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A website can be understood as a collection of publicly available information which is present in a primary single domain. The main purpose of a website is for public use to gain information and knowledge. Websites are used for various purposes. Websites can be managed by a single individual, a group of people and a company. Individuals refer WebPages to gain maximum information regarding a particular subject matter.
Websites are used by companies as potential marketing tools. Apart from this companies publish key information regarding their financials, goals, mission and vision statement, the products and services offered by them. They would also publish information regarding the progress of the firm. This would be used by stakeholders, shareholders and public to make decisions. When a company considers to issue its shares in a publicly listed stock exchange (Initial Public Offering), they would publish such information on their WebPages in order to ensure that they have multiple amount of subscribers to consider investing in their shares. Therefore this is considered compulsory for a company to improve its business. Apart from this, the company also publishes information regarding the changes in the shareholders and directors of the company. All this information is published in the website for the users to make an informed choice to consider the services offered by the company.
bodies and institutions would want mandatory website disclosures from companies.
Due to the amount of frauds and corporate governance scandals in the past, this
has become a practice in many countries to consider publishing information on
the website. Monitoring agencies and investors would know the performance of
the company based on the information published on the website. More compliance
on the website front is required as these agencies want the companies to follow
compliance. Furthermore, when there is a proper procedure or process followed
by companies, the faith of stakeholders and investors would be restored.
Therefore there are Mandatory Website Disclosures that are required to be
followed by companies.
Table of Contents
Act 1956 (Previous Company Law) does not specify any form of Mandatory Website
Disclosures. According to the Previous Company Law stated that disclosures have
to be made when it comes to reports of the progress of the company. Such
reports can the following- Annual General Report of the Company/ Meetings of
the Company and major resolutions that have been decided in the meetings. These
reports were considered as mandatory website disclosures.
During the 2008
recession, the downfall of Satyam Computers showed that the governance
framework was not up to the standards prescribed by the Securities Exchange
Board of India and the Previous Company Law. The Government of India came out
with the requirement to enact a law related to regulation of Companies when it
comes to disclosing information on the company affairs. The Companies Act 2013 (Present
Company Law) was brought out with a view to prioritise the need for companies
which are listed to disclose more information in their website. This was also
considered that companies have to disclose information to monitoring bodies
such as SEBI and MCA, apart from publishing the mandatory website disclosures.
This move was
considered to improve the amount of transparency between Directors,
Shareholders and key stakeholders of the company. One of the essential elements
of corporate governance is in order to maintain the standards of transparency
in the website. Such standards of transparency must be maintained both at an
internal level and an external level. Therefore at an internal level, the
transparency would be maintained. At an external level, the transparency
standards would be published through the website. Also monitoring agencies
would have a report on these standards. Therefore the need of Mandatory Website
Disclosures was brought out.
present Company law, it is not an obligation to have a website. The present
company law there is a requirement of having a registered office for conducting
dealings; however it is not mandatory to have a website. However as per the
regulations under the Securities Exchange Board of India, companies that have
their shares in a recognised stock exchange have to ensure that they have a
working website. This website has to be updated on a continuous basis. The law
behind this is the SEBI (Listing Obligations and Disclosure Requirement)
certain rules and regulations under the Companies Act 2013 and SEBI which make
it crucial for a company to have Mandatory Website Disclosures. The present
Company act specifies that it is not mandatory to have a website for disclosing
information. It is evident through a plain reading of the Companies Act 2013
that the words website (“if required”) is used. From the above it is not
essential for a company to have a website.
divided into private companies and public companies. However, the mandatory
website disclosures would not be applicable to all companies. Companies that
are listed and public would have more obligations to the public. Hence these
companies would have the requirement of disclosing more information on the
affairs of their business. Some disclosures would be applicable to private
companies, but would not be applicable to public companies.
