Distinguish between the following: Ordinary Resolution and Special Resolution
CS Professional · Drafting, Pleadings and Appearances · PYQS · June 2019
Distinguish between the following: Ordinary Resolution and Special Resolution
Answer & Explanation:
Ordinary resolution: An ordinary resolution is one which is passed in the company's general meeting by a simple majority of votes i.e.- 51%. No notice is required to be given for moving an ordinary resolution. All matters relating to the company's business, except those which need to be settled by a special resolution, are settled by an ordinary resolution. Special resolution: Special Resolution means a resolution in which special majority is needed to pass the resolution at the general meeting i.e the votes cast in favor of the resolution, whether in person or by proxy, should not be less than three times the votes cast against the resolution by members so entitled. A prior notice needs to be given for moving a special resolution in any meeting of the company and the notice should contain the intention to propose the resolution as special resolution should be mentioned specifically. A special resolution is meant to make decisions in important matters and protect the rights of company's members. The significant differences between ordinary resolution and special resolution are: Ordinary Resolution is one wherein simple majority is required to move the resolution at the general meeting. Special Resolution means a resolution in which supermajority is needed to pass the resolution at the general meeting. In the ordinary resolution, consent of at least 51% members, is required for the resolution to be passed. On the other hand, the special resolution requires the consent of at least 75% members, in favour of the resolution. The copy of an ordinary resolution, signed by the officer of the company should be filed with the registrar only in certain cases. As against this, a printed or handwritten copy of a special resolution, containing the signature of the officer of the company must be filed with the Registrar of Companies (ROC) within 30 days. Ordinary Resolution is passed to transact ordinary business. However, a special business can be transacted via special resolution or ordinary resolution, as per the requirements of the Companies Act, 2013.
Topics: Company Law
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