Section 47: Voting rights
This section is for determining the voting rights of members of a company limited by shares, including those holding equity and preference shares.
The section, clause by clause
What the section says
In plain terms
(1)Subject to the 2[provisions of section 43, sub-section (2) of section 50 and sub- section (1) of section 188],—
Every member of a company limited by shares has the right to vote on every resolution, with their voting right on a poll being in proportion to their share in the paid-up equity share capital of the company.
(1)(a)every member of a company limited by shares and holding equity share capital therein, shall have a right to vote on every resolution placed before the company; and
(1)(b)his voting right on a poll shall be in proportion to his share in the paid-up equity share capital of the company.
(2)Every member of a company limited by shares and holding any preference share capital therein shall, in respect of such capital, have a right to vote only on resolutions placed before the company which directly affect the rights attached to his preference shares and, any resolution for the winding up of the company or for the repayment or reduction of its equity or preference share capital and his voting right on a poll shall be in proportion to his share in the 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:
Holders of preference shares can vote on resolutions that directly affect their preference shares, and their voting right on a poll is in proportion to their share in the paid-up preference share capital, unless the dividend on their preference shares has not been paid for 2 years or more, in which case they can vote on all resolutions.
provisoProvided 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.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Subs. by Act 21 of 2015, s. 7, for “issued under the common seal of the company” (w.e.f. 29-5-2015).
- 2. Subs. by Act 1 of 2018, s. 11, for “provisions of section 43 and sub-section (2) of section 50” (w.e.f. 9-2-2018).
- 1. Sub-section (5) omitted by Act 29 of 2020, s. 8 (w.e.f. 21-12-2020).
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.