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MCQs · Q10

Q.A Special Resolution under Section 114 of the Companies Act, 2013 requires votes in favour to be:
(A) A simple majority of votes cast
(B) At least three-fourths of the votes cast
(C) A unanimous vote of all members
(D) At least half of the total membership of the company

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Under Section 114 of the Companies Act, 2013, a Special Resolution is passed only when the votes cast in favour of it are at least three times the votes cast against it — which is commonly expressed as requiring at least a three-fourths (75%) majority of the votes cast. This is a materially higher bar than an Ordinary Resolution, which needs only a simple majority (votes in favour merely exceeding votes against).

The higher threshold for a Special Resolution is deliberate: it is reserved for matters that fundamentally alter the company's structure or character, such as altering the Memorandum of Association or Articles of Association, changing the company's name, or reducing its share capital. Requiring overwhelming shareholder support for such changes protects minority shareholders from having the company's fundamental character altered on the strength of only a bare majority. …

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