Wednesday, July 25, 2012
What is resolution?, Different types of resolution of a company meetingHello dear friends here you will get What is resolution?, Different types of resolution of a company meeting, definition of resolution,
In a company meeting different motions can be made by the members but al motion may not be culminated into resolution.
A motion or proposal becomes a resolution when it is adopted by the majority members of the meeting. Thus it is clear that a resolution is a decision passed in the meeting.
Types of resolution: Resolutions are of three types
1. Ordinary resolution
2. Special resolution
3. Resolution requiring special notice
1. Ordinary resolution: A resolution will be considered as ordinary resolution if the votes cast in favor of the resolution exceeds the votes cast against it, at a meeting. The votes may be cast by member either in person or by proxy. The following business is transacted with ordinary resolution:
i. Appointment of auditors
ii. Fixation of auditor’s remuneration
iii. Declaration of dividend
iv. Election of directors
v. Approval of profit and loss account and balance sheet
vi. Issue of shares of a discount.
2. Special resolution: A special resolution is required for deciding important matters. For example; issues like reduction of capital or winding up must be passed by special resolution. A resolution will be termed as special resolution if it fulfills the following conditions:
i. The notice of the general meeting must include the issue of passing special resolution
ii. The number of votes cast in favor of such resolution must be at least three times the number of votes cast against it.
Special resolution need to be passed for the following issues:
i. Reduction of capital ii. Alteration of memorandum of association
iii. Alteration of articles of association
iv. Winding up etc.
3. Resolution requiring special notice: This is one kind of special resolution but it requires special 14 days notice to the shareholders before the meeting these types of resolution need to be passed for extra-ordinary matters. Three forth ¾ of the total members need to cast their votes in favor of such resolution to pass it at the meeting. The following resolution required special notice:
i. Removal of a director before the expiry of his term
ii. Appointment of a director in place of a removed director, etc.