Amended and updated notes on section 47 of Companies Act 2013. Detail discussion on provisions and rules related to voting rights.
Chapter IV (Sections 43–72) of the Companies Act, 2013 (CA 2013) deals with the provisions related to share capital and debentures. Section 47 of CA 2013 provides for voting rights.
Recently, we have discussed in detail section 46 (Certificate of shares) of CA 2013. Today, we learn the provisions of section 47 of Companies Act 2013 read with the Companies (Share Capital and Debentures) Rules, 2014.
Section 47 of the Companies Act, 2013 has been notified by the Ministry of Corporate Affairs (MCA) vide Notification No. S.O. 902(E) issued dated 27.03.2014. This notification was come into force from 1st April, 2014 i.e. the commencement date of section 47 is 1-4-2014.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | IV |
| Chapter Name | Share Capital and Debentures |
| Section No. | 47 |
| Section Name | Voting rights |
| Monthly Updated Edition | Company Law PDF |
Section 47 of Companies Act 2013: Voting rights
Section 47 shall come into force on 1st April, 2014 vide Notification No. S.O. 902(E) issued dated 27.03.2014.
(1) Subject to the provisions of section 43, sub-section (2) of section 50 and sub-section (1) of section 188, —
- (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
- (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:
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.
Exception/ Modification/ Adaptation:
1) In case of Private company, section 47 shall not apply where memorandum or articles of association of the private company so provides. –Notification No. G.S.R. 464(E) dated 5th June, 2015.
2) In case of Nidhis, 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 No. G.S.R. 465(E) dated 5th June, 2015.
3) Section 47 shall not apply to a Specified IFSC public company, where memorandum of association or articles of association of such company provides for it. –Notification No. G.S.R. 08(E) dated 4th January, 2017.