Companies Act Section 109

Companies Act, Section 109: Demand for Poll

Section 109 of the Companies Act addresses the demand for a poll during general meetings of a company. A poll is a formal vote conducted on a particular resolution that may be taken instead of a vote by show of hands. The provision establishes the conditions under which a poll can be demanded, the procedures for taking a poll, and the responsibilities of the Chairman in overseeing the poll process. This ensures that shareholders can express their votes in a more detailed and transparent manner, especially when a show of hands might not sufficiently reflect the opinions of all members.

Detailed Breakdown of Section 109

1. Conditions for Demanding a Poll:

Under Section 109, a poll can be demanded before or on the declaration of the result of voting on any resolution that is put to a vote by show of hands during a general meeting. This ensures that members who are dissatisfied with the outcome of the show of hands can request a more formal voting procedure to ensure their voices are heard.

The Chairman of the meeting has the authority to order a poll on his own motion. In other words, the Chairman can initiate the poll even if no demand has been made by the members if he believes it is necessary.

A poll must be ordered if it is demanded by members under certain conditions, which vary depending on whether the company has a share capital or not:

For a company with share capital: A poll can be demanded by members who are present either in person or by proxy (if allowed), provided they hold at least one-tenth of the total voting power of the company. Alternatively, a poll may be demanded if these members hold shares that have an aggregate sum of not less than five lakh rupees (or such higher amount as may be prescribed).

For a company without share capital: A poll can be demanded by any member or members who are present in person or by proxy, provided they hold at least one-tenth of the total voting power of the company.

2. Withdrawal of Poll Demand:

Once a demand for a poll has been made, the demand can be withdrawn at any time by the persons who initially made the demand. This provides flexibility in the decision-making process, as the members who demanded the poll can opt to revert to voting by show of hands or other methods if they wish.

3. Immediate Poll on Certain Matters:

A poll that is demanded on the adjournment of the meeting or on the appointment of the Chairman of the meeting must be taken immediately. This ensures that decisions critical to the continuation of the meeting or the proper conduct of the meeting are resolved without delay.

4. Timeframe for Taking a Poll on Other Matters:

For any other matter that requires a poll, the Chairman must ensure that the poll is taken within 48 hours from the time the demand for the poll was made, unless the Chairman specifies a different time. This provision ensures that the voting process remains timely and that members’ rights to participate in the decision-making process are not unduly delayed.

5. Scrutiny of the Poll Process:

When a poll is conducted, the Chairman is responsible for appointing sufficient personnel to scrutinize the poll process and the votes given. These individuals will report back to the Chairman on the results of the poll. The Chairman has the discretion to appoint as many persons as deemed necessary to ensure the poll is conducted properly and fairly, and that the integrity of the voting process is maintained.

6. Regulation of the Poll Process:

Subject to the provisions of this section, the Chairman has the power to regulate the manner in which the poll is taken. This includes the procedures for collecting votes, the manner in which votes are cast and counted, and any other aspects necessary to ensure that the poll is carried out efficiently and transparently.

7. Result of the Poll:

Once the poll is taken, the result is considered the final decision on the resolution on which the poll was demanded. The outcome of the poll, as reported by the appointed scrutineers, will be treated as the resolution passed or not passed, depending on the majority vote.