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Sir,
In th context of Bushell vs Faith what does it mean by ” weighted voting rights can make removal impossible” ?Hi Sourav,
Good question. Imagine for example there are three directors A, B and C. Each are also shareholders with say 100 shares each. To remove a director an ordinary resolution i.e. more than 50% is required.
Normally voting would be on a 1 vote for every 1 share owned. So in the example above if A and B want to remove C they would be able to as together they would have a combined total of 200 votes i.e A has 100 votes and B has 100 votes. C would also have 100 votes but that would not prevent him being removed.
If, however, C has weighted voting rights then he might for example have 3 votes for every 1 share. Therefore, C would now have 300 votes and this would block A and B from removing him as director. In fact it would make it impossible going forward to remove him as A and B will never have enough votes to remove C due to C’s weighted voting rights.
I hope this clarifies?
Kind regards,
Vijay
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