Section 114 of CA 2013 : Section 114: Ordinary And Special Resolutions

Explanation using Example

Imagine a hypothetical company, "GreenTech Innovations Ltd.," which is planning to alter its Articles of Association to incorporate a new business strategy. This change requires shareholder approval. The company sends out notices for a general meeting with a clear indication that an ordinary resolution is needed to pass this alteration.

At the meeting, the chairman explains the proposed change and calls for a vote. Out of 100 members present, 60 vote in favor, and 40 vote against. Since the votes in favor exceed the votes against, the resolution is duly passed as an ordinary resolution.

In another scenario, GreenTech Innovations Ltd. decides to sell a major part of its business, which requires a higher level of agreement from its shareholders. The notice for the general meeting specifies that a special resolution is necessary for this action.

During the meeting, 80 members vote in favor of the sale, and 20 vote against it. The votes in favor are four times the votes against, satisfying the requirement for a special resolution (i.e., the affirmative votes must be at least three times the negative votes). Consequently, the special resolution is passed, and the company can proceed with the sale.