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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 business in a general meeting. The concept of Postal Ballot is a unique provision which gives shareholders the right to vote on items of business of a corporate body without actually attending its general meetings either personally or through their proxies/representatives.

Applicable Provisions

Section 110 of the Companies Act, 2013 read with Rule 22 of the Companies (Management and Administration) Rules, 2014 and SS-2 (Secretarial Standard on General Meeting).

Applicability

Listed Companies and every other Public Company having members more than 200. The companies which are listed on SME exchange and Institutional Trading platform are not included.

One Person Companies and other companies having member upto 200 are not required to transact any business through postal ballot.

The items which are ordinary in business and any business, in respect of which Directors or auditors have a right to be heard at any meeting, are not transacted by postal ballot.

If any item which is requires to be transacted by Postal Ballot, may be transacted at General Meeting by Companies which has provided E-voting facility to its members.

If a resolution is assented by the requisite majority of the shareholders postal ballot, it shall be deemed to have been duly passed at a general meeting.

All about Postal Ballot

Following are the items of business that shall be transacted only by Postal Ballot

1

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.

2

Alteration of articles of association in relation to insertion or removal of provisions under section 2(68) are required to be included in the articles of a company

3

Change in place of registered office outside the local limits of any city, town or village under section 12(5).

4

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 under section 13(8).

5

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

6

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

7

Back of shares of company under section 68.

8

Election of small shareholder director under section 151.

9

Sale of the whole or substantially the whole of an undertaking of a company as specified under section 180(1)(a)

10

Giving loans or extending guarantee or providing security in excess of the limit specified under section 186(3)

 

Procedure for making voting through postal ballot

Steps

Particulars

I

Company shall sent notice to all the shareholders, along with draft resolution, and also request them to provide their assent and dissent in writing on a postal ballot within 30 days from the dispatch of the Notice.

Only Members as of the record date shall be entitled to vote on the proposed Resolution by postal ballot.

II

The notice shall be sent either by:

(a) Registered Post or speed post, or

(b) through electronic means like registered e-mail id or

(c) through courier service for facilitating the communication of the assent

III

An advertisement shall also be published at least once in a vernacular newspaper where the Registered office of the company is situated and at least once in the English language in an English newspaper having wide circulation and specifying the following matters:

a statement to the effect that the business is to be transacted by postal ballot which includes

(a) Voting by electronic means;

(b) Date of completion of dispatch of notices;

(c) Date of commencement of voting;

(d) 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) 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.

IV

The notice of the postal ballot shall also be placed on the website of the company.

V

The Board of directors shall appoint one scrutinizer, who is not in employment of the company who can conduct the postal ballot voting process in a fair and transparent manner.

VI

Postal ballot received back from the shareholders shall be kept in the safe custody of the scrutinizer and after the receipt of assent or dissent of the shareholder in writing on a postal ballot, no person shall deface or destroy the ballot paper or declare the identity of the shareholder.

VII

The scrutinizer shall submit his report as soon as possible after the last date of receipt of postal ballots but not later than 7 days thereof;

VIII

The scrutinizer 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, the 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.

IX

The postal ballot and all other papers relating to postal ballot including voting by electronic means, shall be under the safe custody of the scrutinizer till the chairman considers, approves and signs the minutes and thereafter, the scrutinizer 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.

X

The assent or dissent received after 30 days from the date of issue of notice shall be treated as if reply from the member has not been received.

XI

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

A postal ballot form shall be considered invalid if

  1. A form other than one issued by the company has been used;
  2. It has not been signed by or on behalf of the Member;
  3. Signature on the postal ballot form doesn’t match the specimen signatures with the company
  4. It is not possible to determine without any doubt the assent or dissent of the Member;
  5. Neither assent nor dissent is mentioned;
  6. Any competent authority has given directions in writing to the company to freeze the Voting Rights of the Member;
  7. The envelope containing the postal ballot form is received after the last date prescribed;
  8. The postal ballot form, signed in a representative capacity, is not accompanied by a certified copy of the relevant specific authority;
  9. It is received from a Member who is in arrears of payment of calls;
  10. It is defaced or mutilated in such a way that its identity as a genuine form cannot be established;
  11. Member has made any amendment to the Resolution or imposed any condition while exercising his vote.
  12. A postal ballot form which is otherwise complete in all respects and is lodged within the prescribed time limit but is undated shall be considered valid.
 

Rescinding the Resolution

A Resolution passed by postal ballot shall not be rescinded otherwise than by a Resolution passed subsequently through postal ballot. No amendment or modification shall be made to any Resolution circulated to the Members for passing by means of postal ballot.

POSTAL BALLOT FORM

XYZ LIMITED
Registered Office
POSTAL BALLOT FORM

1. Name(s) of Shareholder(s) : (in ................................................................ block letters) 

(including joint holders, if any)................................

2. Registered address of the Sole/First named Shareholder: ................................

3. Folio No./DP ID No./Client ID No.* (*Applicable to investors holding shares in dematerialized form) : ................................

4. Number of shares held: ................................

5. I/We hereby exercise my/our vote in respect of the Ordinary/Special Resolution to be passed through Postal Ballot for the business stated in the Notice of the Company by conveying my/our assent or dissent to the said Resolution by placing the tick ( ) mark in the appropriate box below.

Item No.

Description

No. of Shares

   

I/We assent to the Resolution

I/We dissent the

Resolution

       

(1)

     

(2)

     
       

Place: ................................
Date: ................................ (Signature of the Shareholder)

DISCLAIMER: The above-mentioned article has been based on relevant provisions of Companies Act, 2013. Under no circumstance, the author shall not liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.

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Published by

CS Nitika Gupta
(Practicing Company Secretary)
Category Corporate Law   Report

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