10 September 2010
Dear Expert, What is a casting vote/second vote by chaiman? We have a public ltd co. in which there are three directors (2 directors and 1 chairman). In case 2 directors vote in board meeting that I (son of 33% shareholder in this co) should be offered to become director, then chairman can deny in board meeting? Can resolution be passed in board meeting that by recommendation of 2 directors (even though chairman opposes) I become director in co.?
11 September 2010
Dear Disha, Casting Vote/Second Vote is an authority given to the chairman of the Board Meeting to resolve the matter in case there is an equality of vote by in favoure/in opposition of a motion moved in a meeting. However the same is subject to the provision in the Articles of Association of the Company (unless the articles otherwise provide or expressly excluded, Clause 54 of Table A of Schedule I of the Companies Act, 1956 shall apply to every Public Limited Company having share capital). In your case as the majority of vote is in favour of your appointment (two out of there directors) and therefore absence of equality of votes, chairman cannot cast his casting /second vote against the resolution (i.e. cannot deny the offer of your appointment). Pls. refer Clause 54 of Table A of Schedule 1 of the Companies Act, 1956.
Also please advise: There are equity shares in the name of my mother and HUF of my father. Both of them have expired. But I do not have probate yet. Co had asked for probate for transmitting shares in my name. So in the board meeting if 2 out of 3 directors favor that shares be transmitted without probate, is it acceptable. or chairman can deny on this?
CAclubindia
