Summary of provisions relating to voting on resolutions
to be passed at General Meetings – Companies Act, 2013 and Rules thereon and
Secretarial Standard on General Meeting
E-voting - Mandatory for every
listed company or a company having not less than 1,000 shareholders, to provide
e-voting facility for resolutions proposed to be considered at general meetings
by electronic means (Sec 107(1) and Sec 108 of the Act applicable).
Voting by show of hands: All other Companies which are not
covered under e-voting provisions (Sec 107(2) and Sec 109 of the Act
applicable).
Governing Laws
Companies Act, 2013
Companies (Management
and Administration Rules) 2014
General Circular 20 of
2014
Secretarial Standard-2
on General Meetings
Sections 107, 108 & 109 of Companies Act,
2013
Voting by show
of hands
107. (1) At any general meeting, a resolution put
to the vote of the meeting shall, unless a poll is demanded under section 109
or the voting is carried out electronically, be decided on a show of hands.
(2) A
declaration by the Chairman of the meeting of the passing of a resolution or
otherwise by show of hands under sub-section (1) and an entry to that effect in the books
containing the minutes of the meeting of the company shall be conclusive
evidence of the fact of passing of such resolution or otherwise.
Voting through
electronic means
108. The Central Government may prescribe the
class or classes of companies and manner in which a member may exercise his
right to vote by the electronic means.
Demand for
poll
109. (1) Before or on the declaration of the
result of the voting on any resolution on show of hands, a poll may be ordered
to be taken by the Chairman of the meeting on his own motion, and shall be
ordered to be taken by him on a demand made in that behalf,—
(a) in the case a company having a share capital, by the
members present in person or by proxy, where allowed, and having not less than
one-tenth of the total voting power or holding shares on which an aggregate sum
of not less than Rs. 5 lakhs or such higher amount as may be prescribed has
been paid-up; and
(b) in the case of any other company, by any member or
members present in person or by proxy, where allowed, and having not less than one-tenth
of the total voting power.
(2) The demand for a poll may be withdrawn at any time
by the persons who made the demand.
(3) A poll demanded for adjournment of the meeting or
appointment of Chairman of the meeting shall be taken forthwith.
(4) A poll demanded on any question other than
adjournment of the meeting or appointment of Chairman shall be taken at such
time, not being later than forty-eight hours from the time when the demand was
made, as the Chairman of the meeting may direct.
(5) Where a poll is to be taken, the Chairman of the
meeting shall appoint such number of persons, as he deems necessary, to
scrutinise the poll process and votes given on the poll and to report thereon
to him in the manner as may be prescribed.
(6) Subject to the provisions of this section, the
Chairman of the meeting shall have power to regulate the manner in which the
poll shall be taken.
(7) The result of the poll shall be deemed to be the
decision of the meeting on the resolution on which the poll was taken.
Rules 20 and 21 of Companies (Management and
Administration Rules), 2014, as amended from time to time
Rule 20 - voting
through electronic means
(1) The provisions of this rule shall apply in respect
of the general meetings for which notices are issued on or after the date of
commencement of this rule, i.e., March 19, 2015
(2) Every listed company or a company having not less
than one thousand shareholders, shall provide to its members facility to
exercise their right to vote on resolutions proposed to be considered at
general meetings by electronic means.
(ii) “cut-off
date” means a date not earlier than seven days before the date of general
meeting for determining the eligibility to vote by electronic means or in the
general meeting;
(v) "remote
e-voting" means the facility of casting votes by a member using an
electronic voting system from a place other than venue of a general meeting;
(vii) “voting
by electronic means" includes "remote e-voting" and voting
at the general meeting through an electronic voting system which may be the
same as used for remote e-voting
(3) A member may exercise his right to vote through
voting by electronic means all resolutions referred to in sub-rule (2) and the
company shall pass such resolutions in accordance with the provisions of the
Rules.
(4) A company which provides the facility to its
member to exercise voting by electronic means shall comply with the following
procedure provided in Rule 4.
(i) the
notice of the meeting shall be sent to all the members' directors and auditors
of the company either -
(a) by registered post or speed post ; or
(b) through electronic means, namely,
registered e-mail lD of the recipient; or
(c) by courier service;
(ii) the notice shall also be placed on the
website, if any, of the company and of the agency forthwith after it is sent to
the members;
(iii) the
notice of the meeting shall clearly state
(A) that the company is providing facility for
voting by electronic means and the business may be transacted through such
voting;
(B) that the facility for voting, either through
electronic voting system or ballot or polling paper shall also be made
available at the meeting and members attending the meeting who have not already
cast their vote by remote e-voting shall be able to exercise their right at the
meeting;
(C) that the members who have cast their vote
by remote e-voting prior to the meeting may also attend the meeting but shall
not be entitled to cast their vote again.
