A complete guide on ” What is Ordinary Resolution?” “What is Special Resolution?” And Difference between Ordinary Resolution and Special Resolution
Table of Content
Companies’ Articles of Association and Memorandums of Association contain clauses that lay out the rules for governing and administering them. Nonetheless, Company directors or shareholders may approve resolutions or alter the constitution itself to make such decisions. It can be delivered at General Meetings (regular and extraordinary resolutions) as well as Board meetings. In this article information such as “What is Ordinary Resolution?”, “What is Special Resolution?”, And the Difference between Ordinary Resolution and Special Resolution is mentioned.
What is an Ordinary Resolution?
An ordinary resolution is a resolution passed by the shareholders of a company by a simple or bare majority, either at a called meeting of shareholders or by circulating a resolution for signature in certain common law jurisdictions.
Information on Passing of Ordinary Resolution
A majority vote-based ballot resolution is known as an ordinary resolution. The resolution shall be a reasonable resolution if a duly delivered notice of that resolution reaches, where necessary, votes cast in support of the resolution, as stated in sub-paragraph (1) of paragraph 114 of the Companies Act.
The Chairman’s vote shall be regarded as an ordinary decision used to resolve the dispute. Voting can take the form of electronic voting, polling, or other kinds of voting permitted by hand or postal ballot. Only eligible and voting members will be counted in the total number of votes.
As a result, members who abstain or are not entitled to vote (by the terms of this Act or otherwise) will not be tallied. An order is required where the Act’s rules or articles provide for the adoption of a resolution by the company and authority at the general meeting or approval of the company without defining the purpose of the decision to be taken. The organisation or the member presenting the resolution, on the other hand, can provide the required notification.
What is Special Resolution?
A Special Resolution is a resolution in which the number of votes in favour must be three times the number of votes against it. Certain acts can only be done by the corporation if a special resolution is approved at a properly convened general meeting. The members should be given proper notice of the general meeting, and the notice should include the desire to purpose the resolution as SR, which should be indicated expressly.
Information on Passing of Special Resolution
The following are important requirements for passing a special resolution:
The intention to present a resolution as a special resolution was clearly stated in the announcement.
As required by the Companies Act, notice was given.
The total number of votes voted in favour of the resolution must not exceed three times the total number of votes cast against it. To put it another way, the resolution was passed with 75 percent of the valid votes.
Hand voting, electronic voting, polling, or any other permitted method or postal balloting are all acceptable methods of voting. Only the votes of representatives who are “entitled and vote ” will be counted. Citizens who do not vote or who are not allowed to vote (whether or not within the terms of this Act) will not be tallied. As a result, the appropriate notification may be provided by either the organization or the member proposing the resolution.
Procedure for Passing a Resolution
Until it wins approval to be passed, a proposed resolution is referred to as a motion. It becomes a resolution after the appropriate permission is acquired in accordance with the provisions of the Companies Act, 2013. When it comes to topics that require a special resolution, they must be included in the meeting’s agenda, which is provided at the time the meeting notice is sent out. Motions arising from negotiations may be authorized for subjects that do not require a special determination under the Act.
Each resolution is normally introduced by one member and then seconded by another member, according to Secretarial Standard-2 paragraph 7.1. During the debate, the motion under consideration may be changed. The primary motion can be amended in any number of ways. An amendment, on the other hand, can only be changed once. When a motion contains a large number of amendments, a new motion may be voted, containing all of the amendments, and the old motion may be withdrawn after receiving common consent.
Where the resolution is a special resolution, Form MGT – 14 is needed to be lodged with the Registrar of Companies within 30 days of the resolution being passed. The following are some of the attachments:
A copy of the resolution that was passed is attached.
Section 102 of the Companies Act of 2013 requires an explanatory statement.
Copy of the AOA of Company Incorporation (where any change is made).
A copy of the MOA is available (where any change is made).
Difference Between Ordinary Resolution and Special Resolution
When a super majority is necessary to pass a resolution at a general meeting, it is referred to as a Special Resolution.
Ordinary Resolutions are used when a simple majority is necessary to move a resolution at a general meeting.
The special resolution, on the other hand, requires at least 75% of the vote to pass.
Acceptance of the ordinary resolution requires the consent of at least 51 percent of members.
Special business transaction needs a Special Resolution.
Any ordinary business transaction or transaction mentioned in the Companies Act requires Ordinary Resolution.
Within 30 days, the Company Registrar (ROC) must receive a printed or handwritten copy of a special resolution that contains the signature of a company official.
It is only required in specific circumstances to file a copy of the ordinary resolution with the Registrar, which must be signed by the organization’s offices.
Meetings are convened at a firm to make decisions by voting on formal proposals presented to the meeting. Resolutions are simply the company’s declaration of intent. Ordinary Resolution is adequate to do business; however, there are several exceptions. Change of business name at the instruction of the ROC when the previously registered name is erroneous or incorrect, or Rectification of company name as instructed by the Central Government, payment of cost accountant
The issue of sweat equity shares, changes to the provisions of the memorandum of association, changes to the articles of association, buybacks of shares or securities, and changes to the objects of the prospectus, among other examples, require Special Resolution.
ROC Annual Filing
Every Private Limited Company must file returns on an annual basis. Make your company ROC compliant.
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