Resolution Definition

Any decision made by a corporation acting as an artificial organization must take the form of a resolution. As a result, the definition of a resolution may be described as an agreement or a decision reached by the board of directors or other corporate members.

The business matters considered in a GM (General Meeting) are proposed within a corporation. A proposal is made and delivered to the conference as the "resolution." A motion is referred to be a resolution if all of the in-attendance members adopt it in unanimity.

Type of Resolution

There are three types of resolutions that are unanimous, special, and ordinary. Board meetings don't have the idea of special resolutions, and there are few situations when unanimous approval is necessary. The case of general meetings, however, covers all three. Here we discuss two types of resolution with detailed information as follows:

1. Ordinary resolution

An ordinary resolution receives more "for" than "against" votes. It is a resolution that has been supported by more than half of the delegates or attendees who were in attendance at the General Assembly. One of the following methods, such as hand display, polling, or electronically, should be used to count the votes supporting the resolution. The member must get the necessary information on the conference's opening. In actuality, the absence of participants will not be considered. The AGM (Annual General Meeting) must make an ordinary decision to conduct regular business. The following are indications by well-known companies:

1. Approval of the final accounts.
2. Announcement of the dividend.
3. Directors are appointed and retired.
4. Retirement, the selection of auditors, and the determination of their remuneration.

2. Special resolution

A Special Resolution (SR) is a resolution for which the proposal must have three times as many votes in favor as against it. A special resolution must be adopted at the regularly scheduled general meeting for the organization to accomplish many things. As SR explicitly requested, a resolution should be made, and the members should be appropriately notified about the General Meeting. The members who are present in person, by proxy, or by postal ballot must all vote to approve the resolution, whether it is done so manually, electronically, or both.

For reasons such as a special resolution is required:

1. Modifications to the Memorandum of Association's Objects Clause.
2. Modifying the Memorandum of Association to reflect a company's "Registered Office" change from one state to another.
3. Altering the association's articles of incorporation.
4. Decrease in the share capital.
5. Making changes to the contract's terms as described in the prospectus.
6. Modifying the rights of shareholders.
7. Expanding the maximum number of directors to more than 15 directors.
8. Elimination of an auditor
9. Repurchase of shares.

Information about Ordinary Resolution and Special Resolution

1. Ordinary resolutions are those for which the General Meeting needs a simple majority to approve them. A special resolution needs to be approved by a supermajority to be adopted by the General Assembly.
2. Most members, or at least 51%, must vote in favor of the ordinary resolution for acceptance. On the other hand, the special resolution needs at least 75% of the members' support to pass to approve the proposed modification.
3. Only in specific circumstances may the registrar get a copy of an ordinary resolution signed by the company officer. The Registrar of Companies (ROC) must receive a hand-written copy of a special resolution within 30 days that bears the officer of the company's signature.
4. The ordinary resolution for standard business transactions has been approved. However, a specific business can be operated in line with the requirements of the Companies Act by a special resolution or an ordinary resolution.

Special Notice Resolution [Section 115]

It is not a distinct category of resolution. Instead, it is more like an ordinary resolution, except that the mover must notify the new location of the resolution 14 days in advance. Upon receiving such a notice, the corporation will announce the resolution members at least seven days before the conference in the same manner as the meeting notice. Members having a minimum of 1% of the voting power should give the firm special notice of their decision to submit such a resolution.

Conclusion

In an organization, meetings are held to make decisions by casting votes on particular motions brought forward during the session. Resolutions are only the company's expressed intent. An ordinary resolution is required to conduct business other than ordinary, such as paying the cost accountant or changing the company's name after the central government orders it. Examples of this business include changing the company's name to ROC when the previously reported name needs to be revised.

The issuing of shares in sweat shares, the modification of association articles, the purchase of shares or other securities, the change of the prospectus's objectives, the relocation of the company's registered office, and other topics are examples of special resolution topics.