Board Resolutions

Different Types of Board Resolution

Different Types of Board Resolution

Board resolutions are passed by the members of the company i.e. the individuals who include their names on the register of members of the company. In this article, we review the different types of board resolutions and its uses.

Board Resolution

Board resolutions are akin to a poll which is held by a company in its board meetings and annual general meeting for passing orders. The members of the company may cast their votes in the form of yes or no. In a medium sized company it typically happens by show of hands for “Yes” and “No” in a judgment to be taken by the company.

Ordinary Resolution

A resolution will be an ordinary resolution if the notice required under the Companies Act has been duly given and it is necessary to be passed by the votes cast, whether on a show of hands, or electronically or on a poll.

When a motion is passed by a simple majority of the members related the company who are permitted to voting at the General meeting, it is said to have been passed by an ordinary resolution.
The votes cast in favor inclusive of the chairman if any are more than the votes cast in opposition to the resolution.

Matters passed as an ordinary resolution:

  • Alteration in authorized capital
  • Declaration of dividend
  • Appointment of auditors
  • Fixation of remuneration
  • Election of directors

Special resolution

  • A resolution shall be a special resolution in the following conditions:
    The intention to recommend the resolution as a special resolution has been accordingly specified in the notice naming the general meeting or other intimation given to the members of the resolution;
  • Notice necessary under the Companies Act has been given; and
  • the votes cast in favor of the resolution, whether on a display of hands, or by electronic means or on a poll, as the case perhaps, by members who, being entitled so to do, vote in person or by proxy or by postal ballot, are necessary to be not less than three times the number of the votes, if any, cast in opposition to the resolution by members so entitled and voting.
  1. According to legislation and Section 114 (2) of Companies Act, 2013 a special resolution is held subsequent to the following conditions:
    The meaning of the proposal must be notified to the members of the company in the form of Notice.
  2. Notice should comply with the requirement of 21 clear days earlier than the annual general meeting.
  3. Votes cast in favor by poll or show of hands must by three times the votes cast against the resolution.
  4. If there are any abstentions, they are not to be taken into account.

A number of matters applicable to Special Resolution:

Board Resolution

Every company will hold its first board meeting within a period of 30 days from its date of incorporation and subsequently 4 board meetings of its board of directors every year in such a manner that not more than 120 days will intervene between two following meetings of the board.
Participation of directors can be In-person, by video conferencing or any other audio visual modes which are capable of recording and recognizing the participation related to the directors.
Notice for the meeting should be served in not less than 7 days. The notice should be in writing to every director at his address registered with the company and can be sent by means of hand delivery or post or by any electronic modes.

Post by IndiaFilings

IndiaFilings.com is committed to helping entrepreneurs and small business owners start, manage and grow their business with peace of mind at an affordable price. Our aim is to educate the entrepreneur on the legal and regulatory requirements and be a partner throughout the entire business life cycle, offering support to the company at every stage to make sure they are compliant and continually growing.