Proxy in Company Law,2013: Understanding the Role and Importance of Proxy Voting

Introduction to What is Proxy in Company Law

The Companies Act of 2013 defines “proxy” in company law in two ways. The first speaks of the person designated by a member to represent him at the meeting and cast his vote. 

The other is the instrument or paperwork appointing this person as a proxy.  A member unable to attend a meeting physically can nevertheless cast a vote thanks to the proxy option. 

Section 105 of the Companies Act, 2013, Rule 19 of the Companies (Management and Administration) Rules, 2014, and Point 6 of Secretarial Standards-2 (SS-2) all address the idea of a proxy meaning in company law 2013 in great detail. 

Define Proxy in Company Law

Before the annual shareholder meeting, each shareholder receives a material packet, including the Proxy Statement. The proxy documents give shareholders the information they need to cast informed votes on issues important to the company’s performance. 

A Proxy Statement informs shareholders and potential investors about a company’s governance and management practices.

The proxy serves as a ballot in the elections for the board of directors, provides important information about the items on the annual meeting’s agenda, and lists the qualifications of the management and board members. 

It includes detailed information on executive salaries as well as a list of the principal stockholders in a company. The management and shareholders are still presenting plans. 

A proxy cannot cast a vote on behalf of a shareholder who arrives after the deadline and wishes to vote.

Why Would You Use a Voting Proxy?

If a company shareholder cannot attend a meeting or chooses not to vote on a particular subject, they may cast a proxy vote.

How Do You Cast a Proxy Vote?

Investors have the option to vote by proxy or choose a proxy to cast their ballot instead of the investor in person at a shareholder meeting. 

This may entail assigning a proxy to cast their ballot or casting a ballot by mail, phone, or internet before the deadline.

Conclusion

Proxy voting is frequently conducted during shareholder meetings to speed up decision-making when investors cannot attend a meeting. Shareholders may get voting instructions and proxy papers by email or mail.

If you need assistance with Converting an LLP into a Private Limited Company, registering a Section 8 Company, Public Limited Company, or Private Limited Company, or need assistance with checking company name availability, reach out to Lawgical Adda for expert guidance. Contact us today!

Lawgical Adda’s solution provides end-to-end management of corporate governance and secretarial compliances, encompassing every phase of the entity life cycle. Don’t hesitate to get in touch with us if you want more information on the compliance standards and to outsource them to us.