certain mandatory website disclosures that will apply to all forms of
companies. Some of the rules under the
Companies Act 2013 which support mandatory website disclosures are as follows:
pertaining to the registered office such as name, address, telephone, fax,
contact details have to be mentioned in every correspondence and letter head of
the company. This directly means that if a company has a website, then such
information must be present on the website. This would apply to emails,
business letters and other modes of correspondence. The penalty imposed under this is that every
officer who has actual knowledge of the default or contravention would pay a
fine of Rs.1000/- and if the contravention continues then 1 Lakh.
offered only to potential investors who want to invest in the shares of a
company. Therefore this regulation would apply only to companies that have
their shares and securities in listed stock exchanges. Special resolution
requires a majority vote of the shareholders of the business. Alternation of
objects of the company requires a special resolution. Such resolution has to be
published in the website of the company. This is considered as a mandatory website
Conversion of a Section 8 Company to any other form of Company (Rule 22(1)b of the Companies (Incorporation) rules 2014 along with section 18 of the Companies Act 2013
A company that is formed as a charity or its objects is not for the purpose of making profit is considered as a section 8 companies. If the company wants to convert into another form of company, then the application to the regional director along with the notice copy- in Form INC 19 should be published in the website. The is one of the mandatory website disclosure which is carried out by the company, as section 8 company is formed for promotion of charity. On changing the objects of the business it must be published so that stakeholders would know the main purposes of the company. This is considered as a mandatory website disclosure as it involves change in objects.
Deposits can be
accepted by companies. This is a mode of raising finance by the company. This
section would only apply to a public company. Whenever a company invites
deposits from the public, such initiation for deposits from the public must be
uploaded on the website of the company. If the company fails to publish the
information regarding the acceptance of deposits from the public then the
penalties are stringent. The company would have to repay the deposit back to
the investors and on failing to do that would be subjected to a fine of Rs 1
crore which can extend to Rs 10 Crore. This is considered as a mandatory
website disclosure as it involves public money.
must be followed by all companies. Whenever a company wants to close the
register of the debenture holders, then intimation must be given to the SEBI
regarding such form of closure. Any companies that have its shares listed in a
stock exchange must do the same. This notification must be given before 7 days
of closing such register. Such notification must be published in the website of
the company. A company that has its shares listed must give the notification is
a local newspaper in English language.
The publication in the English Newspaper must also be published on the
website and be considered as a mandatory website disclosure. Contravention of
the above regulation would lead to the company liable for a penalty of 1 lakh
rupees which can extend to Rs 5 Lakh.
Also, Read: Mandatory Website Disclosures under Companies Act, 2013.
Such notices of
meeting such as the annual general meeting and general meeting have to be
published in the website. Apart from publishing in the website, the information
must be circulated to all members. Publishing in the website would be
considered as a mode of circulation amongst the members of the company. As per
the Secretarial Standards 1- the notice of any such meeting of the company must
be published on the official website of the company. Notice means intimation
that the meeting is held. The notice must specify the location, time and
address of such meeting which is held by the company.
If all members
are not able to be present for a meeting, there is a possibility of e-voting
process. The information regarding the method of e-voting must be published on
the website of the company. Along with this the name of the members, address of
the website, telephone number and email id of the individual should be present
on the website. Such information is present to address any form of grievances
related to the voting process through electronic means. The notification must
be present till the day of the general meeting. This is as per the Secretary
Standards- 1. Apart from this the amount of valid votes and invalid votes must
also be present on the website. The details of the voting results must be
published in a manner according to the law. A report of the voting must also be
published for a website and this must be published for two days after the
publication of the results.
voting is done by mails. Such
information regarding the postal ballot process must be published on the
website and details of such notice must be on the website till the last date of
postal ballot process. the date, time and place of where the postal ballot
occurs also must be mentioned in the website. The results of the ballot must
also be published in the website of the company. As per Secretary Standard 1
this process should be considered and published on the website of the
company. The results of the postal
ballot process and procedure must be published in the website. This would be
considered as Mandatory Website Disclosures.
