Section 106 Restriction on voting rights – Companies Act 2013

Section 106 shall come into force on 12th September, 2013 vide Notification No. S.O. 2754(E) dated 12.09.2013.

Amended and updated notes on section 106 of Companies Act 2013. Detail discussion on provisions and rules related to restriction on voting rights.

Chapter VII (Sections 88122) of the Companies Act, 2013 (CA 2013) deals with the provisions related to management and administration. Section 106 of CA 2013 provides for restriction on voting rights.

Recently, we have discussed in detail section 105 (Proxies) of CA 2013. Today, we learn the provisions of section 106 of Companies Act 2013 read with the Companies (Management and Administration) Rules, 2014.

Section 106 of the Companies Act, 2013 has been notified by the Ministry of Corporate Affairs (MCA) vide Notification No. S.O. 2754(E) issued dated 12.09.2013. This notification shall come into force from 12th September, 2013 i.e. the commencement date of section 106 is 12-09-2013.

Name of ActThe Companies Act 2013
Enacted byParliament of India
Administered byMinistry of Corporate Affairs (MCA)
Number of Chapters29
Number of Sections484 (470-43+57)
Number of Schedules7
You are reading:
Chapter No.VII
Chapter NameManagement and Administration
Section No.106
Section NameRestriction on voting rights
Monthly Updated EditionCompany Law PDF

Section 106 of Companies Act 2013: Restriction on voting rights

Section 106 shall come into force on 12th September, 2013 vide Notification No. S.O. 2754(E) dated 12.09.2013.

(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.

(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.

(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.

Exception/ Modification/ Adaptation:

1) In case of Private company, section 106 shall apply unless otherwise specified in this section or the articles of the company provide otherwise. – Notification No. G.S.R. 464(E) dated 5th June, 2015.

2) Section 106 shall apply in case of a Specified IFSC public company, unless otherwise specified in the articles of the company. –Notification No. G.S.R. 08(E) dated 4th January, 2017

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