(iv) the
notice shall -
(A) indicate the process and manner for voting
by electronic means ;
(B) indicate the time schedule including the
time period during which the votes may be cast by remote e-voting
(C) provide the details about the login lD;
(D) specify the process and manner for
generating or receiving the password and for casting of vote in a secure
manner.
(v) the
company shall cause a public notice by way of an advertisement to be published' immediately on completion of
despatch of notices for the meeting under clause (i) of sub-rule (4) but at
least twenty-one days before the date of general meeting' at least once in a
vernacular newspaper in the principal vernacular language of the district in
which the registered office of the company is situated, and having a wide
circulation in that district' and at least once in English language in an
English newspaper having country-wide circulation' and specifying in the said
advertisement, inter alia the following manner namely:
Provided that the public notice shall be
placed on the website of the company, if any, and of the agency;
(vi) the
facility for remote e-voting shall remain open for not less than three days and
shall close at 5.00 p.m. on the date preceding the date office general meeting;
(vii) during
the period when facility for remote e-voting is provided, the members of the
company' holding shares either in physical form or in dematerialised form, as
on the cut-off date' may opt for remote e-voting:
Provided that once the vote on a resolution is cast by the member' he
shall not be allowed to change in subsequently or cast the vote again
Provided further that a member may participate in the general meeting
even after exercising his right to vote through remote e-voting but shall not
be allowed to vote again;
(viii) at the
end of the remote e-voting period, the facility shall forthwith be blocked
Provided that if a company opts to provide the same electronic voting
system as used during remote e-voting during the general meeting, the said
facility shall be in operation till all the resolutions are considered and
voted upon in the meeting and may be used for voting only by the members
attending the meeting and who have not exercised their right to vote through
remote e-voting.
(ix) the
Board of Directors shall appoint one or more scrutiniser, who may be Chartered
Accountant in practice, Cost Accountant in practice, or Company Secretary in
practice or an Advocate' or any other person who is not in employment of the
company and is a person of repute who' in the opinion of the Board can
scrutinise the voting and remote e-voting process in a fair and transparent
manner:
Provided that the scrutiniser so appointed may take assistance of a
person who is not in employment of the company and who is well-versed with the
electronic voting system;
(x) the
scrutiniser shall be willing to be appointed and be available for the purpose
of ascertaining the requisite majority;
(xi) The
Chairman shall, at the general meeting. at the end of discussion on the
resolutions on which voting is to be held, allow voting as provided in Rule
21(1), as applicable, with the assistance of scrutiniser by use of ballot or
polling paper or by using an electronic voting system for all those members who
are present at the general meeting but have not cast their votes by availing
the remote e-voting facility'.
(xvii) subject
to receipt of requisite number of votes, the resolution shall be deemed to be
passed on the date of the relevant general meeting.
(xviii) a
resolution proposed to be considered through voting by electronic means shall
not be withdrawn."
Rule 21 -
Manner in which the Chairman of meeting shall get the poll process scrutinised
and report thereon
(1) The
Chairman of a meeting shall ensure that-
(a) The
Scrutinizers are provided with the Register of Members, specimen signatures of
the members, Attendance Register and Register of Proxies.
(b) The
Scrutinizers are provided with all the documents received by the Company
pursuant to sections 105, 112 and section 113.
(c) The
Scrutinizers shall arrange for Polling papers and distribute them to the
members and proxies present at the meeting; in case of joint shareholders, the
polling paper shall be given to the first named holder or in his absence to the
joint holder attending the meeting as appearing in the chronological order in
the folio and the Polling paper shall be in Form
No. MGT.12.
(d) The
Scrutinizers shall keep a record of the polling papers received in response to
poll, by initialing it.
(e) The
Scrutinizers shall lock and seal an empty polling box in the presence of the
members and proxies.
(f) The
Scrutinizers shall open the Polling box in the presence of two persons as
witnesses after the voting process is over.
(g) In case of
ambiguity about the validity of a proxy, the Scrutinizers shall decide the
validity in consultation with the Chairman.
(h) The
Scrutinizers shall ensure that if a member who has appointed a proxy has voted
in person, the proxy’s vote shall be disregarded.
(i) The
Scrutinizers shall count the votes cast on poll and prepare a report thereon
addressed to the Chairman.
