Q.Distinguish between an Ordinary Resolution and a Special Resolution.

Company decisions are put to shareholders as one of two kinds of resolution, and the choice depends on how significant the matter being decided actually is.

Section 114 of the Companies Act, 2013 distinguishes between two types of resolutions passed at a general meeting.

An Ordinary Resolution is passed when the votes cast in favour of the resolution (by members present in person, by proxy, or through postal ballot) simply exceed the votes cast against it — a simple majority. Ordinary resolutions are used for the routine, recurring business of a company, such as adopting the annual financial statements, declaring a dividend, or appointing an auditor.

A Special Resolution, by contrast, requires the votes cast in favour to be at least three times the votes cast against — that is, at least a three-fourths (75%) majority of the votes cast. Because of this much higher threshold, special resolutions are reserved for matters that fundamentally alter the company's structure or character, such as altering the objects clause in the Memorandum of Association, altering the Articles of Association, changing the company's name, or reducing its share capital. …

Students sometimes state the special resolution threshold vaguely as "a majority" without specifying the three-fourths figure, whic …