Voting Rights of the Shareholders
Introduction of Section 47 of the Companies Act, 2013
Every member of the company limited by shares holding equity share capital has right to vote in Company. Rights can be varied as per section 43(a) of the Companies Act, 2013; for private limited company section 47 is not applicable where memorandum or articles of the company so provides (exemption granted through the Notification dated 5th june, 2015.)
There can be two kinds of share capital in the company
1. Equity Share Capital
2. Preference share capital
Prevailing Sections on Voting Rights:
1. Section 47 of the Companies Act, 2013 subject to
2. Section 43 of the Companies Act, 2013 &
3. Section 50(2) of the Companies Act, 2013 &
4. Section 188(1) of the Companies Act, 2013
5. Section 106 of the companies act, 2013
Act about Voting Rights:
1. There are two kinds of shareholders in the company Equity Shareholders and Preference Shareholders. Voting rights of both are given in Section 47 of the Companies Act, 2013
2. Every equity shareholders have right to participate in the general meeting held by the company and vote on every resolution placed before the company as per section 47(1)(a) of the Act [Notice to be served to every equity holders per section 101 of the Companies Act, 2013]
3. Voting right on a poll shall be in proportion to their share in the paid-up equity share capital of the company as per Section 47(1)(a) of the Companies Act, 2013
[ In case of Nidhi company -clause (b) of Sub-section (1) of Section 47 shall apply, subject to the modification that no member shall exercise voting rights on poll in excess of five per cent, of total voting rights of equity shareholders. – Notification dated 5th june, 2015]
4. Every member holding preference share capital of the company have right to vote only on the agenda/resolutions placed before the company which directly affect the rights attached to their share as below;
(voting rights on poll shall be in proportion to his shares in paid up preference share capital of the company)
Provided that the proportion of the voting rights of equity shareholders to the voting rights of the preference shareholders shall be in the same proportion as the paid-up capital in respect of the equity shares bears to the paid-up capital in respect of the preference shares
Provided further that where the dividend in respect of a class of preference shares has not been paid for a period of two years or more, such class of preference shareholders shall have a right to vote on all the resolutions placed before the company.
Voting rights for equity share capital can differ as per issuance of the shares namely: –
[the voting power in respect of shares with differential rights of the company shall not exceed seventy-four per cent (74%). of total voting power including voting power in respect of equity shares with differential rights issued at any point of time]