The articles of ABC Limited provided that only those shareholders would be entitled to vote whose names have been there on the Register of Members for two months before the date of the meeting. X, a member, of the ABC Limited was holding 200 equity shares of the company. X transferred his shares to Y before one month from the date on which the meeting was due. The name of Y could not be entered in the Register of Members as the application of transfer of shares was pending. X attended the meeting but he was prohibited by the company from exercising his voting right on the ground that he has not hold his shares for specified period as provided in the articles before the date of the meeting. State whether X can exercise his voting right in the meeting ? State also the grounds upon which X may be excluded from exercising his voting rights in the meeting of the shareholders.
According to provision of companies Act, 1956. A member of a company has no voting right unless he actually acquires shares. A person becomes member only when his name is entered in register of member of the company. Till then, he is only holder.
In case of transfer of share, transfer is entitled to vote when his name is entered into register of member. The case is, X transfer his shares to y before one month from the date on which meeting was done and name of y is not entered is the register of member as the application of transfer of share is pending. Article of company provided that only there shareholders would be entitled to vote whose names have been there on register of members for two month of the above. Since transfer of shares procedure is pending and the name of y is not entered into register of member. Hence y is neither a shareholder nor he has right to vote. And x can exercise his voting right in the meeting as his name has not been struck off from register of member.
But if transfer process is complete and x name is struck off from company’s register of member than he is excluded from the voting right.
In case of transfer of share, transfer is entitled to vote when his name is entered into register of member. The case is, X transfer his shares to y before one month from the date on which meeting was done and name of y is not entered is the register of member as the application of transfer of share is pending. Article of company provided that only there shareholders would be entitled to vote whose names have been there on register of members for two month of the above. Since transfer of shares procedure is pending and the name of y is not entered into register of member. Hence y is neither a shareholder nor he has right to vote. And x can exercise his voting right in the meeting as his name has not been struck off from register of member.
But if transfer process is complete and x name is struck off from company’s register of member than he is excluded from the voting right.
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