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Difference between ordinary resolution and special resolution

enero 2, 2020

A ordinary resolution refers to a resolution, approved by the members of the company by an absolute majority. A special resolutionon the other hand, the resolution, affirmed by the members of society with a three-quarters majority.

In a company, the items to be dealt with in a GM (General Assembly) are presented as motions. The "motion" refers to a proposal submitted for discussion and adoption at the meeting. If the motion passed unanimously by the members present at the meeting, it is called termination. There are two types of resolution, which must be sent in different situations, they are Ordinary Resolution and Special Resolution.

So, let's discuss the differences between ordinary resolution and special resolution.

Comparative chart

Basis for comparison Ordinary resolution Special resolution
SenseWhen a simple majority is required at the general meeting to move the resolution, called ordinary Resolution.When the super majority is required at the general meeting, known as a special resolution.
Consent of membersAt least 51% of members should be in favor of the motion.At least 75% of members should be in favor of the motion.
Registration with ROCA copy of OR must be archived with ROC in some cases.A copy of SR must be submitted with ROC.
Business doneOrdinary affairs or special affairs, depending on the requirements of the law.Special affairs

Definition of ordinary resolution

By ordinary resolution is meant a resolution in which the votes cast in favor of the resolution exceed the votes cast against it. The resolution was confirmed by more than half of the members, present in person or delegated to the general assembly. It should be passed by one of the following methods, ie hand show, survey or electronically, in favor of resolution, by express votes.

The notice of convocation of the meeting must be duly delivered to the members. In addition to this, members who do not participate in the vote are not taken into consideration. In general, the ordinary resolution must be approved for the negotiation of ordinary affairs at the AGM (Annual General Assembly). Ordinary business includes the following activities:

  • Adoption of final accounts.
  • Dividend declaration.
  • Retirement and appointment of directors.
  • Retirement and appointment of auditors and fixing their fees.

Definition of special resolution

The special resolution (SR) is a resolution in which the votes cast in favor of the resolution must be three times higher than the votes cast against it. There are some things that can be done by the company only if a special resolution affirmed in the regularly constituted general meeting. The general meeting notice must be duly delivered to the members and the notice must contain the intention to define the resolution as SR to be specifically mentioned.

Termination must be approved by any method, such as voting by show of hands or voting or electronically by members present in person or by proxy or postal vote.

Key differences between ordinary resolution and special resolution

The significant points of difference between ordinary resolution and special resolution are discussed as below:

  1. The ordinary resolution is the one in which a simple majority is required to move the resolution to the general meeting. Special resolution means a resolution in which a higher majority is needed to pass the resolution to the general meeting.
  2. In the ordinary resolution, the consent of at least 51% of the members is required for the resolution to be passed. On the other hand, the special resolution requires the consent of at least 75% of the members in favor of the resolution.
  3. The copy of an ordinary resolution, signed by the company agent, should only be presented to the registrar in some cases. Conversely, a printed or handwritten copy of a special resolution, containing the signature of the company executive, must be filed with the Company Register (ROC) within 30 days.
  4. The ordinary resolution was approved to negotiate ordinary business. However, a special business can be managed through a special resolution or an ordinary resolution, in accordance with the requirements of the company law.

Conclusion

In a company, meetings are held to arrive at decisions, voting on formal proposals presented to the assembly. The resolutions are nothing but the expression of the company's will. The ordinary resolution sufficient for the transaction, apart from the ordinary activities are Change of company name, under the direction of ROC, when the previously incorrect or incorrect registered name or Correction of the company name as indicated by the central government, the remuneration of the accounting officer.

Issues requiring special resolution are the issue of equity shares, the alteration of the provisions of the articles of incorporation, the modification of the articles of association, the repurchase of shares or securities, the change in the objects of the prospectus, the transfer of the registered office of the society and so on.

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