Commercial Correspondence and Secretarial Practice · Ch 6 — The Meetings of the Company
Resolutions — Ordinary, Special and Special Notice
Resolutions — Ordinary, Special and Special Notice
The formal decision of a meeting is expressed as a resolution. The Companies Act, 2013 classifies resolutions passed at general meetings into two main kinds under Section 114, and separately recognises a procedural category under Section 115.
| Type | Majority needed | Typical business |
|---|---|---|
| Ordinary resolution | Votes cast in favour are more than votes cast against (a simple majority) | Adoption of annual accounts, declaration of dividend, appointment/reappointment of directors and auditors, most routine business |
| Special resolution | Votes cast in favour are not less than three times the votes cast against (commonly described as a three-fourths majority), and the notice must state the intention to move it as a special resolution | Altering the Memorandum or Articles, shifting the registered office out of the city, reducing share capital, buy-back of shares, issuing shares otherwise than on a rights basis, winding up by the Tribunal on a members' petition |
Resolutions requiring special notice — Section 115. For a small list of resolutions the Act singles out as sensitive — for example, removing a statutory auditor before the expiry of his term, appointing an auditor other than the retiring auditor, or removing a director under Section 169 — an ordinary member wishing to move the resolution must first give the company a special notice at least 14 clear days before the meeting (excluding the day of notice and the day of the meeting). The notice must be signed by members holding not less than 1% of the total voting power, or holding shares on which an aggregate sum of not less than ₹5 lakh has been paid up, as on the date of the notice. On receiving such a notice, the company must give its members notice of the resolution at least 7 days before the meeting. This is simply a stricter notice procedure — the resolution itself is still passed, once moved, by an ordinary majority unless the specific matter separately requires a special resolution. …
A resolution passed at a general meeting by a simple majority — the votes cast in favour exceed the votes cast against — as defined in Section 114(1) …
A resolution passed at a general meeting where the votes cast in favour are not less than three times the votes cast against, and where the intention to propose it as a special resolution has been specified in the …
Under Section 115, a notice that must be given to the company, at least 14 clear days before the meeting, by members holding not less than 1% of total voting power or ₹5 lakh paid-up share value, before certain listed resolutions (such as remo …