The Ministry of Corporate Affairs has issued a Circular No. 38/ 2014 providing clarification in regard of the Section 8 Companies w.r.t. to the Section 160 of the Companies Act, 2013 which contains the provisions of the Rights of the Persons other than retiring directors to stand for the Directorships.
Clarity has been sought by companies registered under section 8 of the Companies Act, 2013 (corresponding to section 25 of Companies Act, 1956) about the manner in which the amount of deposit of rupees one lakh received by them under sub-section(1) of section 160 of the Companies Act, 2013 (Act) is to be handled if the depositor fails to’ secure more than twenty five per cent of the total valid votes. It has been noted that the relevant provision is silent on such issue.
The matter has examined with regard to the above clarification and it has been decided that the Board of Directors shall act as a competent authority of the Section 8 Companies on how the money deposited made by or on behalf of the person shall be refunded or forfeited who has failed to secure more than 25% of the votes.
The Circular containing the above details can also be accessed at the link below.