Voting: U/s (47) & Proxy: U/s (105)

Key Points:

1. Voting Rights
2. Polling Methods.
3. Demand for Poll Counting Under Section (109).
4. Time of Poll.
5. Postal Ballot: Under Section (110).
6. Meaning of Proxy U/s (105)
7. Statutory Provisions Regarding Proxy.

 

Link : https://smckk14.blogspot.com/2023/07/quorum-under-section-103-resolution.html

Voting: Under Section (47)

1. Voting Rights:

(i) Voting Rights in case of Equity Shareholders -

Every member who has equity share has the right to vote on every resolution in the meeting of the company.

(ii) Voting Rights for Preference Shareholders –

Preference Shareholders have limited voting rights. A preference shares has the voting rights only if a resolution affects his rights. He will have proportionate voting rights on the basis of his share in paid up preference share capital.

Following Resolution directly affect the Rights of Preference Shareholders -

(a) In case of liquidation of company.

(b) Rate of change in dividend.

(c) Change in repayment period of capital.

(d) Agreement or rearrangement of company including amalgamation.

(e) Redemption or repayment of his share capital.

(iii) Preference Shareholders are entitled to vote on any resolution passed or moved in a meeting if on such preference shares, dividend for two or more years are in arrears.

(iv) Section 47 shall not apply to a private company where MOA or AOA of the company so provide.

2. Polling Methods:

(i) By Acclamation of Voice - (Aye, No) -

This method is used when decision is expected unanimously or almost unanimously.

(ii) By Show of Hands -

Most used method. One member can cast only one vote irrespective of his shareholding. If authorised by AOA, proxy may also vote in this method.

(iii) By Division -

In this method, to know the consent of members, the Chairman divides them into two categories.

(iv) By Ballot.

(v) By Electronic means U/s 108 -

This method is made available by Central Government to certain class of companies.

3. Demand for Poll Counting Under Section (109):

Chairman of the meeting may, at his own will or on demand of members, may order for counting. Demand for counting maybe raised before or after declaration of result by show of hands.

In following conditions, it is compulsory for the Chairman to order for counting -

(a) In case of Public company, on demand of 5 members present physically or proxy, who have right to participate in meeting.

(b) In case of Private company, if demand made by one member or one proxy, and number of members present is 7 or less. If number of present members is more than 7, and 2 members demand for poll.

(c) On demand of members present who have at least 10% of total voting power.

(d) According to companies (amendment) Bill, 1987, owner (s) of at least 50000 shares may also demand either present or proxy.

(e) On demand of members present who have at least 10% of total paid up capital.

4. Time of Poll:

If demand for poll made regarding adjourned or election of Chairman, arrangement of counting to be made at once. In other matters within 48 hours.

5. Postal Ballot: Under Section (110):

(i) Regarding those matters, in which Government of India permits.

(ii) In other matters, the ordinary business in which director's may take the decisions. Such transaction made be dealt by postal ballot in place of passing in General Meeting.

(iii) If in any resolution, consent is given by required majority of shareholders through postal ballot, the resolution shall be considered as duly passed in General Meeting called for this purpose.

(iv) Circulation of Member’s Resolution under section (111)

(v) Restrictions on Voting Rights under section (106)

(vi) Rights of member to use his votes differently.

(vii) Matter of taking Poll and Scrutiny of Poll.

Proxy: Under Section (105):

6. Meaning of Proxy U/s (105):

Proxy is a person appointed by a member to attend and vote at a meeting in the absence of member.

Proxy also refers to the instrument by which a person is appointed as proxy.

A proxy is not entitled to speak in meeting.

7. Statutory Provisions Regarding Proxy:

(i) To be appointed by a member -

Proxy need not be member of the company.

In the following conditions, provisions of proxy is not applicable, unless otherwise provided by AOA -

(a) Member of the company without share capital has no right to appoint proxy.

(b) Member of a private company cannot appoint more than one proxy in one meeting.

(c) Proxy has power to vote in the meeting in which counting of votes is required.

(d) Member of a public company may appoint more than one proxy, if that member has right to give more than one vote in the meeting.

(ii) Description of appointment of proxy in notice of meeting under section 105 (2) -

Notice of meeting must contain the statement that a member who is entitled to attend and vote in the concern meeting may appoint a proxy, and that the proxy need not be a member of company. The statement must appear with reasonable prominence in the notice.

This is applicable to companies having a share capital, or those companies whose articles permit voting through proxy. A member of a company can only appoint another member of the same company as a proxy.

Any violation with requirement of the statement in the notice of meeting would attract penalty of ₹ 5000 on each defaulting officer of company.

(iii) Period of submitting the form of proxy under section 105 (4) -

Any provisions contained in AOA which specifies or require a longer period than 48 hours before meeting, for depositing with the company or any other person any instrument appointing a proxy or any other document necessary to show the validity or otherwise relating to the appointment of a proxy in order that the appointment maybe effective at such meeting, shall have effect as if a period of 48 hours had been specified in or required by such provisions for such deposit.

(iv) Inviting any person to be appointed as proxy is punishable -

If, for meeting, invitation to appoint as proxy, a person or one of persons specified in the invitations are issued at expenses of company to any member entitled to have a notice of the meeting sent to him and to vote there at by proxy, every office who issues invitation or permits their issue shall be liable to penalty of rupees 15000.

An officer shall not be liable by reason only of the issue to a member at his request in writing of a form of appointment naming the proxy, or of a list of persons willing to act as proxies, if the form or list is available on request in writing to every member entitled to vote at the meeting by proxy.

(v) Proxy form must be written and signed -

The institution appointing a proxy shall -

(a).be in writing and (b) be signed by the appointer or his attorney duly authorised in meeting or, if the appointer is a body corporate, be under its seal or be signed by an officer or attorney duly authorised by it.

(vi) Format of proxy form should be as per schedule II.

(vii) Inspection of proxy form -

Each member who has Right to Vote, may inspect the proxy forms before 24 hours of beginning the meeting till the end of meeting, during business hours, if he has informed the company in this respect to the company at least before 3 days of meeting.

(viii) Other Provisions -

(a) First right to vote belongs to shareholder –

If member and his proxy both present in the meeting. If proxy votes in presence of member, it will be treated as the member had no objection.

(b) Vote by proxy on insanity or death of the member is valid –

Valid only if the company has not any information regarding insanity or death of member.

(c) Rights of proxy representing the company –

If a company is the member of another company, it can appoint its proxy to present and vote in the meeting. Such proxy has right to speak in addition to voting.

(d) Proxy appointed by the president or governor is considered as a member –

Such proxy can appoint any person as his proxy.

(e) A person cannot be appointed as proxy for more than one meeting under one proxy form. i.e. for different meetings, different proxy forms to be submitted in the company.