Voting by Proxy

The concept of voting by proxy is easy enough. Shareholders vote but they need not vote themselves. They can designate others to vote for them, and this designation is known as voting by proxy.

Though the concept is easy, there are also quite a few very specific points to remember. 

~ Every shareholder entitled to vote may authorize another person to vote for that shareholder by signing a written proxy. The shareholder (or someone appointed by the shareholder) will appoint the proxy by signing an appointment form.

~The proxy appointment is valid only for the term provided in the appointment form.

~If no term is provided, proxies expire after 11 months unless the appointment was made irrevocable. 

~The default rule is that proxies are revocable by the shareholder. To avoid this default, not only must the proxy provide that it is irrevocable but the proxy holder (the person appointed to vote for the shareholder) must have an interest in the shares. This interest can be as a pledgee, purchaser, employee, etc. 

~Even if the default does not apply and thus the proxy is deemed irrevocable, it may still be revoked by a bona fide purchaser of the shares without notice of the proxy. Yet again, the BFP wins.