Companies Act Section 107

Companies Act, Section 107: Voting by Show of Hands

Section 107 of the Companies Act outlines the rules and procedures for voting by show of hands at general meetings of a company. The section establishes the standard method for voting in such meetings, providing clarity on how resolutions are passed and the importance of the Chairman’s declaration regarding the outcome of the vote. It also defines the situation in which a show of hands can be overridden by a poll or electronic voting.

Subsection (1): Voting by Show of Hands

1. Resolution Decided by Show of Hands:

At any general meeting of the company, when a resolution is put forward for a vote, the decision will generally be made through a show of hands. This method involves members present at the meeting physically raising their hands to indicate their vote, either in favor or against the resolution.

The show of hands is the default method of voting unless specific circumstances arise that allow for a different voting method. These circumstances include:

A poll being demanded by a member, as per the provisions outlined in Section 109 of the Companies Act. A poll is a more formal method of voting where each member’s vote is counted based on their shareholding, as opposed to the more informal method of a show of hands.

Voting being carried out through electronic means, as may be allowed in certain cases. This method is increasingly used in modern corporate governance, particularly for companies that hold meetings virtually or wish to facilitate remote participation.

2. Poll or Electronic Voting Overriding Show of Hands:

While voting by show of hands is the default, it is important to note that these other methods of voting (poll or electronic voting) can take precedence. If any of these alternative voting methods are invoked, they will replace the show of hands as the mechanism for deciding a resolution.

Subsection (2): Chairman’s Declaration of the Result

1. Chairman’s Role in Declaring the Outcome:

After the voting by show of hands has taken place, the Chairman of the meeting plays a crucial role in declaring the result. The Chairman will announce whether the resolution has been passed or rejected, based on the outcome of the show of hands. This declaration is considered final and binding.

The declaration made by the Chairman is important because it serves as the official confirmation of the resolution’s status, without the need for any additional verification or process unless a poll or other formal voting procedure has been invoked.

2. Entry in the Minutes:

Following the Chairman’s declaration, an entry regarding the result of the resolution (whether passed or rejected) will be made in the company’s minutes book. The minutes serve as the official record of the meeting and include details of all resolutions discussed, along with their outcomes.

This entry in the minutes, combined with the Chairman’s declaration, provides conclusive evidence of the fact that the resolution was passed or rejected. In legal terms, this means that the result cannot be disputed, as long as the process followed was in accordance with the company’s rules and the law.