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Microlesson · 5-min read

Postal Ballot (Section 110)

# Postal Ballot [Section 110]

## What is Postal Ballot?

Postal Ballot means voting by post or through electronic mode, instead of physical attendance at a general meeting. It enables members to participate without physically gathering.

## When is Postal Ballot used?

  • It may be used for any item of business, in place of transacting at a general meeting.
  • Exceptions — Postal Ballot cannot be used for:

1. Ordinary business (the four AGM items under Section 102(2): financial statements, dividend, retiring directors, auditors); AND

2. Business where directors or auditors have a right to be heard (e.g., removal of a director under Section 169, or removal of an auditor under Section 140).

## Why these exclusions?

  • Ordinary business at AGM requires shareholder discussion and is integral to the AGM.
  • Where directors/auditors have a right to be heard, taking the matter to postal ballot would deny them due process.

## Modes of Postal Ballot

1. Physical postal ballot: A printed ballot paper is sent by post; member returns it within the prescribed period.

2. Electronic postal ballot (e-voting): Members vote through a secure electronic platform.

## Effect of Postal Ballot Resolutions

A resolution passed by postal ballot is deemed to be passed at a duly convened general meeting for all purposes under the Act — same legal force.

## Practical Significance

  • Saves cost and time of physical meetings.
  • Increases participation, especially for geographically dispersed shareholders.
  • Listed and large unlisted companies routinely use e-voting for special business between AGMs.

Worked example

### Example 1

Example: Z Ltd. wishes to use postal ballot for (a) declaration of dividend; (b) alteration of objects clause in MOA; (c) removal of a director under Section 169. Which can be done by postal ballot?

Solution: (a) Declaration of dividend is ordinary businesscannot be done by postal ballot. (b) Alteration of objects clause is special business — can be done by postal ballot. (c) Removal of director — the director has a right to be heardcannot be done by postal ballot.

⚠️ Common exam mistakes

  • Believing postal ballot can be used for ordinary business — it cannot.
  • Forgetting the second exception (where directors/auditors have right to be heard).
  • Treating postal ballot resolutions as inferior — they carry the same legal effect as general meeting resolutions.
  • Confusing postal ballot with e-voting at general meetings — postal ballot replaces the meeting; e-voting at AGM/EGM supplements it.
Bare-Act text Section 110 · Companies Act, 2013 · click to expand
Section 110 — Postal ballot. (1) Notwithstanding anything contained in this Act, a company— (a) shall, in respect of such items of business as the Central Government may, by notification, declare to be transacted only by means of postal ballot; and (b) may, in respect of any item of business, other than ordinary business and any business in respect of which directors or auditors have a right to be heard at any meeting, transact by means of postal ballot, in such manner as may be prescribed, instead of transacting such business at a general meeting. (2) If a resolution is assented to by the requisite majority of the shareholders by means of postal ballot, it shall be deemed to have been duly passed at a general meeting convened in that behalf. Explanation.—For the purposes of this section, the expression 'postal ballot' means voting by post or through any electronic mode.
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