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Special Resolution and Ordinary Resolution

Courtesy/By: Joanna Lisa Mathias | 2021-01-23 16:15     Views : 228

A resolution passed by a simple majority of votes is an ordinary resolution. A resolution shall be an ordinary resolution, as provided for in subsection (1) of section 114 of the notice of such a resolution is duly given. The votes cast in favor of the resolution exceed the votes cast against the resolution if any. The Chairman's casting a vote shall, if exercised, be counted as the ordinary resolution for deciding the resolution. The voting method could be by showing hands, electronic voting, voting, or any other permitted method or postal ballot. It is necessary to count the number of votes of only the 'entitled and voting' members. Therefore, it is unnecessary to count individuals who abstain from voting or are not permitted to vote (whether under the provisions of this Act or otherwise). An ordinary resolution is required wherever a provision of the Act or articles provides for the passing of a resolution by the company or authority given by the company at the company's general meeting or approval without mentioning the nature of the resolution. Besides, either the company or the member proposing the resolution may give the notice required to be given. As per section 114(2) of the Companies Act 2013, a special resolution is defined. The key points of a special resolution are that the notice was given following the act. The intention to propose a resolution is duly specified. The votes cast in favor of the resolution shall not exceed three times the total number of votes cast against the members' resolution. Thus, the resolution is adopted with 75% of the valid votes. 

A 'motion' is proposed as the resolution. A motion becomes a resolution only after the requisite majority of members have adopted it. A motion should be in writing, signed by the mover, and put to the chairman's vote at the meeting. In the case of company meetings, only the motions that are covered by the agenda are proposed.

In the course of the discussion, the motion being discussed may be subject to an amendment. An amendment is any modification to a member's proposed main motion before it is voted upon and adopted. Any member who has not already referred to the main motion or who has not previously moved an amendment may propose an amendment, but a formal motion cannot be amended. Like the main motion, an amendment, signed by the mover, should typically be in writing. The chairman has the right to accept or reject the amendment on the grounds of inconsistency, Irrelevance, redundancy, etc.

The major differences between ordinary resolution and special resolution are such.

  • The Ordinary Resolution is one in which the resolution requires a simple majority to be moved by the general meeting. A special resolution means a resolution requiring a simple majority to pass a resolution at a general meeting.
  • It is compulsory to file a copy of the ordinary resolution with the registrar, signed by the association's offices, only in such cases. A printed or handwritten copy of a special resolution, including the company official's signature, must be sent within 30 days to the Company Registrar (ROC).
  • The ordinary resolution requires at least 51 percent of the members' consent to approve the resolution. The special resolution, on the other hand, requires at least 75 percent support for the resolution.

 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code Legal and Tax shall not be responsible for any errors caused due to human error or otherwise.

Courtesy/By: Joanna Lisa Mathias | 2021-01-23 16:15