeting. It may be noted that the date of passing of the resolution by postal ballot will be the date of declaration of the postal ballot by the Chairman.

 

9. The resolution should be approved by requisite majority of shareholders, i.e. in the case of ordinary resolution, votes cast in favour is more than vote caste in against it; and in the case of special resolution thee vote caste in favour is three times more than vote caste in against.

 

It may be noted that voting under ‘postal ballot’ is not by show of hands; but shall be with reference to the paid-up value of share capital held by the registered shareholders.

DETAILED CHECKLIST FOR POSTAL BALLOT

Sl. No.

Particulars

Remarks

1

Before Board Meeting activities

> Decide Scrutinizer for Postal Ballot and receive his consent.

> Draft of the Notice, Explanatory statement along with proposed resolution shall be finalized

> Finalize Printer, Dispatcher and Agency to design the Notice, if any. – discuss the time required by them, cost and other procedural work

> Finalize e-voting agency – prepare final documents to be executed with e-voting agency and take confirmation (signing shall be done after Board meeting only)

> Take pre paid envelop permit from Post office for Postal Ballot envelop.

> Discuss with RTA regarding cut off date for Notice and list of Shareholders on cut off date & Voting

> Decide calendar of Events

> Prepare Agenda of the Board Meeting

> Printing of Postal Ballot Envelops, Postal Ballot Form and prepaid envelops can be done before the Meeting

Advance mail to NSDL and CDSL by copying RTA in case record date/cut off date is other than friday)

2

Call a Board Meeting as per section 173  and SS 1 and dispatch Agenda and Notice of the Board Meeting

X-7 (excluding date of BM and date of Notice)

3

Transact the following transaction in the Board Meeting

>  Identify the business to be transacted through Postal Ballot.

> Approve the Notice of the Postal Ballot – Notice shall contain Proposed Resolution and Explanatory Statement

> Authorise Company Secretary or in case of no CS, any director of the Company to

i) conduct the Postal Ballot Process

ii)  sign and send notice along with other documents

> Appoint Scrutinizer for Postal Ballot

> Appoint an agency for e-voting

> Decide record date [cut off] for sending of Notice and ascertaining the eligibility of the members who are entitled to vote.

> Decide calendar of event.

> Authorize Chairman/ or in his absence any other director to receive the

i) scrutinizer’s register

ii) report on postal ballot and other relating documents.

Note: cutoff date can be taken on Friday and the Banpose of shareholders by CDSL & NSDL. It will save the cost of the Company. Some RTA does not charge for the data of shareholders for Postal Ballot subject to the condition that intimation to NSDL and CDSL and RTA given in advance.

X

4

Filing of Necessary form with ROC, if Required

X+30

5

Intimate Stock Exchanges and upload on the website of the Company if any matter is relating to Regulation 30 of SEBI Regulations and Website disclosure under regulation 46.

 within 30 minutes or 24 hours to stock exchange

Upload on website within 24 hours of submission

4

Advance intimate to stock exchange specifying the purpose of record date

Record Date – 7 Working days -1-1

5

> Printing of the Notices along with explanatory statements, Postal ballot Form (Generally 3 days taken it could be exceed)

> Overprinting of details of shareholders by RTA (time taken approx. 24 hours)

> File an application for activating/obtaining EVSN to NSDL/CDSL/evoting agency – (any time after board meeting but before starting of E-voting)

> Obtain details of shareholders from RTA regarding as on cutoff date.

> Provide information to NSDL for sending email Notice to Shareholders atleast one day before the starting of E-voting.

X+5

6

> Send Notice along with relevant documents to Shareholders, Directors, Auditors, and Secretarial Auditors by speed post or Registered Post or by courier or by email (email is to be sent by NSDL/CDSL/RTA).

> Put Notice of Postal Ballot on the Company Website, NSDL/CDSL Website

> Send notice of Postal ballot to stock exchanges pursuant to regulation 30 (within 24 hours from sending of the Notice to shareholders but it could be before sending of the Postal Ballot.

> Put the disclosure made to STXs under regulation 30 on website of the Company (within 24 hours)

X+7 (any other date can be taken but shall be as per schedule of Events)

X+7

X+8

X+9

7

– Advertisement in Newspaper 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, inter alia, the following matters, namely:—

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

(b) the date of completion of dispatch of notices;

(c) the date of commencement of voting;

(d) the date of end of voting;

(e) 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;

(f) 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

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

(Other requirement to be fulfilled as mentioned in the Legal Provisions)

X+8

(Forthwith is mentioned in statutory provisions)

8

> Send Newspaper publication to STXs pursuant to R.30 of SEBI (LODR) (within 24 hours)

> Put the disclosure made to STXs under regulation 30 on website of the Company along with Newspaper Publication

X+9

9

E-voting and Time line for receipt of the Post Ballot

Note: Resolution by postal ballot shall be deemed to be passed on on the last date specified by the company for receipt of duly completed postal ballot forms or e-voting.

Voting shall be open for atleast 30 days.

X+8 to X+38 (Date of Resolution passed)

E-voting can be start on the date of dispatch or next date (its practice)

10

Scrutinizer shall maintain a register of Postal Ballot Forms and other documents

 

11

> The scrutinizer shall submit his report to the Chairman who shall countersign the same.

> Based on the scrutinizer’s report, the Chairman or any other director authorized by him shall declare the result of the postal ballot on the date, time and venue specified in the notice, with details of the number of votes cast for and against the Resolution, invalid votes and the final result as to whether the Resolution has been carried or not.

> Place such result along with the scrutinizer’s report on the website of the Company & evoting agency. [i.e. declaration of result]

> File the copy of the result along with Scrutinizer Report with the Stock Exchanges.

> The result of the voting along with the scrutiniser’s report shall be displayed on the Notice Board of the company at its Registered Office and its Head Office as well as Corporate Office, if any,

 

 

X+38+2

(within 48 hours of last date of receipt of Postal Ballot Form)

12

File necessary ROC forms MGT-14, MR-1 etc, if any.

Date of passing of Resolution + prescribed limit

13

Preparation and signing of minutes

Date of passing of Resoluton+30

14

Return of Postal Ballot and other documents to Chairman by Company Secretary

After signing of Minutes

 


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