India: Amendment To Rule 20 Of Companies (Management And Administration) Rules, 2014: Voting Through Electronic Means

Ministry of Corporate Affairs vide its notification dated 19th March 2015 had modified Rule 20 of the Companies (Management and Administration) Rules, 2014 ("hereinafter Rules, 2014) and issued the Companies (Management and Administration) Amendment Rules, 2015 ("hereinafter, Amendment Rules, 2015"). The Rules have been made by Central Government under the powers conferred by Section 108 read with Section 469 (1) and (2) of the Companies Act, 2013. The Rules came into force with effect from 19th March, 2015.

Rule 20 of the Rules, 2014 talks about voting through electronic means. The Rule mandates certain class of companies to provide their members facility for voting by electronic means at general meetings.

As per the Sub section (1) of Rule 20 of Rules, 2014, every listed company or a company having not less than 1000 shareholders, shall provide to its members facility to exercise their right to vote at general meetings by electronic means.

The scope of applicability has been modified with the amended Rule 20. Sub Rule (2) of the new Rule 20 provides that every company other than a company referred to in Chapter XB or Chapter XC of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 having its equity shares listed on a recognised stock exchange or a company having not less than 1000 members, shall provide to its members facility to exercise their right to vote on resolutions proposed to be considered at general meetings by electronic means.

Further, new terms have been defined under Rule 20 of the said Rules. These are as follows:

i. Agency: "Agency" means the National Securities Depository Limited, the Central Depository Services (India) Limited or any other entity approved by the Ministry of Corporate Affairs subject to the condition that the National Securities Depository Limited, the Central Depository Services (India) Limited or such other entity has obtained a certificate from the Standardisation Testing and Quality Certification Directorate, Department of Information Technology, Ministry of Communications and Information Technology, Government of India including with regard to compliance with parameters specified under Explanation (vi)

ii. Cut-off Date: "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;

iii. Remote E-Voting: "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.

iv. Voting by Electronic Means: "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.

There is, however, no change in the definitions of terms "Secured system", "Cyber Security" and "Electronic voting system" or "voting by electronic means".

Sub-Rule (3) confer right to member to vote through voting by electronic means on the resolutions referred in sub-rule (2). Further, the Rule requires the Company to pass such resolutions in accordance with the provisions of this rule.

The procedure set out as under Rule (4) requires a company, which provides facility to its members to exercise voting by electronic means to comply with the below mentioned:

i. Notice of the meeting: The notice shall be sent to all the members, directors and auditors of the Company. The mode of sending notice shall be either of the following:

a. By registered post or speed post; or

b. Through electronic means, namely, registered e-mail ID of the recipient; or

c. By courier service.

As per the earlier Rule (3), which provided for the similar provision, specified that the notices shall be sent to "..all the members, auditors of the company, or directors...", there was no obligation to serve notice to director, however, the new Rule clearly mandates the company to serve notice to every director.

ii. After the notice is sent to members, the notice shall be required to be placed on the website, if any, of Company and of the agency.

iii. The notice of the meeting shall state:

a. That the facility being provided by the company with respect to voting by electronic means and that 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 who have not already cast their vote by remote e-voting shall be able to exercise their right at the meeting.

c. That in-spite of casting the vote by remote e-voting prior to the meeting, members may also attend the meeting; however they shall not be permitted to cast their vote again.

iv. Clause (iv) of Sub Rule (4) requires that 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 ID;

d. specify the process and manner for generating or receiving the password and for casting of vote in a secure manner.

v. Public notice: A public notice by way of an advertisement shall be required to be published upon completion of dispatch of notices of meeting under Sub rule (4)(i) at least 21 days before the date of general meeting in the following:

a. 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

b. At least once in English language in an English newspaper having country-wide circulation.

The advertisement shall disclose the following matter:

a) Statement that the business may be transacted through voting by electronic means;

b) Date and time of commencement and end of remote e-voting;

c) Cut-off date;

d) Manner of obtaining the login ID and password by persons who have acquired shares and become members of the company.

e) Statement clearly stating the below mentioned facts:

  • remote e-voting shall not be allowed beyond the said date and time;
  • the manner for voting by members present at the meeting;
  • 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 in the meeting; and
  • a person whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting in the general meeting.

f) website address of the company, if any, and of the agency where notice of the meeting is displayed; and

g) name, designation, address, email id and phone number of the person responsible to address the grievances connected with facility for voting by electronic means.

