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Special Resolution – Everything You Want to Know

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Special Resolution – Everything You Want to Know, Find All the details about Special Resolution. Check Complete details regarding Special Resolution. My this new article talks about the details regarding the special resolution, in which the details regarding what are resolutions, why are they required to be passed, when are they required to be passed, what matters are covered under special resolution, what is meant by special resolution, what are the consequences if followed and all the other details. I have covered some of the details of the above in this article.

What is Resolution ??

As Company is a artificial person, it cannot take decisions on its own, it has to give authority or power to someone to take the decisions. The power is given to the Board of Directors of the company. Now if the company has issued shares for the public at the large, than it needs to take the consent of such shareholders also for taking the decisions. The method to take the decisions from the public is taken by resolution. When any resolution is passed by the company than the terms and conditions mentioned in it should be exactly satisfied and if not than penal provisions may apply to it.

There are many types of resolutions but majorly there are 3 types of resolutions :

  1. Ordinary Resolution
  2. Special Resolution
  3. Unanimous Resolution

Must Read – All you want to know about MOA and AOA

What is Special Resolution ??

Now we would talk about the Special Resolution, the meaning of special resolution which is covered u/s 114(2) which means :

  1. Intention of the same is to be mentioned in the notice which is sent to the members of the company.
  2. Company should have given notice to the members as per the regulations of the act.
  3. Votes in the favour of the resolutions must be not less than the 3 times the number of votes if any, against the resolution.

In simple words, special resolution is a resolution in which the intention of the resolution as special resolution has been specified in the notice and at least 3/4th votes required for passing the special resolution.

Must Read – Incorporation of LLP and its Relevant points

Cases where special resolution is required:

  1. For altering Articles of Association
  2. For altering Memorandum of Association
  3. For changing registered office of the company
  4. For changing the objects for which the money was raised which was mentioned in the prospectus.
  5. For entrenchment under section 5(3)
  6. For variation in the shareholders rights.
  7. For issue of Sweat equity shares
  8. For issuing depository receipts in foreign country
  9. For varying or changing the terms which are mentioned in the prospectus of the company
  10. For reducing the share capital
  11. For buy back or purchasing back its own shares
  12. For increasing the subscribed capital
  13. For issuing debentures which can further be converted into shares
  14. For appointing directors for a number of more than 15 in a company
  15. For removing auditor under section 139
  16. For changing the place for keeping the registers
  17. For excersizing some powers by the BOD for which they are not authorised
  18. For reappointment of Independent Director
  19. For any related party transaction
  20. For giving any loan, guarantee or for providing any security
  21. For fixing remuneration of a Director
  22. For removal of name of Company from ROC
  23. For appoinment of MD
  24. For investigation by CG
  25. For winding up of a company
  26. For voluntary Winding up
  27. For approval of scheme of amalgamation
  28. For conferring certain powers on Liquidator
  29. For disposal of books of account
  30. For application in Table-F in Schedule-I

This is the list where special resolution is required to be passed, but this may be illustrative list only, there may be many more cases where such resolution is required to be given.

Must Read – Incorporation of Pvt. Ltd. Company as per Companies Act 2013

Disclaimer :-

This notes has been Hand Written by the author. Any Information or any suggestion given in the notes are only from personal opinion and do not create any liability on the part of author. The author has exclusive rights over the documents. If any one found copying it will be liable for Legal Action.

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About Yash Shah

Yash Shah is passionate article writer and has written more than 100 articles in the field of Finance, Insurance, Stock Market, Company Law, Auditing, Taxation and many others. In case of any queries or suggestions, you can reach the author @ [email protected], you can also catch him on facebook @ yashshah299

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