Postal Ballot [Section 110]

# Postal Ballot [Section 110]

## Definition

Section 2(65): "Postal ballot" means voting by post or through any electronic mode.

This is a mechanism for transacting business without holding a physical meeting — members vote by sending their assent/dissent by post or electronically.

## Statutory Framework

• Section 110 of the Companies Act, 2013
• Rule 22 of the Companies (Management and Administration) Rules, 2014

## When is Postal Ballot Used?

Section 110(1) creates two categories of business:

### (a) MANDATORY Postal Ballot

Business items declared by the Central Government by notification → must be transacted only by postal ballot

### (b) OPTIONAL Postal Ballot

A company may transact any item of business by postal ballot, EXCEPT:

• Ordinary business (4 items: adoption of accounts, declaration of dividend, appointment of directors in place of those retiring, appointment of auditors and fixing remuneration)
• Any business where directors or auditors have a right to be heard at any meeting

### Important Proviso

Items required to be transacted only by postal ballot under clause (a) may be transacted at a general meeting by a company required to provide e-voting facility under Section 108 — i.e., listed companies and prescribed companies can use e-voting instead of postal ballot.

## Deeming Provision [Section 110(2)]

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

## Procedure under Rule 22

### Step 1: Send Notice + Draft Resolution

• Send notice to all shareholders along with:
• Draft resolution
• Reasons explaining the resolution
• Request to send assent or dissent in writing on a postal ballot
• Members must respond within 30 days from the date of dispatch of notice
• Postal ballot includes voting by post or electronic means

### Step 2: Mode of Sending Notice

The notice must be sent through:

### Step 3: Publication of Advertisement

An advertisement must be published in:

• At least once in a vernacular newspaper (principal vernacular language of the district where registered office is situated, with wide circulation), AND
• At least once in an English newspaper with wide circulation in that district

### Required Contents of Advertisement:

(a) Statement that business is to be transacted by postal ballot (which includes voting by electronic means)

(Additional contents continue beyond this chunk — typically include dispatch date, end date for receipt of ballots, contact for grievances, etc.)

## Quick Comparison: Postal Ballot vs General Meeting

## Memory Aid: 'POST' Rule

• P — Publication in vernacular + English newspaper
• O — Ordinary business EXCLUDED from optional postal ballot
• S — Shareholders to respond within 30 days
• T — Three modes: Registered post / e-mail / courier

## Key Points to Remember

1. Postal ballot ≠ Postal voting only — it includes voting by electronic mode as well (per Section 2(65))

2. The deeming provision in Section 110(2) gives legal effect equivalent to passing in a general meeting

3. The proviso to Section 110(1) allows companies providing e-voting facility to transact 'mandatory postal ballot' items at a general meeting instead

4. Ordinary business is the key exclusion — these items must always be at AGM, never via postal ballot

5. Items requiring directors or auditors to be heard (e.g., removal of director under Section 169, removal of auditor) cannot be by postal ballot — natural justice demands a hearing