Latest Article

Proxy Of A Shareholder

Courtesy/By: Prathamesh R. Gothe | 2021-05-01 01:38     Views : 43

Its shareholders own a company. Many decisions regarding the functioning of a company are subject to the approvals granted by the shareholders. A shareholder conveys his approval on a particular business affair of a company through a meeting organised for the same. Such meetings of shareholders are called general meetings. The way of communicating one's approval is by casting a vote in favour or against the matter. The Companies Act of 2013 allows various voting like by show of hands, poll electronically, or postal ballot. The votes can be cast by the shareholder either personally or through a proxy.

When a shareholder cannot attend the company’s meetings personally, he can appoint a person for the same purpose. Such a person is called a proxy.

We shall hereafter understand more about a proxy and the legal provisions applicable to a proxy in detail.

Proxy and the applicable legal provisions:

1) Any member of the company who is entitled to attend and vote at the company's meeting shall be allowed to appoint another person (i.e. a proxy) to attend and vote at such meeting.

The proxy so appointed shall not be allowed to speak at the meeting and vote only when the voting is done by way of a poll.

In the case of certain Government Companies belonging to a particular class, the Central Government shall not allow the members of such companies to appoint another person as their proxy.

A single person can act as a proxy for not more than 50 members of the company and those not holding more than 10% of the company’s total share capital. If a single member has more than 10% of the company’s share capital, he may appoint a proxy who cannot act in the same capacity as any other company member.

A company without a share capital need not comply with the above provision unless it's AOA (i.e. Articles of Association) provides otherwise.

Appointment of a proxy shall be made in Form No. MGT 11

2) The notice of the meeting of such companies authorising the appointment of a proxy shall reasonably state that such an appointment of one or more proxies shall be allowed.

Such notice must also state that a proxy need not be a member of the same company.

3) If the company does not comply with the above provision, every officer of the company shall be liable to a penalty of 5,000

4) Any document or instrument showing the appointment of a proxy shall be deposited or submitted to the company not more than 48 hours before the commencement of the company’s general meeting.

5) A company shall not be allowed to invite its members for appointing any of the persons as their proxies from the list provided by the company at its own expense.

If the issue of such a list is authorised or permitted by any of the company’s officers, then every such officer shall be liable for a penalty of 50,000.  

However, suppose the member by himself requests for the form of appointment or proxies or shows the list of persons interested in being appointed as proxies available with the company. In that case, the officers of the company shall not be penalised.

6) An instrument appointing a proxy shall be in writing and shall have the person's signatures appointing the proxy.

Suppose a body corporate intends to appoint a proxy. In that case, the instrument of appointment shall bear the common seal of such body corporate or a signature of its duly authorised officer.

7) The format of an instrument for a proxy’s appointment shall be considered sufficient and valid if it is similar to that of form no. MGT 11.

Complying with any specialised format as prescribed by a company’s articles shall not be required.

8) Any member may inspect the particulars of proxies appointed for the meeting 24 hours before its commencement, provided such inspection shall be allowed only during the business hours and on giving at least three days prior notice to the company conveying his intention to inspect.

9) In case of meetings of companies not for profit, the proxy appointed to attend and vote at the meeting shall also be a member of such company, unlike for other types of companies.

 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code Legal and Tax shall not be responsible for any errors caused due to human error or otherwise. 

Courtesy/By: Prathamesh R. Gothe | 2021-05-01 01:38

A PHP Error was encountered

Severity: Notice

Message: Undefined variable: news_id

Filename: controllers/Welcome.php

Line Number: 3005

Backtrace:

File: /var/www/html/whitecode/application/controllers/Welcome.php
Line: 3005
Function: _error_handler

File: /var/www/html/whitecode/index.php
Line: 315
Function: require_once