Passing a resolution through Postal Ballot (E-Voting) offers a convenient alternative for companies to obtain shareholder consent without convening a general meeting. This method, governed by various provisions of the Companies Act 2013, involves meticulous procedures to ensure transparency and compliance.
Passing a resolution through Postal Ballot (E-Voting) and a Step by step procedure of Postal Ballot
1. What is Postal Ballot?
According to Section 2(65) of the Companies Act, 2013 “postal ballot” means voting by post or through any electronic mode. It includes voting by shareholders by postal or electronic mode instead of voting personally for transacting businesses in a general meeting of the company.
In general, Postal Ballot is an alternative to pass a resolution to achieve the consent of shareholders of the company without calling general meeting.
2. Provisions dealing with Postal Ballot
a) Section 2 (65)
b) Section 110 of the Companies Act 2013
c) Rule 22 of the Companies (Management and Administration) Rules, 2014
d) Part 16 of SS-2
e) Section 108 read with Rule 20 of the Companies (Management and Administration) Rules, 2014
Section 110 of the Companies Act 2013 read with Rule 22 of the Companies (Management and Administration) Rules, 2014
1. Company can pass a resolution through postal ballot except the matter as mentioned below: –
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- Ordinary Business and
- Any business in respect of which directors or auditors have a right to be heard at any meeting.
2. Following are the matters that shall be conducted through Postal Ballot:
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- 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;
- alteration of AOA 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;
- 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;
- Issue of shares with differential rights as to voting or dividend or otherwise;
- Variation in the rights attached to a class of shares or debentures or other securities;
- Buy-back of shares by a company
- Election of a small shareholder’s director as per section 151;
- Sale of the whole or substantially the whole of an undertaking of a company;
- Giving loans or extending guarantee or providing security exceeding 60% of its paid up share capital, free reserves and securities premium account or 100% of its free reserves and securities premium account;
Provided that any aforesaid items of business under this sub-rule, 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 electronic means under section 108, in the manner provided in that section
Provided further that One Person Companies and other companies having members upto 200 are not required to transact any business through postal ballot
Procedure for Conducting Postal Ballot
1. Notice of Board Meeting Shall be sent as per Section 173 read with SS-1.
2. Prior Intimation of Board Meeting shall be sent to Stock Exchange as per Regulation 29 of SEBI (LODR) 2015 (PDF and XBRL)
3. Co-ordinate with RTA and complete the formalities for receiving benpos of cut-off date.
4. Conduct Board Meeting for: –
- Appointment of Scrutinizer and taken on note the consent received from Scrutinizer.
- Deciding Cut-off date for Sending notice to shareholders.
- Appointment of E-Voting Agency (CDSL) for facilitating the e-voting process for the postal ballot
- Approve the Draft Notice of Postal Ballot incorporating the proposed resolution(s) and explanatory statement
- Authorize the Company Secretary or where there is no Company Secretary, any Director of the company to conduct postal ballot process and sign and send the Notice along with other documents;
5. Outcome of Board Meeting to be filled to Stock Exchange as per Regulation 30 of SEBI (LODR) 2015 (PDF)
6. Filling MGT-14 with ROC within 30 days of passing Board Resolution (if such matter falls under section 179 (3) of the Companies Act, 2013)
7. Generate the EVSN and send the Notice of Postal Ballot and Final Cut-off date to RTA and E-voting Agency (CDSL/NSDL) for their processing.
8. Request Benpos (List of Shareholders) of cut-off date from RTA.
9. Confirm and approve the EVSN on CDSL/NSDL Portal
10. Dispatch of Postal Ballot Notice to all the shareholders, Notice shall contain following:
- Notice of the postal ballot shall be given in writing to every Member of the company. Such Notice shall be sent either by registered post or speed post, or by courier or by e-mail or by any other electronic means at the address registered with the company.
- Such Notice shall also be given to the Directors and Auditors of the company, to the Secretarial Auditor, to Debenture Trustees, if any, and, wherever applicable or so required, to other specified recipients.
- Notice shall describe clearly the e-voting procedure.
- Notice shall also clearly specify the date and time of commencement and end of e-voting.
- Notice shall specify the day, date, time and venue where the results of the voting by postal ballot will be announced and the link of the website where such results will be displayed. Notice shall also specify the mode of declaration of the results of the voting by postal ballot.
- Notice shall clearly describe the E voting procedure.
11. Upload the Postal Ballot Notice on website of the Company forthwith after the notice is sent to the members.
12. Upload copies of Postal Ballot Notice to Stock Exchanges (XBRL)
13. Publication of Notice of Postal Ballot in newspaper (1in vernacular and in English language having wide circulation in the district where registered office of the Company is situated.). The advertisement shall specify the following matters, namely:-
- A statement to the effect that the business is to be transacted by postal ballot which includes voting by electronic means;
- The date of completion of dispatch of notices;
- The date of commencement of voting (postal and e-voting);
- The date of end of voting (postal and e-voting);
- The statement that any postal ballot form received from the Member after thirty days from the date of dispatch of Notice will not be valid;
- A statement to the effect that members, who have not received postal ballot forms may apply to the company and obtain a duplicate thereof;
- The Contact details of the person responsible to address the grievances/queries connected with the voting by postal ballot including voting by electronic means; and
- Day, date, time and venue of declaration of results and the link of the website where such results will be displayed.
Notice and the advertisement shall clearly mention the cut-off date as on which the right of voting of the Members shall be reckoned and state that a person who is not a Member as on cut-off date should treat this Notice for information purposes only.
14. Intimation of Newspaper adv. shall be filled to BSE.
15. Upload the Newspaper Adv. on the website of the Company
16. E-voting Start date and E-voting End date shall be determined (E-voting shall remain open for 30 days as mentioned in the Notice of Postal Ballot)
17. The assent or dissent received after thirty days shall be treated as if reply from the member has not been received
18. Outcome of Postal Ballot shall be filled after end of E-voting.
19. The scrutinizer shall maintain the register either manually or electronically for recording the assent or dissent mentioning the particulars as required.
20. Submission of Report by Scrutinizer within 7 days from last date of receipt of Postal Ballot.
21. Such Voting result as received from Scrutinizers to be submitted to Stock Exchange (XBRL)
22. Voting Result to be uploaded on CDSL/NSDL and Companies website.
23. 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.
24. File MGT-14 within 30 days if resolution passed through Special Resolution.
25. Resolutions passed by postal ballot shall be recorded in the Minutes book (as per SS-2 17.1.2).
Conclusion: Passing resolutions through postal ballot (E-voting) streamlines decision-making processes for companies while ensuring shareholder participation and compliance with regulatory requirements. By adhering to the prescribed legal provisions and procedural steps, companies can effectively conduct postal ballot exercises with transparency and integrity, thereby upholding corporate governance standards.
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Author: CS Mangesh Deshpande | E-mail: [email protected]
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