# Section 47 — Voting Rights

## Equity Shareholders

Every equity shareholder has the right to vote on every resolution placed before the company.
Voting on a poll is in proportion to their share in the paid-up equity share capital.

## Preference Shareholders

Preference shareholders can vote only on resolutions that:

1. Directly affect their rights as preference shareholders.

2. Relate to resolution for repayment / reduction of equity or preference share capital.

3. Where dividend is not paid for 2 years or more — preference shareholders get the right to vote on every resolution.

Voting on a poll for preference shareholders is in proportion to their share in the paid-up preference share capital.

## Important Note

Section 47 is NOT applicable to a private company if the Memorandum (MOA) or Articles (AOA) so provides.

Worked example

### Example 1

Example: A company has not declared dividend on preference shares for 3 financial years. In the AGM, can preference shareholders vote on the resolution for appointment of auditors?

Answer: Yes. Since dividend has not been paid for more than 2 years, preference shareholders acquire the right to vote on every resolution, including the appointment of auditors.

⚠️ Common exam mistakes

Assuming preference shareholders have no voting rights at all — they have limited voting rights on matters affecting them.
Forgetting that the 2-year non-payment trigger gives full voting rights to preference shareholders.
Applying Section 47 strictly to private companies without checking the MOA/AOA exemption.

Bare-Act text Section 47 · Companies Act, 2013 · click to expand

Section 47 of the Companies Act, 2013 — Voting rights of preference and equity shareholders.

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Section 47 - Voting Rights of Shareholders

Worked example

⚠️ Common exam mistakes