Resolutions of Company Meetings

Ordinary Resolution: Section 81 of the Companies Act, 1994 provides that a resolution shall be an ordinary resolution when at a  general meeting , of which the notice required under this Act has been duly given , the votes cast in favor of the resolution by members exceeds the votes cast against the resolution. The ordinary resolution is commonly used for ordinary business transacted in the general meeting such as , declaration of dividends, appointment of auditor, adoption of annual accounts, election of directors, issue of shares at discount, appointment of secretary etc.

Certain items of special business also require ordinary resolutions under the companies Act 1994

i) Issue of shares at a discount

ii) Alteration of the share capital.

iii) Appointment of Branch Auditor.

iv)  Increasing or reducing the number of directors with the limits fixed by the Articles.

v)  Approval to the Board of Directors for exercising any of the powers.

vi)  Appointment of the sole selling Agent.

vii) Remuneration payable to the directors.

viii) Investment in any other body corporate.

ix) Voluntary winding up in specified circumstances.

Special Resolution: Section 87 of the Companies Act 1994 provides that a resolution shall be a special resolution when ----

a) The intention to propose the resolution as a special resolution has been duly specified in the notice calling the General Meeting or other intimation has been given to the members of the resolution;

b) The notice required under this Act, has been duly given for the General Meeting and

c) The votes cast in favor of the resolution by the members in person or by proxy are not less than three times the number of votes, if any, cast against the resolution. The Articles of Association may also provide that certain types of business shall be approved by a special resolution. Generally, in the following cases, special resolution is required------

1) Change of the registered office from one state to another and change of object clause of memorandum of Association.

2) Change of the name clause of the a Memorandum of Association.

3) Alteration in the Articles of Association.

4) Creation o Reserve Capital.

5) Removal of registered office from one place to another place in the same state.

6) Reduction of Capital

7) Payment of interest out of capital to the shareholders.

8) Appointment of inspectors to investigate company’s affairs.

9) Fixation of Directors remuneration, if the Articles provides so and sanctioning of remuneration to a director on the basis of percentage of profit.

10) Permission to director to hold an office of profit under the company.

11) For making the liability of directors unlimited.

12) Making loans to other companies under the same management.

13) Voluntary liquidation of a Company.