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September 20, 2020

What are the Website Disclosures provisions Under Companies Act, 2013?

by CA Shivam Jaiswal in Compliance Law, SEBI

What are the Website Disclosures provisions Under Companies Act, 2013?

Living in the digital world, a website is crucial for any business. If you have a business and don’t have a website, you are probably losing out on opportunities for your business. A website can be used to accomplish many different marketing strategies to help your business grow. The web has a far more extensive reach than any other form of advertising. Having a website and online presence strategy allows you to market your business online.

The companies having their website are required to adhere to certain provisions and compliances about website disclosures. It must be in accordance with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Especially the companies having an online business or otherwise are mandatorily required to disclose or publish specific information. This article will inform you about the list of disclosures needed to be made on the website of the company.

Does the Companies Act, 2013 requires a Company to have its website?

The Companies Act, 2013, Rules or notification issued under the Companies Act, 2013 does not mandate the Company to have its website. However, in the case of Listed Companies, Securities and Exchange Board of India (SEBI) has made it mandatory to maintain a functional and updated site with effect from April 2011.

Every Company which has a website for conducting online business or otherwise, shall disclose/ publish its:

  • Name
  • address of its registered office
  • the CIN
  • Telephone No
  • Fax No. if any
  • Email ID
  • the name of person who may be contacted in case of any queries or grievances on the landing/ home page of the said website

Disclosures by the Private Company

The Private Company must make the following disclosures on the website of the company:-

  • Notice of the general meeting
  • Details of the unpaid dividend including the names, the last known addresses of all those persons on the website of the company
  • Details of the Corporate Social Responsibility Policy in its report and on the website of the company
  • Separated audited accounts in respect of each of its subsidiary on its website
  • Any information about the resignation of the director within 30 days of the notice of the resignation

Disclosures by the Public Limited Company

A public company must in addition to the above mention disclosures are required to publish following on their website:-

  • The notice of “Change of objects for which money is raised through prospectus” must be placed on the website of the company,
  • Copy of circular of any invitation of deposits from the public must be on the website of the company
  • Closure of register of members or debenture holders or other security holders
  • Notice of the postal ballot
  • Results of the postal ballot shall be declared along with the scrutinizer‘s report
  • Details of the establishment of the Vigil mechanism shall be disclosed by the company on its website if any
  • Terms of Appointment of Independent Director shall also be posted on the company‘s website

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Disclosures by the Listed Company

A listed company is mandatorily required to have a functional website. The following details should be mentioned on its website:

  • Details of its Business
  • Terms and conditions of appointment of independent directors
  • Composition of various committees of board of directors
  • Code of Conduct of board of Directors and Senior Management Personnel
  • Details of establishment of vigil mechanism/ Whistle Blower policy
  • Criteria of making payments to non-executive directors , if the same has not been disclosed in annual report
  • Policy on dealing with related party transactions
  • Policy for determining ‘material’ subsidiaries
  • The email address for grievance redressal and other relevant details
  • Contact information of the designated officials of the listed entity who are responsible for assisting and handling investor grievances
  • Shareholding Pattern
  • Details of agreements entered into with the media companies and/or their associates, etc
  • New Name and the old name of the listed entity for a continuous period of one year, from the date of the last name change
  • financial information including:-
  • notice of meeting of the board of directors where financial results shall  be discussed
  • financial results, on conclusion of the meeting of the board of directors where the financial results were approved
  • complete copy of the annual report including balance sheet, profit and loss account, directors report, corporate governance report etc
  • Details of familiarization programmes imparted to independent directors including the following details
  • Number of programmes attended by independent directors (during the year and on a cumulative basis till date)
  • number of hours spent by independent directors in such programmes (during the year and on cumulative basis till date)
  • other relevant details

Mandatory Website Disclosure Requirements under Companies Act, 2013

The following is the list of general website disclosures which need to be mentioned:

  • Website address on all its business letters, billheads, notices, and other official publications
  • Notice of change of objects for which money is raised through the prospectus
  • Details of Annual Return. The web-link of such annual return shall be disclosed in the Board’s report
  • Details of establishment of Vigil Mechanism
  • Nomination and Remuneration policy
  • Company’s policy on directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178(3)
  • Corporate Social Responsibility policy of the Company
  • Terms and Conditions of appointment of the Independent Director
  • Closure of register of members or debenture holders or other security holders
  • Notice of General Meeting of the company
  • A Company sometimes provides the facility to its members to exercise voting by electronic means. Notice of that meeting shall also be placed on the website, if any, of the company and of the agency forthwith after it is sent to the members.
  • Notice of Postal Ballot and also the results of postal ballot shall be declared by placing it, along with the scrutinizer‘s report.
  • The company shall, at least seven days before the general meeting, inform its members of the candidature of a person for the office of a director or the intention of a member to propose such person as a candidate for that office by serving individual notices and by placing notice of such candidature or intention on the website of the company, if any
  • The Company shall within thirty days from the date of receipt of notice of resignation from a director post the information on its website.
  • Circular inviting deposits from public
  • Details of transfer to the Unpaid Dividend Account including a statement containing the names, their last known addresses and the unpaid dividend to be paid to each person and place it on the website of the company.
  • In case of any Striking off application made under section 248(2) of the Act, the company shall also place the application on its website, if any, till the disposal of the application.

There are no specific penalties provided for non-compliance of the website disclosure requirements. But as per Section 450, pertaining to punishment where no specific penalty or punishment is provided, if the company or any officer of the company who is in default or such other person shall be punishable with fine which may extend to Rs 10,000. If contravention is continuing one, a further fine of Rs 1000 for every day will be applicable after the first during which the contravention continues.

Compliances are the significant scope of work in large corporations. Website disclosures are also one of the primary tools of better Corporate Governance.  Therefore companies have to ensure that all compliances are in place to avoid penalties and for better corporate governance.

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