Further, the public notice shall be required to be placed on the website of the company, if any and of the agency

As per the earlier provision (Clause v of Sub Rule 3 of Rule 20), the company was required to make an advertisement to be published not less than 5 days before the date of beginning of the voting period. This period has been changed and the new provision (Clause v of Sub Rule 4 of Rule 20) requires companies to make advertisement to be published immediately on completion of dispatch of notices for meeting as prescribed under clause (i) of sub-rule (4) but at least 21 days before the date of general meeting. Accordingly, the time period has been changed from 5 days before the date of beginning of the voting period to 31 days before the date of general meeting.

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 of the general meeting

The old provision provided that the e-voting shall remain open for not less than one day and not more than 3 days. The new provision has extended the minimum time period from 1 day to 3 days and has eliminated the maximum time period for which the voting shall remain open.

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 cutoff date, may opt for remote e-voting:

Provided that once a member casts its vote, he shall not be allowed to change it subsequently or to cast vote again. Also, a member may participate in the general meeting even after remote e-voting subject to the condition that he shall not be allowed to vote again.

viii. The facility shall be blocked at the end of the remote e-voting period.

ix. One or more scrutinizer shall be appointed by the board of directors, who may be practicing professional (Chartered Accountant/ Cost Accountant/ Company Secretary/ an Advocate/ any other person not in employment of the company). While selecting the scrutinizer, board shall consider that such person shall be a person repute who will scrutinise the voting and remote e-voting process in a fair and transparent manner. The scrutinizer may take the assistance of a person but such person shall also not in employment of the company but who shall be 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. At a general meeting, once the discussion on the resolution on which voting is to be held is over, the Chairman shall allow voting, as provided under sub-rule (1) of Rule 21 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 except for who who have availed remote e-voting facility.

xii. After the conclusion of voting at the general meeting, the scrutiniser shall, immediately first count the votes cast at the meeting, thereafter unblock the votes cast through remote e-voting in the presence of at least two witnesses (who shall not be in the employment of the company). Thereafter, Scrutiniser shall give a consolidated report specifying the total votes cast in favour or against, if any, not later than three days of conclusion of the meeting, to the Chairman or a person authorised by him in writing who shall countersign the same. The Chairman or a person authorised by him in writing shall declare the result of the voting forthwith.

Explanation to clause (xii) clarifies that the manner in which members have cast their votes, shall remain secret and not available to the Chairman, Scrutiniser or any other person till the votes are cast in the meeting.

xiii. The scrutiniser shall have access, after the closure of period for remote e-voting and before the start of general meeting, to details relating to members, who have cast votes through remote e-voting but not the manner in which they have cast their votes.

xiv. The scrutiniser shall maintain a register either manually or electronically to record the assent or dissent received, mentioning the particulars of the members, number of shares held by them, nominal value and whether the shares have differential voting rights.

xv. The register and all other papers relating to voting by electronic means shall remain in the safe custody of the scrutiniser until the Chairman considers, approves and signs the minutes and thereafter, the scrutiniser shall hand over the register and other related papers to the company.

xvi. The results declared along with the report of the scrutiniser shall be placed on the website of the company, if any and on the website of the agency immediately after the result is declared by the Chairman. However, in case of listed companies, the respective companies shall be required to simultaneously forward the results to the concerned stock exchange(s) where its equity shares are listed and such stock exchange(s) shall place the results on its or their website.

The older provision requires that the results to be placed on the website of the company and on the website of the agency within 2 days of passing of the resolution at the relevant general meeting. However, the new provision is more stringent in a way that it requires the companies to place the results immediately on its website and on website of agency. Further, it also requires companies to intimate the respective stock exchange(s) by forwarding the results to them.

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.

Explanation.- For the purposes of this clause, the requisite number of votes shall be the votes required to pass the resolution as the 'ordinary resolution' or the 'special resolution', as the case may be, under section 114 of the Act.

xviii. resolution proposed to be considered through voting by electronic means shall not be withdrawn.

It has been specified in the Rule 20 that the provisions of the new rule shall be applicable in respect of general meetings for which notices are issued on or after the date of commencement of this Rule i.e. Companies which are issuing notices on or after 19th March, 2015 shall be required to comply with the provisions of new Rule.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Global Jurix, Advocates & Solicitors
Singh & Associates
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Global Jurix, Advocates & Solicitors
Singh & Associates
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions