Voting System

The ordinary shareholders exercise their right to control through voting in the meetings of the company. According to the most commonly used system of voting in India, namely, majority voting each share carries one vote and each director is elected individually. Therefore, a shareholder can cast the total number of shares held by the each director separately. As a result, shareholders/group holding more than 50 per cent of the outstanding equity shares would be able to elect all the directors of their choice. An alternative is proportionate the voting under which the number of voles held by a shareholder/group equal the number of shares held by him multiplied by/times the number of elected. The total votes held may be cast/spread in any manner: all just for one candidate or spread over as many candidates as the shareholders wishes to vote for. The proportionate voting system may enable even minority shareholders some representation on the board while all the members of the board may be elected by the holders of the majority of ordinary shares.

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