- MCA has, vide its General Circular No. 72/2011, dated 27.12. 2011,
issued further clarification regarding the participation of shareholders or directors in meetings under the Companies Act, 1956 through electronic mode
and the authorization regarding e-voting
Earlier circular 35/2011 dated 06.06.2011 inter alia provided two mandatory provisions firstly as to facilitation of video conferencing in general meetings of listed companies and secondly regarding platform for e-voting, which this circular aims to reverse.
It provided that for the Year 2011-12, video conferencing facility would be optional for shareholders meetings, and thereafter it was to be made
mandatory for all listed companies. But on being brought to the notice of the Ministry that, this provision is not in consonance of the Companies Act,
1956 and Companies Bill, 2011, as there is no provision in either the Act or the bill which obliges the company to provide such facility mandatorily, the
Ministry has revised this provision.
Therefore, now it is optional for listed companies to provide video conferencing facility to its shareholders in General Meetings to be held
for all the subsequent years.
Moreover while in Circular 35/2011, MCA had just authorized CDSL and NSDL for providing a platform for conducting e voting by the companies upon
obtaining requisite certification.
Now, the new Circular provides that corporate, who wishes to avail such facility, may obtain such service from any agency providing electronic
platform for e voting and which has obtained the certificate from Standardization Testing and Quality Certification (STQC) Directorate,
Department of Information Technology, Ministry of Communication and IT, Government of India, New Delhi.
- MCA has vide Notification G.S.R.(E) dated 14.12.2011, introduced Unlisted Public Companies (Preferential Allotment) Amendment Rules,
2011 by amending Unlisted Public Companies (Preferential Allotment) Rules, 2003.
Following are the major highlights of the amendment
1) The definition of “Preferential Allotment” has been substituted by the new one contained in the said amendment and is made
exhaustive. It no longer continues to include ” issue of shares to the promoters and their relatives either in public issue or otherwise” as preferential allotment. Moreover, the
scope of instruments issued pursuant to preferential allotment has been widened, to also include “instrument convertible into shares including hybrid instruments convertible into shares.”
Further, the amendment also requires the companies to mention the name, fathers name, address and occupation of persons to whom such
allotment is proposed to be made under 81(1A) of the Companies Act,1956.
It has further been clarified that that persons to whom such offer is proposed, shall
not be more than forty-nine
as per the first proviso to 67(3) of the Companies Act, 1956
The text of the new definition is as follows:
“Preferential Allotment” means allotment of shares or any other instrument convertible into shares including hybrid instruments convertible into
shares on preferential basis made pursuant to the provisions of subsection (1A) of section 81 of the Companies Act, 1956;
Provided that the name, fathers name, address and occupation of persons to whom such allotment is proposed to be made shall be mentioned in the
resolution passed by the members under that sub-section:
Provided further that persons to whom such offer is proposed, shall not be more than forty-nine as per the first proviso to sub-section (3) of
section 67 of the Companies Act, 1956.
2) Rule 4 of the Rules relating to special resolution, has been substituted through the amendment which widens the scope of instrument issued pursuant
to preferential allotment, to include “instrument convertible into shares including hybrid instruments convertible into shares.”
3) A new “Rule 8” on “Invitation and Allotment of Securities” has been inserted which states :
a) No fresh offer or invitation shall be made by the company, unless the allotment with respect to any offer or invitation made earlier have been
completed in terms of 60 B(9) of the Companies Act, 1956.
b) Any offer or invitation not in compliance with 81(1A) read with 67(3) sub-section (3) of the Act, shall be treated as a public offer and the
provisions of the SCRA,1956 and the SEBI Act, 1992 shall be complied with.
c) All monies payable on subscription of securities shall be paid through cheque or demand draft or other banking channels but not by cash.
d) Any allotment of securities shall be completed within sixty days from the receipt of application money and in case the company is not able to allot the securities within the said period of sixty days, it shall repay the application money within fifteen days thereafter, failing which it will be required to be re-paid with interest at the rate of twelve percent per annum:
Provided that the monies received on such application shall be kept in a separate bank account and shall not be utilised for any purpose other than-
(i) for adjustment against allotment of securities; or
(ii) for the repayment of monies where the company is unable to allot securities.
e) No company offering securities shall release any public advertisements or utilise any media, marketing or distribution channels or agents to inform
the public at large about such an offer”.
- MCA has vide its General Circular No. 71/2011 dated 15.12.2011, extended the Company Law Settlement Scheme, 2011 upto 15th
January, 2012 and has also stated that it will not be extended further. All the other terms and conditions of the scheme (contained in General
Circulars No. 59/2011 and 60/2011) will remain the same.