(j) Where
voting is conducted by electronic means under the provisions of section 108 and
rules made thereunder, the company shall provide all the necessary support,
technical and otherwise, to the Scrutinizers in orderly conduct of the voting
and counting the result thereof.
(k) The
Scrutinizers’ report shall state total votes cast, valid votes, votes in favour
and against the resolution including the details of invalid polling papers and
votes comprised therein.
(l) The
Scrutinizers shall submit the Report to the Chairman who shall counter-sign the
same.
(m) The
Chairman shall declare the result of Voting on poll. The result may either be
announced by him or a person authorized by him in writing.
(2) The
scrutinizers appointed for the poll, shall submit a report to the Chairman of
the meeting in Form No. MGT.13
and the report shall be signed by the
scrutinizer and, in case there is more than one scrutinizer by all the scrutinizer,
and the same shall be submitted by them to the Chairman of the meeting within
seven days from the date the poll is taken.
General Circular 20 of 2014
Clarifications on
electronic voting under Rule 20
(i) Voting by show of hands would not be allowable
in cases where electronic voting is applicable.
(ii) Participation in the general meeting
after voting by electronic means – person who has voted electronically shall
not be debarred from participation in the general meeting physically. But he shall
not be able to vote in the meeting again, and his earlier vote (cast through
e-means) shall be treated as final.
(iii) Postal Ballot Transactions [under
Rule 22(16)] cannot be considered in a general meeting where Rule 20
(electronic voting) is applicable.
(iv) Relevance of provisions relating to
demand for poll – Provisions relating to demand for poll will not be relevant in
cases where e-voting is applicable.
(v) Option of voting through postal ballot
is not available to shareholder, who is not able to participate in the general
meeting personally and also not able to exercise voting through e-voting.
Clause 7 of Secretarial Standard-2 on General
Meetings
7. Voting
7.1 Proposing
a Resolution
Every
Resolution shall be proposed by a Member and seconded by another Member.
7.2 E-voting
7.2.1 Every company having its equity shares listed
on a recognized stock exchange other than companies whose equity shares are
listed on SME Exchange or on the Institutional Trading Platform and other
companies as prescribed shall provide e-voting facility to their Members to
exercise their Voting Rights.
Other companies presently prescribed are companies having not less than
one thousand Members.
The facility of Remote e-voting does not
dispense with the requirement of holding a General Meeting by the company.
7.2.2 Voting at
the Meeting
Every
company, which has provided e-voting facility to its Members, shall also put
every Resolution to vote through a ballot process at the Meeting.
Ballot process may be carried out by distributing ballot/poll slips or
by making arrangement for voting through computer or secure electronic systems.
Any Member, who has already exercised his votes through Remote evoting,
may attend the Meeting but is prohibited to vote at the Meeting and his vote,
if any, cast at the Meeting shall be treated as invalid.
A Proxy can vote in the ballot process.
7.3 Show of
Hands
Every company shall, at the
Meeting, put every Resolution, except a Resolution which has been put to Remote
e-voting, to vote on a show of hands at the first instance, unless a poll is
validly demanded.
A Proxy cannot vote on a show of hands.
7.4 Poll
The Chairman shall order a
poll upon receipt of a valid demand for poll either before or on the
declaration of the result of the voting on any Resolution on show of hands.
Poll in such cases shall be through a
Ballot process.
While a Proxy cannot speak at the Meeting, he has the right to demand or
join in the demand for a poll.
The poll may be taken by the Chairman, on
his own motion also.
7.5 Voting
Rights
7.5.1 Every
Member holding equity shares and, in certain cases as prescribed in the Act,
every Member holding preference shares, shall be entitled to vote on a
Resolution.
Every Member entitled to vote on a
Resolution and present in person shall, on a show of hands, have only one vote
irrespective of the number of shares held by him.
A Member present in person or by Proxy
shall, on a poll or ballot, have votes in proportion to his share in the paid
up equity share capital of the company, subject to differential rights as to
voting, if any, attached to certain shares as stipulated in the Articles or by
the terms of issue of such shares.
Preference shareholders have a right to
vote only in certain cases as prescribed under the Act.
7.5.2 A Member who is a related party is not entitled
to vote on a Resolution relating to approval of any contract or arrangement in
which such Member is a related party.
7.6 Second or
Casting Vote
Unless otherwise provided in
the Articles, in the event of equality of votes, whether on show of hands or
electronically or on a poll, the Chairman of the Meeting shall have a second or
casting vote.
Where the Chairman has entrusted the conduct of proceedings in respect
of an item in which he is interested to any disinterested Director or to a
Member, a person who so takes the chair shall have a second or casting vote.
