In corporate governance, shareholders are the ultimate decision-makers. However, shareholders may not always be able to personally attend general meetings due to geographical or personal limitations. To ensure their voting rights are not lost, the law allows them to appoint a proxy – a person authorized to attend and vote on their behalf.

What Does Section 105 Cover?

• Right to Appoint a Proxy: Every member entitled to attend and vote at a company meeting can appoint another person as their proxy, who may attend and vote on their behalf.
• Proxy need not be a member: Except for Section 8 (non-profit) companies, proxies do not need to be company members.
• Limitations: A proxy:
  • Can only vote on a poll.
  • Does not have the right to speak at the meeting.
• Exceptions: Certain classes of companies, as prescribed by the government, may not allow proxies. Section 8 companies require proxies to be members.

Eligibility and Appointment

• Any shareholder with voting rights can appoint a proxy.
• The appointment must be:
  • In writing.
  • Signed by the appointer (or an authorized agent).
  • Submitted using Form MGT-11.
• Proxy can represent up to 50 members and/or act for shares prescribed under rules

Notice and Disclosure

• The company must clearly state in every meeting notice that members can appoint a proxy (and that the proxy need not be a member).
• Failure to include this statement in the notice attracts a penalty for defaulting officers.

Deposit of Proxy Instrument

• The proxy form (MGT-11) must be deposited with the company at least 48 hours before the meeting.
• Even if the Articles specify a longer period, only 48 hours applies legally.

Right to Appoint a Proxy [Section 105(1)]

• Every member entitled to attend and vote at a meeting has a right to appoint another person as proxy.
• The proxy can attend and vote instead of the member.
• Proxy can be appointed for both on a poll and on a show of hands (subject to restrictions below).

Who Can be a Proxy

• A proxy need not be a member of the company.
• Any individual can be appointed as proxy, subject to the company’s Articles of Association.

Number of Proxies a Person Can Hold [Section 105(2)]

• A person cannot act as proxy for more than 50 members.
• Further, he/she cannot hold proxies representing more than 10% of the total share capital of the company carrying voting rights.
• If a member holds more than 10% of the share capital, he may appoint a single person as proxy, who shall not act as proxy for another person.

Rights of Proxy [Section 105(7)]

• A proxy has the right to attend and vote at the meeting on behalf of the member.
• However, unless the Articles provide otherwise:
  • Proxy cannot speak at the meeting.
  • Proxy cannot vote on a show of hands.
  • Proxy can only vote on a poll.

Revocation of Proxy

• A proxy can be revoked by the member at any time before the meeting or by attending personally.
• Presence of the member in the meeting nullifies the proxy’s authority.

Exceptions to Proxy Rights

• Provisions of Section 105 do not apply to:
  1. Section 8 Companies (i.e., charitable and non-profit companies).
  2. Companies not having a share capital (except where specifically provided).

Penalties for Improper Invitations

• The company (or its officers) cannot issue proxy appointment invitations or suggest names at the company’s expense.
• Doing so results in heavy penalties for officers (up to ₹50,000)

Member vs Proxy Rights

proxy framework is more than a compliance technicality—it’s a cornerstone of shareholder rights and a shield against exclusion from vital corporate decisions. Careful management and understanding benefit both companies (through smoother, more legitimate meetings) and shareholders (by empowering their influence without barriers).