Q.Explain the concept of a proxy under Section 105 of the Companies Act, 2013, along with the rules governing the appointment of a proxy.

A proxy lets a member who cannot attend in person still have their vote counted, but the law surrounds the appointment with rules — a 48-hour deposit deadline, no right to speak, and caps on how many members one proxy-holder may represent.

Meaning. Section 105 of the Companies Act, 2013 entitles a member of a company who is entitled to attend and vote at a meeting to appoint another person, called a proxy, to attend and vote at that meeting on his behalf, instead of attending in person. This provision exists precisely because many members — particularly small shareholders spread across the country — cannot realistically attend every meeting in person, yet should still be able to exercise their vote.

Who can be a proxy. A proxy need not be a member of the company; any competent adult the member trusts can be appointed. The one statutory exception is a company registered under Section 8 (formed for charitable or similar not-for-profit objects), where the proxy must himself be a member of that company.

Form and deposit — the 48-hour rule. The instrument appointing a proxy must be in writing, duly signed by the appointing member (or their lawfully authorised attorney), and must be deposited with the company at least 48 hours before the time fixed for the meeting. A proxy instrument deposited after this deadline is not treated as validly appointed for that meeting. This gives the company adequate time to check the instrument's validity before the meeting begins.

Restricted rights of a proxy. A proxy is not entitled to speak at the meeting — the right to address the meeting remains with members personally present. A proxy is also entitled to vote only on a poll, and not on a show of hands, since a show of hands by long-standing convention counts only members who are themselves physically present.

Cap on multiple appointments. To prevent one individual from wielding disproportionate voting power by collecting proxies from many small, unconnected shareholders, the Act caps how widely one person can act as proxy: a single person may act as proxy for members not exceeding fifty (50) in number, and holding, in the aggregate, not more than ten percent (10%) of the total share capital of the company carrying voting rights. A member who individually holds more than 10% of such voting share capital may still appoint a single proxy for their own shares, provided that proxy is not also representing any other member. …

Students often believe a proxy can vote on a show of hands, or can speak at the meeting like a member present in person. Both are incorrect: a proxy's rights are deliberat …