Restrictions on Voting Rights of Members (Sec 106)
# Restrictions on Voting Rights of Members — Section 106
Section 106 defines when a company can lawfully limit a member's right to vote and what flexibility members enjoy in a poll.
## 1. Permitted Restrictions via Articles
The AoA may restrict a member from voting if:
Any call or other sum is due from the member to the company, OR
The company has exercised its right of lien over the member's shares.
A company cannot bar voting on grounds other than these two.
## 2. Member's Flexibility on a Poll
A member with more than one vote on a poll need not use all votes, nor cast them the same way — votes may be split for and against.
## 3. Restriction on Signing a Requisition
A member barred from voting cannot sign a requisition for an Extraordinary General Meeting (EGM) under Sec 100.
## 4. Where AoA Has No Restrictive Provision
A member cannot be prevented from voting, even if calls/sums are unpaid or the company has a lien — the restriction must be written into the AoA.
If shares are forfeited and re-allotted, the new allottee cannot vote until all calls on the shares are paid.
## 5. Voting by Joint Shareholders
Joint shareholders must agree on how to vote, unless AoA says otherwise.
The order of votes is determined by the order of names in the register — the senior name prevails for voting rights.
## 6. Voting by Directors who are also Shareholders
A director who is also a shareholder must vote as any other shareholder — without being influenced by their directorship.
Worked example
### Example 1
Example 1 — AoA silence:
Mr A has unpaid call money on his shares, but ABC Ltd's AoA contains no restrictive provision. A cannot be barred from voting.
### Example 2
Example 2 — Lien and AoA provision:
XYZ Ltd's AoA bars voting where a lien has been exercised. The company has a lien on Mr B's shares for unpaid loan — B cannot vote, and B also cannot sign a Sec 100 requisition.
### Example 3
Example 3 — Split votes:
In a poll, Mr C holds 1,000 votes. He casts 600 FOR and 400 AGAINST a resolution. This is permitted under Sec 106(2).
### Example 4
Example 4 — Forfeiture and re-allotment:
ABC Ltd forfeits 100 shares originally held by P and re-allots them to Q. Q cannot vote on those shares until all outstanding calls on them are fully paid.
⚠️ Common exam mistakes
Barring a member from voting based on unpaid calls without an enabling AoA clause — Section 106 requires the restriction to be in the Articles.
Forcing joint holders or split-vote members to cast votes in one direction — both are allowed flexibility.
Allowing a re-allottee of forfeited shares to vote before pending calls are cleared.
Permitting a member who cannot vote to nonetheless sign a Sec 100 requisition — they cannot.
Bare-Act text Section 106 · Companies Act, 2013 · click to expand
Section 106(1): Notwithstanding anything contained in this Act, the articles of a company may provide that no member shall exercise any voting right in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid, or in regard to which the company has exercised any right of lien.
Section 106(2): A company shall not, except on the grounds specified in sub-section (1), prohibit any member from exercising his voting right on any other ground.
Section 106(3): On a poll taken at a meeting of a company, a member entitled to more than one vote, or his proxy, where allowed, or other person entitled to vote for him, as the case may be, need not, if he votes, use all his votes or cast in the same way all the votes he uses.