Special resolution by postal ballot or not?
This query is : Open
22 September 2011
i am now doing an audit of a listed company and they have passed a Special resolution in GM for making loans,guarantee, security to another company exceeding the limits specified in S.372A. My query is are they supposed to pass SR via postal ballot & is the SR to incorporated in the comapny's AOA which does not specify anything about investment,Loans,guarantees etc in other company.
22 September 2011
Section 372A provides that obtaing approval from shareholders by postal ballot is allowed only if the following two conditions are fulfilled:
1. The company is a listed company.
2. The business to be transacted is that of loans and advances.
Since the above conditions are satisfied, the company is correct in passing a special resolution by ballot.
1. The company is a listed company.
2. The business to be transacted is that of loans and advances.
Since the above conditions are satisfied, the company is correct in passing a special resolution by ballot.
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22 September 2011
Dear Siddhartha,
The company has passed a SR in General meeting..
How to ratify...
What are the consequences?
The company has passed a SR in General meeting..
How to ratify...
What are the consequences?
22 September 2011
Passing a special resolution by postal ballot is not mandatory. It is an option given to a listed company keeping in mind the large number of shareholders.
If the SR is passed in a general meeting, it fully complies with the provisions of Section 372A.
There is no need for ratification.
If the SR is passed in a general meeting, it fully complies with the provisions of Section 372A.
There is no need for ratification.
22 September 2011
i don't think its correct because the section 372A says it is mandatory to pass resolution by postal ballot in case the limits are exceeded......
So plz help me in ratification procedures..
So plz help me in ratification procedures..
22 September 2011
The first proviso to Section 372A reads as under:
Provided that where the aggregate of the loans and investments so far made, the amounts for which guarantee or
security so far provided to or in all other bodies corporate, along with the investment, loan, guarantee or security
proposed to be made or given by the Board, exceeds the aforesaid limits, no investment or loan shall be made or
guarantee shall be given or security shall be provided unless previously authorised by a special resolution passed in a
general meeting
It is very clear that the resolution is to be passed in a general meeting. Postal ballot is an option given to a listed company.
If you have any material to the contrary kindly share.
Provided that where the aggregate of the loans and investments so far made, the amounts for which guarantee or
security so far provided to or in all other bodies corporate, along with the investment, loan, guarantee or security
proposed to be made or given by the Board, exceeds the aforesaid limits, no investment or loan shall be made or
guarantee shall be given or security shall be provided unless previously authorised by a special resolution passed in a
general meeting
It is very clear that the resolution is to be passed in a general meeting. Postal ballot is an option given to a listed company.
If you have any material to the contrary kindly share.
22 September 2011
please see this link...
http://legalserviceindia.com/article/l299-Section-372A-of-the-Companies-Act.html
checkout point no 4...."SHALL"
http://legalserviceindia.com/article/l299-Section-372A-of-the-Companies-Act.html
checkout point no 4...."SHALL"
22 September 2011
With all respect Sir, that is an article written by an author.
Kindly give me an extract from the law.
The provision I have stated above is as written in the Act.
Kindly share with me any material you have on this topic.
Thank you.
Kindly give me an extract from the law.
The provision I have stated above is as written in the Act.
Kindly share with me any material you have on this topic.
Thank you.
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