Chapter IV--> Share Capital and Debentures
Section 47-50
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Section 47--> Voting Rights
shall have a right to vote on every
Members (Equity shareholders) of
resolution placed before the
the company
company
His voting right on a poll shall be in
proportion to his share in the paid-
up equity share capital of the
company.
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Preference shareholders (of the particular
Preference shareholders have right to vote.
class) have right to vote.
only on resolutions
a) which directly affect the rights attached to his On ALL resolutions of the company
preference shares where the dividend in respect of a class of preference
b) any resolution for the winding up of the company shares has not been paid for a period of two years or
c) for the repayment or reduction of its equity or more
preference share capital.
The proportion of the voting rights of equity shareholders to the voting rights of the preference shareholders shall be in the
same proportion as the paid-up capital in respect of the equity shares bears to the paid-up capital in respect of the
preference shares.
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Section 48 --> Variation of shareholders’ Rights
If the company wants to vary(change) the rights attached to a particular class of shares
❑ Permission in memorandum or articles of company or
• In the absence of any such provision in the memorandum or articles, if such variation is not prohibited by
the terms of issue of the shares of that class.
❑ Written consent of atleast 3/4th of the holders of issued shares of that class OR a special resolution by holders of
issued shares of that class.
If variation by one class of shareholders affects the rights of any other class of shareholders, the consent of 3/4th of
such other class of shareholders shall also be obtained.
Dissent to such variation
Application be made by minimum 10% of the holders of such class of shares to tribunal--> variation shall not have
effect unless and until it is confirmed by the Tribunal.
(Such application be made within 21 days from the date on which consent was given or SR passed)
Tribunal decision is binding on the
shareholders
Tribunal decision shall be filed with
ROC within 30 days of order by
tribunal.
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Section 49--> Calls on shares of same class to be made on Uniform basis
Where any calls for further share capital are made on the shares of a class, such calls shall be made on a uniform basis
on all shares falling under that class.
The share price is Rs. 10 and company has yet
received on allotment money. It wants
Where any calls for further share capital are made on the shares of a class,additional
such calls 1200 [Link]
shall be Can itoncall the amount
a uniform basis only
on all
from Mr. C?
shares falling under that class
NO
Mr.A --> Rs. 5 paid up Mr.B --> Rs. 5 paid up Mr.C --> Rs. 5 paid up
on 100 shares on 200 shares on 500 shares
Section 50--> Company to accept Unpaid share capital, although not called up
A company may, if so authorised the amount remaining unpaid on any
by its articles, accept from any shares held by him, even if no part of
member, the whole or a part of that amount has been called up.
A member of the company limited by shares shall not be entitled to any voting rights in respect of
the amount paid by him under above provisions until that amount has been called up.
Crux :- Shareholders will not get any voting power for calls made in advance.
Section 50--> Company to accept Unpaid share capital, although not called up
Company can accept excess amount from
any of shareholders even if calls not made.
But here Mr. C won’t get any extra voting
rights.
Mr.A --> Rs. 5 paid up Mr.B --> Rs. 5 paid up Mr.C --> Rs. 7 paid up
on 100 shares on 200 shares on 500 shares
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Quick Questions for Revision
What is the minimum % of shareholders to be called as dissenting shareholders as per Section 48? 10%
Preference shareholders shall have a right to vote on ALL resolutions of the company if their 2
dividend is not paid for the last _______ years or more.
Happy Learning!