Companies Act Section 104

Companies Act, Section 104: Chairman of Meetings

Section 104 of the Companies Act deals with the appointment of the Chairman for meetings of a company, a crucial role in ensuring the smooth and orderly conduct of the meeting. The Chairman acts as the presiding officer during meetings, managing the flow of discussions, ensuring that business is conducted in accordance with the company’s rules and regulations, and facilitating decision-making. This section outlines the process for electing the Chairman at the meeting, as well as the procedure to be followed if a poll (voting) is demanded during the election of the Chairman.

Subsection (1): Election of the Chairman

1. Chairman Selection by Members:

In the absence of a provision in the articles of the company (the company’s governing rules), the election of the Chairman will be conducted by the members present at the meeting. The election is carried out through a show of hands.

This means that, unless otherwise specified in the company’s articles, the members who are physically present at the meeting will raise their hands to vote on the person they wish to elect as the Chairman. This method of electing a Chairman is simple, informal, and ensures that the election takes place swiftly, allowing the meeting to proceed with the appointed Chairman presiding over the proceedings.

The role of the Chairman is critical in ensuring that the meeting is conducted in an orderly and efficient manner, and this section outlines the basic mechanism through which the members can select this individual.

2. Impact of Articles on Chairman Selection:

The articles of the company may provide an alternative procedure for the election of the Chairman. This allows for flexibility depending on the governance structure of the company. For example, the articles may specify that the Chairman be elected by the Board of Directors or appointed by a different method, in which case the default method of election by show of hands under Section 104 would not apply. The company's articles take precedence over the provisions of this section if they outline a different process for the election of the Chairman.

Subsection (2): Poll Demanded on Chairman Election

1. Demand for a Poll on the Election:

In the event that the election of the Chairman occurs, and there is a demand for a poll (a formal vote), the election process is not completed by a show of hands alone. A poll allows for a more formal and structured voting process, often with the option for members to vote in writing, electronically, or through a more detailed process rather than just raising hands.

If a poll is demanded during the election of the Chairman, it must be taken immediately, forthwith, in accordance with the applicable provisions of the Companies Act. The poll must follow the specific procedural guidelines outlined in the Act, which ensures the vote is conducted fairly and transparently.

2. Chairman During the Poll:

Even if a poll is demanded during the election process, the person who has been elected as Chairman by a show of hands, as per subsection (1), will continue to act as the Chairman of the meeting until the results of the poll are announced.

Once the poll is conducted and a new Chairman is elected as a result of the poll, that individual will assume the role of the Chairman for the rest of the meeting. This ensures that the election process is fair and that the meeting continues in an orderly manner, with clear authority on who is in charge.

The ability to demand a poll provides a safeguard against any concerns about fairness in the election of the Chairman. The transition of power to the new Chairman ensures that the leadership of the meeting remains clear and effective.