If such notice
cannot be placed then a special form of notice would be published in the
English newspaper regarding this. These
are mandatory website disclosures for the company.
are not paid the remaining amount of dividend by a company, then this must be
mentioned in the website of the company. After paying the initial amount of
dividend the unpaid dividend has to be paid within a period of 90 days.
Information regarding the name and address regarding the shareholders must be
stated on the website.
A company that is going for an Initial Public Offer (IPO) has to provide information regarding the IPO on the website. Apart from this it must provide information regarding its dividend distribution policy. This is considered as a mandatory website disclosures as the information is related to the issue of shares to the public.
If the net worth
and turnover of a company is more than a particular amount, they have to take
part in corporate social responsibility activities (CSR). Such activities are
charitable in nature and have to be mentioned in the report. In the report the
following have to be mentioned:
are mandatory website disclosures as the main priorities of CSR are targeted
towards charity and other development activities.
financial reports and information regarding the accounts have to be disclosed
on the website of the company. This
would apply to a company that has its shares listed in the stock exchange. Any
subsidiaries of the parent company also have to publish such information on the
website of each subsidiary. In case of contravention of the above laws and
rules a fine of Rs 25000 would be imposed. Any event of further contravention
would attract further penalty. Financial
information is crucial to the shareholders and stakeholders of the company,
hence disclosing such information are considered as mandatory website
Section 149/ 149 (8) of the Companies Act 2013 along with Rule 13(2) Companies (Appointment and Qualification of Directors) Rules 2014
directors must be placed on the website of the company. This must be done
before seven days of the general meeting.
When it comes to independent directors all public companies, require to have an independent director. The code of independent directors considers that all appointments regarding independent directors have to be mentioned in the website of the company. This provision regarding change of directors would also be applicable to key managerial persons of the company.
When a director
resigns from the company, then such notice of resignation must be intimated to
the registrar. The intimation must be made within 30 days of the resignation.
This must be made in form DIR 12. Also such notice must be published in the
website of the company
This will apply to companies that have borrowed money or have accepted some form of deposit from the public should have some form of mechanism which addresses stressed situations for victimisation of persons. This information will also have certain grievance mechanisms listed. The every mechanism regarding the vigilance mechanism has to be provided in the website. Vigilance mechanisms are mandatory website disclosures by companies.
When the arrangement
or compromise or a merger situation is considered then such notice has to be
provided to a committee of creditors or the creditors who have significant interest
in such merger. Mandatory website disclosures are required for a company when
merging with another is required. For companies that have securities listed in
a stock exchange, these documents would be sent to the SEBI and also uploaded
on the website.
Any form of
related party transactions must be disclosed on the website of the company.
have their shares listed on a Stock Exchange have to mandatorily have a full
functioning website. It has to have information regarding the key management
personnel, financial requirements of the company, Details of the directors and
shareholders, Details of any change in the directors of the company. These
details are mandatory website disclosures.
company has to comply with the requirement of the above disclosures. In case
there is no compliance with the above mandatory website disclosures then there
are stringent penalties under the concerned laws.
company law did not have many requirements for mandatory website disclosures to
be made by the company. Because of the large amount of corporate scandals the
Government of India brought out the present company law. The company’s act 2013
has mandatory website disclosures. These mandatory website disclosures are to
ensure there is proper standards of transparency and governance are maintained
at an internal level and external level of the organisation. If a company does
not follow the compliances related to disclosures, then strict action would be
taken against the company and the people involved in controlling the company.
Therefore the company has to follow mandatory website disclosures as per the
Companies Act 2013 and the SEBI LODR regulations 2015.
See Our Recommendation: Disclosure of Significant Beneficial Ownership
Varun Hariharan has completed the Legal Practice Course from BPP Law School, Manchester. He has a Masters in Commercial and Corporate Law from the Queen Mary University of London and LLB Honours from Bangor University, UK. He specialises in law related to corporate, artificial intelligence and technology law.
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