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Directors

Hiten (CA) (275 Points)

10 April 2015

section 163 of companies act, 2013 states that "a company can appoint not less then two-thirds of the total number of directors according to the principal of proportional representation" What it menas "principle of proportional representation" how appointment is made in this?

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4 Replies

Nitish Agrawal (CA) (810 Points)
Replied 10 April 2015

This is only in case if articles authorise...further it means that where this section applies vote of members will not be as per there holding of share capital instead it will be like 1 member 1 vote irrespective of there membership rights...this is when single transferable vote method opted and where cumulative method is opted then each member wil be give a right to say for eg 4 votes...now he can give dis 4 votes as per his preferance like for eg.if And B and C are the 3 candidates then each member has right to give those 4 votes to any one...like a member can give 2 votes to A and 2 to B...like that....i hope dis will clear Ur doubt...

Hiten (CA) (275 Points)
Replied 10 April 2015

Ohh!! Yup I think i got it...it seems that minority will get fair representation on board...as votes are cast irrespective of stake..Please correct me if I am wrong