THE COMPANIES ORDINANCE, 1972

Voting Rights

118.—(1) The holders of all shares issued by a company shall be entitled to proportionate voting rights in respect of all resolutions proposed at general meetings of the company and at meetings of holders of the class of shares to which they belong.

(2)  The holders of all debentures issued by a company shall be entitled to proportionate voting rights in respect of all resolutions at meetings of holders of the class of debentures to which they belong,

(3)  Notwithstanding the provisions of subsection (1) a company, if its memorandum so provides, may issue non-participating preference shares which entitle the holders of such shares to proportionate voting rights in respect of resolutions proposed at meetings of the holders of shares of the class to which they belong, but not in respect of resolutions proposed at general meetings, or not in respect of all such resolutions :

Provided that the holders of such preference shares shall in all cases be entitled to proportionate voting rights in respect of a resolution voted upon at a general meeting if : —

(a)   the fixed dividend in respect of such shares has not been paid in full for the company's financial year ending next before the date of that general meeting and for all preceding financial years ; or

(b)   the resolution provides for the alteration of the memorandum or articles, or for the increase or reduction of the capital of the company, or for the issue of shares in the company, or for the winding up of the company ; or

(c)   the resolution falls within section 19.

(4)  In calculating the number of votes which a person entitled to proportionate voting rights may cast in respect of a resolution, there shall be ascertained the share with the smallest nominal value whose holder may vote upon the resolution, or the debenture which secures the smallest amount of principal whose holder may vote upon the resolution, and that share or debenture (as the case may be) shall entitle its holder to one vote, and shares with larger nominal values, or debentures which secure larger amounts of principal, shall entitle their respective holders to proportionate multiples of one vote.

(5)  This section shall apply to stock as though each stockholder held the shares from which the stock is derived, and as though those shares had not been converted into stock.

(6)  This section shall apply notwithstanding any provision in the memorandum or articles or in any debenture trust deed, debenture or other contract or instrument.

(7)  This section shall apply to an existing company : Provided that if the existing company has before the commencement of this Ordinance issued non-participating preference shares whose holders would, if the shares had been issued after the commencement of this Ordinance. have been entitled only to the voting rights mentioned in subsection (3), the holders of such shares shall be entitled only to the voting rights mentioned in subsection (3).

(8)  In this Ordinance shares whose holders are entitled to proportionate voting rights in respect of all resolutions proposed at every general meeting of the company, are referred to as shares carrying unrestricted voting rights or unrestricted votes.