Resolutions 🗳️

Definition: A resolution is a formal decision taken at a company meeting by voting.

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Types of Resolutions 📋

1. Ordinary Resolution (Section 114)

Meaning: Decision by simple majority (more than 50%).

Voting Formula:

• Votes FOR > Votes AGAINST.

Used For (Ordinary Business):

• Approval of financial statements.
• Declaration of dividend.
• Appointment of directors.
• Appointment of auditors.

Example: 100 votes. 51 for, 49 against = Passed.

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2. Special Resolution (Section 114)

Meaning: Decision by 3/4th majority (75%).

Requirements:

• 21 days' notice must mention it's a special resolution.
• Votes FOR ≥ 75% of votes cast.

Used For (Important Matters):

• Alteration of Articles of Association.
• Change of name or objects of company.
• Issue of shares at discount.
• Buy-back of shares.
• Loans to directors.
• Reduction of share capital.
• Merger/Amalgamation.

Example: 100 votes. 75 for, 25 against =

Passed (exactly 75%).

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3. Resolution Requiring Special Notice (Section 115)

NOT a type of resolution. It's a notice requirement.

Meaning: Member must give 14 days' notice to company before moving resolution.

Used For:

• Removal of director before term expires.
• Appointment/removal of auditor before term expires.

Example: Shareholder wants to remove MD. Must give 14 days' notice. Then ordinary resolution is passed at meeting.

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4. Written Resolution (Optional for Private Companies)

• Decision taken WITHOUT holding meeting.
• All members sign written resolution.
• Saves time and cost.

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Voting Methods 🙋

1. Show of Hands (Default)

• One member = One vote (regardless of shares held).
• Used for routine matters.

2. Poll (On Demand)

• One share = One vote.
• More democratic (reflects shareholding).
• Can be demanded by:
  • 5 members OR
  • Members holding 10% voting power.

Example:

• Show of Hands: A (1 share) = 1 vote. B (100 shares) = 1 vote.
• Poll: A (1 share) = 1 vote. B (100 shares) = 100 votes.

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Comparison Table 📊

Type	Majority Required	Notice Requirement	Used For
Ordinary Resolution	> 50%	21 days (general notice)	Routine matters
Special Resolution	≥ 75%	21 days (must state"special resolution")	Important matters
Resolution with Special Notice	Depends (usually ordinary)	14 days to company	Removal of director/auditor

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Quiz Time! 🎯

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💡 Final Wisdom: "Ordinary for routine, Special for important. Democracy in action!" 🗳️

Next up: Minutes - Recording the meeting! 📝