Proportional representation

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chandra gopal (Querist)

20 October 2011 what is the procedure of proportional representation?
what is the manner in which directors are appointed?
i mean minority SHs appoint their representative and majority also, so how do the powers are assigned to both of them.....is it proportionately?

plz explain by giving an example , if possible....

it will be of great help......

CA Pabbaraju Laxmi Narasimha

CA Pabbaraju Laxmi Narasimha (Expert)

26 October 2011 Your query is valid..This has been prescribed under section 265 of companies act,1956

The concept behind the proportional representation is

Generally the directors are appointed by way of simple majority.Like wise, all the directors are appointed by the majority.
Obviously the minority shall follow the orders of the majority

This will affect the right of the minority to appoint the director.

So to protect the right of the minority, the minority can appoint the director by way of proportional representation, along with the majority can appoint its directors..

Proportional representation means the shareholding of the minority requesting appointment of its director..

As you should also know that,
Sec 265 overrides the entire companies act.
so proportional representation is valid.

Regards,
Laxmi narasimha

chandra gopal

chandra gopal (Querist)

02 November 2011 it is absolutely correct what have u said..
but m asking how do both directors work?

director appointed by minority has some rights as appointed by majority shareholders?

chandra gopal

chandra gopal (Querist)

02 November 2011 *its not some its same..