Postal Ballot Usage in Public Limited Companies

Introduction
A postal ballot is a method of voting in which shareholders of a Public Limited Company cast their votes through mail or electronic means instead of attending a physical general meeting. It is particularly useful for companies with a large and geographically dispersed shareholder base. Introduced to promote transparency and wider participation, postal ballots are governed by Section 110 of the Companies Act, 2013, and the Companies (Management and Administration) Rules, 2014. This article outlines the significance, procedures, and legal compliance related to postal ballot usage in Public Limited Companies.

Meaning and Purpose of Postal Ballot
Postal ballot refers to voting conducted by postal or electronic means (e-voting) on specific resolutions circulated to shareholders. It is used to seek shareholders’ approval without calling a general meeting. This mechanism ensures shareholder participation in key decisions while maintaining cost-efficiency and operational ease.

Resolutions Requiring Postal Ballot
According to the Companies Act and SEBI guidelines, certain items must be passed only through postal ballot in Public Limited Companies. These include:

• Alteration of object clause in the Memorandum of Association
  
• Change in the place of the registered office outside city limits
  
• Sale or disposal of undertaking under Section 180
  
• Issuance of shares with differential rights
  
• Buyback of shares
  
• Appointment of directors under Section 151 (small shareholders’ director)
  
• Other matters prescribed by the central government
  

These resolutions cannot be passed at a physical meeting unless exempted by the rules.

E-Voting Mandate for Listed Companies
For listed Public Limited Companies and companies with more than 1,000 shareholders, e-voting is mandatory for postal ballot processes. The company must provide an electronic platform where shareholders can vote securely, which ensures broader participation and real-time vote counting.

Procedure for Conducting Postal Ballot
The key steps in conducting a postal ballot include:

• Board resolution approving the postal ballot notice
  
• Appointment of a scrutinizer to oversee voting
  
• Dispatch of notice and explanatory statement to all shareholders
  
• Publication of notice on the company’s website and in newspapers
  
• Providing a minimum of 30 days for voting
  
• Compilation and certification of results by the scrutinizer
  
• Declaration of results by the chairman and uploading it on the website
  

Votes received after the deadline are treated as invalid.

Role of Scrutinizer and Voting Confidentiality
A scrutinizer, usually a practicing professional (CA, CS, or advocate), ensures fair voting practices. They are responsible for maintaining the secrecy of votes, validating ballots, and preparing the final report. The process must be transparent, and shareholders’ identities must be protected during vote counting.

Disclosures and Record-Keeping
Once the resolution is passed via postal ballot, the company must:

• File the resolution with the Registrar of Companies (Form MGT-14)
  
• Record the resolution in the minutes book of general meetings
  
• Disclose results to stock exchanges (for listed companies)
  
• Upload the results and scrutinizer’s report on the company’s website
  

These steps ensure accountability and public disclosure.

Advantages of Postal Ballot

• Enhances shareholder participation, especially for non-resident and retail investors
  
• Saves time and cost of conducting physical meetings
  
• Enables faster decision-making for urgent matters
  
• Promotes democratic governance and transparency in corporate actions
  

It is an efficient tool for companies with widespread shareholders.

Limitations and Exceptions
Postal ballot is not applicable for:

• Ordinary business items (e.g., approval of financial statements, declaration of dividends)
  
• Matters to be passed exclusively in physical general meetings
  Additionally, postal ballot is not required when a general meeting is convened for the same item, unless mandated by specific provisions.
  

Conclusion
Postal ballot is a significant mechanism in the governance of Public Limited Companies, enabling shareholder approval of crucial matters without the need for physical presence. It supports greater participation, legal compliance, and transparent decision-making. By adhering to the prescribed procedures under the Companies Act and SEBI regulations, companies can ensure legitimacy and inclusiveness in their corporate actions through the effective use of postal ballot.

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