Provisions Relating To Voting Rights at General Meetings

Provisions-Voting-Rights-General-Meetings

Provisions Relating To Voting Rights at General Meetings

The following points must be checked in relation to Voting Rights at General Meetings


     (1)    Even if a director is interested in the subject-matter, he may exercise in relation thereto his voting rights as a member at a general meeting. He may vote even though his interest in the subject-matter is opposed to the interest of the company.

       (2)     A member may exercise his voting right irrespective of the interest of a third party therein.

    (3)   Registered holders e.g. members may contract with third parties as regards exercise of the voting rights:—
·        A mortgagee-member may vote as directed by the mortgagor.
·    A member who is a nominee or trustee may vote as directed by the beneficial owner or beneficiary.
·        A transferor-member may vote as directed by the transferee.

(4)    An insolvent member is entitled to exercise his voting rights so long as his name appears on the Register of Members3. Neither the executor of a deceased member nor the receiver of an insolvent member can exercise the voting right unless his name is entered in the register as a member.

(5)    A member in arrear with calls or other sums due in respect of his shares is not entitled to vote.4 Where the Articles provide that there is no right to vote while any sum is due in respect of the shares, a purchaser of a forfeited share cannot exercise his voting right so long as the former holder's calls are unpaid.

(6)     In the case of joint holders, the vote of the senior who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of other joint holders5. For this purpose, seniority shall be determined by the order in which names stand in the register of members. Joint holders may specify the order in which their names should be entered in the register. Joint holders are however entitled to require that their holdings shall be split with a different joint holder registered as the first named as regards each separate holding.

(7)    The voting rights of a person of unsound mind vest in his legal representative i.e.  committee or legal guardian e.g. curator bonis.

(8)     A preference shareholder can vote only on a resolution directly affecting his rights except where the dividends are in arrears as specified in section 47 in which case he will have the same rights as an ordinary member.

(9)    An authorised representative of a corporation is entitled to exercise voting rights as if he is a member [Section 113]. Consequently, a corporation is "deemed to be present" if the representative attends and its vote on show of hands must be counted.

(10)  The voting right cannot, by Articles, be restricted only to shareholders having their names in the register for a specified period before the date of voting.
(11)  Any regulation which restricts the right of a shareholder to vote at general body meetings on the basis of his shareholding cannot be imposed.

(12)  The voting right may be restricted by the company's Articles where any calls or other sums in respect of shares have not been paid or where the company has or has exercised any right of lien [Section 106]. Restriction on other grounds will not be valid.

Number of votes

Regulation 50 of Table F provides that:
“Subject to any rights or restrictions for the time being attached to any class or classes of shares:—

·  on a show of hands, every member present in person shall have one vote;
·  on a poll, the voting rights of members shall be in proportion to his share in the paid-up equity share capital of the company;
·  on e-voting the number of vote shall be according to the number of shares held by a member on the cutoff date for e-voting.”

Voting on show of hands

Generally, initially matters are decided at a general meeting by a show of hands. If the majority of the hands raise their hands in favour of a particular resolution, then unless a poll is demanded, it is taken as passed. Voting by a show of hands operates on the principle of "One Member- One Vote". However, vote by show of hand in case of listed company provides platform for e-voting is not permissible and vote must be by poll at the meeting only.

On a show of hands, each member personally present and voting is counted as one.

Proxies cannot be counted unless the Articles provide otherwise [Section 105]. A member who is also a proxy for another member is entitled to only one vote.

A declaration by the chairman that the resolution is carried on a show of hands is conclusive evidence.
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