Voting and its Types, and Types of Resolutions

In one line

A resolution is normally decided by counting hands, but any substantial minority can demand a poll in which votes are counted by shares, and some business can be done by post or electronically without a meeting at all.

In exam wording: section 107 decides a resolution on a show of hands unless a poll is demanded under section 109 or the voting is electronic; section 108 empowers the Central Government to prescribe electronic voting; section 110 provides for a postal ballot; and section 114 defines an ordinary resolution, carried by votes in favour exceeding votes against, and a special resolution, requiring votes in favour to be not less than three times the votes against.

Why the law has this at all

A show of hands is quick, and it is also unfair. One member holding a single share has one hand; another holding forty per cent of the company has one hand too. For routine business that does not matter, and the speed is worth having.

For anything contested it matters a great deal, so the Act gives a minority the right to insist on a poll, in which votes are counted by shareholding under section 47. Notice that the poll is available on demand by one-tenth of the voting power, not by a majority: a rule requiring a majority to demand a poll would be useless, because a majority does not need one.

Electronic voting and the postal ballot answer a different problem. A member in another State cannot attend, and a proxy cannot speak for him or vote on a show of hands. Both mechanisms let him vote without being in the room, and the postal ballot goes further and dispenses with the meeting altogether for defined business.

And section 114 exists because the Act is full of the phrases "ordinary resolution" and "special resolution". Without a definition section, every one of those references would be ambiguous.

Some words this chapter uses

A show of hands is a count of persons present. A poll is a count of votes by shareholding. A casting vote is an extra vote given to the chairman to break a tie. A postal ballot is defined in section 2(65) as voting by post or through any electronic mode. A scrutiniser is a person appointed to check a poll. Special notice is the advance notice required by section 115.

Restriction on voting rights: section 106

Section 106(1). Notwithstanding anything in this Act, the articles may provide that no member shall exercise any voting right in respect of shares registered in his name on which any calls or other sums presently payable by him have not been paid, or in regard to which the company has exercised any right of lien.