1. Powers of the Shareholders:Shareholders transact business at the general body meeting by passing resolutions. The resolutions
passed by the shareholder are of two types, namely,
Ordinary resolution:- A resolution shall be an ordinary resolution when the votes given in favour of
the resolution by the members exceed the votes cast against the resolution.
Thus, a majority of more than fifty percent is required to get the ordinary resolutions passed. Thus a
group of shareholders holding fifty one percent or more shares in a company may get a motion
which is put to vote by poll, passed by ordinary resolution.
Special resolution:- A resolution, to be special resolution, the following conditions should be
fulfilled, namely,
-the intention to propose the resolution as a special resolution is to be duly specified in the notice
calling the meeting.
-the votes given in favour of the resolution by the members are NOT LESS THAN THREE TIMES
THE VOTES , if any, given against the resolution.
Thus, a group of shareholders holding at least three fourths of the total number of shares in a
company can, acting together, can ensure that the special resolutions before a general body meeting
are decided in their favour.
A resolution put before a general meeting shall, in the first instance, be decided (unless a poll is
demanded) by a show of hands. In a voting by show of hands, it is ONE PERSON-ONE VOTE. In a
voting by poll, ONE SHARE-ONE VOTE.
Some of the important transactions which can be passed by an ordinary resolution are as follows :-To rectify the name of the company ( section 22)
-To change the terms of contracts in prospectus/statement in lieu of prospectus ( section 61)
-To issue shares at a discount. (section 79)
-To alter share capital of the company (section 94)
-To cancel or redeem debentures (section 121)
-To declare dividend (section 205)
-To approve annual accounts and balance sheet (section 210)
-To appoint directors (section 255)
-To appoint directors by rotation (section 256)
-To appoint a director who is not a retiring director (section 257)
-To increase or decrease the number of directors (section 258)
-To remove a director and appoint another director in his place (section 284)
-To give consent for the exercise of power by the Board (section 293)
-To approve appointment of sole selling agents (section 294)
-To approve the appointment and remuneration of director (section 269 and 309)
-To appoint an alternate director in the absence of any power given by the articles of association
(section 313)
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2. Some of the important matters requiring special resolution are as follows:-To alter the provisions of the Memorandum of Association (M/A) so as to change the registered
office of the company from one state to another(confirmation of Company Law Board is also
necessary) or to change the objects clause of the company (section 17)
-To change the name of the company with the approval of the central govt.(section 21)
-To alter the Articles of Association (A/A) (section 31)
-To authorize buy back of securities of the company(section 77A)
-To authorize issue of sweat equity shares( section 79A)
-To issue further shares to persons other than existing members [section 81(1A)]
-To issue debentures having conversion option. [section 81(3)]
-To decide that any part of the uncalled share capital shall not be called up except for the purpose of
winding up (section 99)
-To reduce the share capital subject to the confirmation of the court(section 100)
-To vary the rights of different classes of shareholders. This can be done either by obtaining the
consent in writing of the holders of 3/4ths of issued capital of that class or by special resolution of
shareholders of that class.(section 106)
-To remove the registered office of the company outside the local limits of the city, town or village
in which it is situated.(section 146)
-To commence any new business [section 149(2A)]
-To keep registers and returns in a place other than a place within the city, town or village in which
the registered office of the company is situated.(section 163)
-To pay interest on share capital under certain circumstances (section 208)
-To determine the remuneration payable to any director including managing director, if articles
so require(section 309)
-To authorize a director, a relative or partner of such director, director of a private company of which
he is a director or manager to hold office or place of profit in the company(section 314)
-To alter the M/A for rendering the liability of its directors or manager unlimited (section 323)
-To make loan to or give guarantee or provide security, make investment in shares of other bodies
corporate beyond a certain limit (section 372A)
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