What is Voting rights What is variation of shareholders rights Section 47 and 48 of Indian Companies Act 2013
Voting rights and Variation of shareholders rights are defined under Section 47 and 48 of Indian Companies Act 2013. Provisions under these sections are:
Section 47 of Indian Companies Act 2013 "Voting Rights"
(1) Subject to
the provisions of section 43 and sub-section (2) of section
(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.
Section 48 of Indian Companies Act 2013 "Variation of shareholders rights"
(1) Where a share capital of the company is divided into different classes of shares, the rights attached to the shares of any class may be varied with the consent in writing of the holders of not less than three-fourths of the issued shares of that class or by means of a special resolution passed at a separate meeting of the holders of the issued shares of that class,
(a) if provision with respect to such variation is contained in the memorandum or articles of the company; or
(b) in the absence of any such provision in the memorandum or articles, if such variation is not prohibited by the terms of issue of the shares of that class:
Provided that if variation by one class of shareholders affects the rights of any other class of shareholders, the consent of three-fourths of such other class of shareholders shall also be obtained and the provisions of this section shall apply to such variation.
(2) Where the holders of not less than ten per cent. of the issued shares of a class did not consent to such variation or vote in favour of the special resolution for the variation, they may apply to the Tribunal to have the variation cancelled, and where any such application is made, the variation shall not have effect unless and until it is confirmed by the Tribunal:
Provided that an application under this section shall be made within twenty-one days after the date on which the consent was given or the resolution was passed, as the case may be, and may be made on behalf of the shareholders entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.
(3) The decision of the Tribunal on any application under sub-section (2) shall be binding on the shareholders.
(4) The company shall, within thirty days of the date of the order of the Tribunal, file a copy thereof with the Registrar.
Punishment and Penalty for Default
(5) Where any default is made in complying with the provisions of this section, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees, or with both.
SHARE CAPITAL AND DEBENTURES