PROXIES

Section 105 of the Companies Act 2013 frames law regarding proxies. We have Rule 19 of the Companies (Management and Administration) Rules 2014 to supplement provisions relating to proxies.

Any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person as a proxy to attend and vote at the meeting on his behalf. [Section 105(1)]

A member of a company registered under section 8 shall not be entitled to appoint any other person as his proxy unless such other person is also a member of such company. [Rule 19(1)]

A proxy shall not have the right to speak at such meeting and shall not be entitled to vote except on a poll. A member of a company not having a share capital shall not be entitled to appoint proxy unless articles provide so. Central Government may also specify companies whose members shall not be entitle to appoint a proxy. A person appointed as proxy shall not act as proxy for more than fifty members or for more than prescribed number of shares. [Proviso to Section 105(1)]

A person can act as proxy on behalf of members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the company carrying voting rights. A member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as proxy for any other person or shareholder. [Rule 19(2)]

In every notice calling a meeting of a company which has a share capital, or the articles of which provide for voting by proxy at the meeting, there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint a proxy, or, where that is allowed, one or more proxies, to attend and vote instead of himself, and that a proxy need not be a member. [Section 105(2)]

Here, the Rules try to change legislative mandate which do clearly permit a non – member to be a proxy. The Rule 10(1) is void with its words “unless such other person is also a member of such company”.

In case of default under this provision, every officer of the company who is in default shall be punishable with fine which may extend to five thousand rupees. [Section 105(3)]

The period for depositing proxy form with the company shall not be a period longer than a period of forty – eight hours before the meeting. [Section 105(4)]

Any invitation to appoint as proxy a person at the companies expenses is punishable. Every officer of the company who knowingly issues the invitations as aforesaid or willfully authorises or permits their issue shall be punishable with fine which may extend to one lakh rupees. [Section 105(5)] However, it is permissible to issues a list of person willing to act as proxies, where it is issued on request in writing.

The instrument appointing a proxy shall be in writing and be signed by the appointer or his attorney. Where appointer is a body corporate, it shall be sealed of body corporate and signed by an officer of attorney. [Section 105(6)]

The appointment of proxy shall be in the Form MGT – 11. [Rule 19(3)]

No instrument appointing proxy shall be disqualify for a special requirement specified in articles of a company. [Section 105(7)]

Every member entitled to vote at a meeting of the company, or on any resolution to be moved thereat, shall be entitled during the period beginning twenty-four hours before the time fixed for the commencement of the meeting and ending with the conclusion of the meeting, to inspect the proxies lodged, at any time during the business hours of the company, provided not less than three days’ notice in writing of the intention so to inspect is given to the company. [Section 105(8)]

FORM MGT – 11 PROXY FORM:

I/We, being the member (s) of …………. shares of the above named company, hereby appoint

1. Name : ……………………

Address :

E-mail Id :

Signature :……………., or failing him

2. Name : ……………………

Address:

E-mail Id :

Signature:……………., or failing him

3. Name : ……………………

Address:

E-mail Id:

Signature:…………….

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the ………….. Annual general meeting/ Extraordinary general meeting of the company, to be held on the …… day of……. At………. a.m. / p.m. at………………(place) and at any adjournment thereof in respect of such resolutions as are indicated below :

Resolution No.

1………………………………….

2…………………………………

3……………………………….

Signed this…… day of……… 20….

Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.

This form needs revenue stamp to be affixed.