Voting Rights in respect of Partly Paid up Equity Shares

This query is : Resolved

Guest

Guest (Querist)

30 January 2010 Hi,

Whether partly paid up equity shares carry voting rigths ?

Or only fully paid up equity shares have right to vote in general meeting of the company.

Esteemed experts are requested to reply to my query as early as possible.

You can email me at nehajaincs@gmail.com

With Warm Regards, Neha Jain CS

Jagruti (CS)

Jagruti (CS) (Expert)
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30 January 2010 It depends on Articles of the ocmpany whether it restricts voting by members whose shares are partly paid up shares( refer Sec 181 of Companies Act)

Guest

Guest (Querist)

30 January 2010 Thanks Jagruti for an early reply.

Please also let me know whether preference shares can be issued as partly paid up shares by the company.

Also let me know the detailed implications and formalities for issuing partly paid up shares by the company. What are the compliances viz. filing of forms, asking for call money, voting rights etc in respect of issuance of partly paid up shares.

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Ankur Garg

Ankur Garg (Expert)
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01 February 2010 As per practice followed in corporate world a shareholder holding partly paid share can not vote. Voting right is available only to a shareholder holding fully paid share.

Also check your AOA in this regard.

Guest

Guest (Querist)

01 February 2010 Ankur Sir but section87 of the company act,1956 in respect to voting shares provides that:

87. VOTING RIGHTS.

(1) Subject to the provisions of section 89 and sub-section (2) of section 92, -
(a) every member of a company limited by shares and holding any equity share capital therein shall have a right to vote, in respect of such capital, on every resolution placed before the company; and
(b) his voting right on a poll shall be in proportion to his share of the paid-up equity capital of the company.

From this it is clear that partly paid up shares carry voting rights.

Ankur Garg

Ankur Garg (Expert)
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01 February 2010 Kindly appreciate section 181 is an overruling section and clearly overruling section 87.

Reason for overruling is the use of â€˜Notwithstandingâ€™ clause in section 181â€¦

Further section 87(1)(b) is talking about voting at the time of poll.

But one good thing is section 181 can be overruled by your AOA. With the support of AOA a partly paid shareholder can vote.

Regards