Differential Voting Rights

This query is : Resolved

Prateek Biyani (Querist)
Follow

10 December 2009 What is the meaning of the term "Differential Voting Rights" in respect of any company. How and when these rights are excercised. Plz explain detailed prov. in simple language (not legar language).
what are the benefits of these voting rights both from the viewpoint of investors and company. Why any comp. issue shares with diff. voting rights ?

CS Pawan Kumar Baid

CS Pawan Kumar Baid (Expert)
Follow

10 December 2009 Usually each equity share has 1 vote at General Meeting. So if you have 100 shares of company, you will have 100 votes. "differential voting right" means you may have more then one vote in respect of shares held by you. i.e. to say for 100 shares you may have 200 votes or 300 votes etc. (it means you have 200 votes for 100 shares and others are having 100 votes for 100 shares).
Company may issue such shares to facilitate active shareholders much authority so resolutions can be passed easily because resolution require votes.