Question

Answer the following question.

Explain the types of resolution

Answer 1

1. Ordinary Resolution (Section 114) : An ordinary resolution is the one which is carried in a meeting by a simple numerical majority i.e. more than 50% of votes. This means the number of votes in favour of the resolution must exceed the number of votes against it. Normally such resolution need not be filed with The Registrar of Companies. The notice of the meeting need not require to give explanation of the particulars of an ordinary resolution. E.g. approval of statutory report, Directors report, Auditors report, Profit and Loss account Balance Sheet, declaration of dividend. Alteration of share capital, election of directors, appointment of secretary and auditor and fix their remuneration etc.
2. Special Resolution : (Section 114 (2)) The resolution which is passed by a substantial numerical majority is known as special resolution. Special resolution is one which is carried in a meeting by a minimum of 75% majority. That number of votes in favour of motion should be 74 of the total votes cast. it is passed for transacting special business of the company. A 21 days' prior notice to the members about the Special resolution is necessary. The notice of the meeting specifically mentions that it is a special one. A copy of the special resolution must be filed with the Registrar of Companies through e-fling on Ministry Of Corporate Affairs (MCA) portal within 30 days of the date of its passing resolution.
   Examples of Special resolution:
   (1) Alteration in the Memorandum of Association. Like changes in the objects of the company or change in the name of the company (Section 13) or the location/address of The Registered Office of the company (Section 12)
   (2) Alterations in the Articles of Association of the company (Section 14)
   (3) Reduction m the authorised share capital of the company.
3. Resolution requiring a Special Notice (Section 115) : Resolution requiring a special notice is a special mode of passing certain resolutions. Such a resolution may be passed either by a special majority or ordinary majority as per the requirements of the Companies Act or Articles of Association of the Company. With respect to the resolution requiring a special notice, Section 190 of the Companies Act, 1956, provides that if. a member intends to move a resolution requiring a special notice, he must give 14 days notice to the company. Once such a notice is received, the company issues a similar notice to all the members at least 7 days before the meeting. The notice may be given either individually or by advertisement in newspapers having appropriate circulation. The Articles of Association specify the purposes for Which such a special notice is required. This resolution may be similar to an ordinary or a special resolution. The following matters call for such a resolution:
   (a) Not to reappoint the retiring auditors
   (b) Appointment of a person as an auditor other than the retiring auditor
   (c) Removal of a Director before the expiry of his term
   (d) Appointment of another person as a Director in place of the Director so removed
   (e) For getting approval for the appointment as Director of a person who is disqualified.
4. Resolution requiring Registration (Section 117) : The resolutions Which are required to be filed with the Registrar due to provisions made under the Companies Act, 2013 are called Resolution requiring Registration. These resolutions are to be filed along with the explanatory statements with the Registrar of Companies within 30 days from the date of passing such resolutions. These resolutions are :
   (i) All special resolutions.
   (ii) Resolution of the Board Meeting in connection with the appointment or reappointment of a Managing Director.
   (iii) Resolution for the voluntary winding-up of the company under Section 484 of the Companies Act.
5. Resolution by Circulation : Resolution by Circulation means a draft resolution is prepared by the Managing Director or by the Board and forwarded to all the Directors to pass. It is a resolution which is passed by circulating among the Directors or the members of the Board. Generally, resolution by circulation is passed when there is urgency and Board of Directors do not have sufficient time to call a meeting. Sometimes resolution by circulation is preferred to avoid the lengthy procedural requirements of convening the physical Board Meeting.