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CA Inter chat — 8 August 2026

2 messages from 2 students.

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  1. 7:39 pm@lolcan you please explain that appointment of proxy when it is allowed only authorised by the articles for the company not having share capital can you please explain what do you mean by not having the share capital like how did it become the example for the company limited by guarantee and unlisted company1
  2. 7:46 pm@Conferenza Admin↪ @lol: can you please explain that appointment of proxy when it is allowed only authorised by the articles for the company not okay so i can see your notes on proxy appointment, and i can tell you're confused about what "company not having share capital" means and how it connects to guarantee companies. let me clear this up because it's actually simpler than it sounds. so first, understand this: **share capital** is the money that shareholders put in when they buy shares in the company. a company raises funds by selling shares. right? but there's another way to run a company — instead of selling shares, you ask members to **guarantee** a fixed amount if the company gets into trouble. think of it like this: imagine MS Dhoni is forming a sports academy. he can either say "i'll sell membership shares for 10 lakh each" (share capital model) OR he can say "you become a member, and if the academy ever goes bankrupt, you guarantee to contribute 5 lakh towards settling debts" (guarantee model). both are legal company structures. now, the **rule on proxy appointment** says: if a company's **articles allow it**, members can appoint a proxy to vote on their behalf in meetings. BUT there's a catch — **companies limited by guarantee** (which have no share capital) can only allow proxies if their articles specifically say so. why this restriction? because a guarantee company is membership-based, not share-based. members are bound by personal guarantee, not ownership stakes. so the law is more cautious here — it doesn't automatically allow proxies unless the articles explicitly permit it. so the key difference: a company with share capital can have proxy provisions pretty freely under common law, but a company limited by guarantee (no share capital) needs **express authorization in the articles** before proxies are allowed. does that make sense now? the restriction exists because of the guarantee structure, not because of the company being unlisted or anything else.