Section 47 of the Companies Act, 2013
Section 47 of the Companies Act, 2013 deals with Voting Rights of shareholders in a company.
Here is a simplified explanation:
Section 47 – Voting Rights
(1) Equity Share Capital:
Every member who holds equity shares shall have voting rights.
The voting rights shall be in proportion to the share in the paid-up equity share capital of the company.
✅ Example: If you hold 10% of the paid-up equity share capital, you get 10% of the voting rights.
(2) Preference Share Capital:
Holders of preference shares shall not carry voting rights.
Exception: They can vote on resolutions which directly affect their rights (like changes in dividend, winding up, etc.).
Also, if dividends are not paid for 2 years or more, they get voting rights on all resolutions.
Key Points:
Equity shareholders = Proportional voting rights.
Preference shareholders = Limited voting rights, activated in special cases.
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