Friday, December 30, 2016

A to Z about Postal Ballot

A to Z about Postal Ballot

A company shall transact the following business only by means of voting through a postal ballot as notified in Rule 22 of Companies (Management and Administration) Rules, 2014:

a.   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;

b.   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;

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 unutilised amount out of the money so raised;

e.   Issue of shares with differential rights as to voting or dividend or otherwise;

f.    Variation in the rights attached to a class of shares or debentures or other securities;

g.   Buy-back of shares by a company;

h.   Election of a director by small shareholders;

i.     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;

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

A company may transact any item of business through postal ballot other than ordinary business and any business wherein the 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 meeting convened in that behalf.

One Person Company and other companies having members up to two hundred are not required to transact any business through postal ballot.

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 therefore and requesting them to send their assent or dissent in writing on a postal ballot by post or through electronic means within 30 days from the date of dispatch of the notice.

2) The notice shall be sent either by:-

a.   Registered Post or speed post, or

b.   Electronic means like registered e-mail, or

c.   Courier service.

3) 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 in English language in 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.

4) The notice of the postal ballot shall also be placed on the website of the company after the notice is sent to the members and shall remain on such website till the last date for receipt of the postal ballots from the members.

5) The Board of Directors shall appoint one scrutiniser who is willing to be appointed as such. He should not be in employment of the company and should in the opinion of the Board be able to conduct the postal ballot voting process in a fair and transparent manner.

6) Postal ballot received shall be kept in the safe custody of the scrutiniser till the chairman considers, approves and signs the minutes. No person shall deface or destroy the ballot paper or declare the identity of the shareholder.

7) The scrutiniser shall submit his report as soon as possible within 7 days of the last date of receipt of postal ballots;

8) The scrutiniser 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.

9) The scrutiniser 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.

10) 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.

11) The results shall be declared by placing it, along with the scrutiniser’s report, on the website of the company.

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

13) The provisions of rules regarding voting by electronic means shall apply, as far as applicable, mutatis mutandis to this rule in respect of the voting by electronic means.

Courtesy -Bombay Chartered Accountants’ Society

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