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Microlesson · 5-min read

Special Resolution vs Ordinary Resolution (Section 114)

# Special Resolution vs Ordinary Resolution

## 1. What is a Resolution?

A resolution is the formal decision of an organisation at a meeting. A motion, once approved by the required majority, becomes a resolution that binds the organisation.

## 2. Motion vs Resolution

AspectMotionResolution
MeaningProposal placed for considerationAdopted motion
StagePre-votePost-vote
EffectTriggers discussionBinding decision

Not every motion becomes a resolution (e.g., adjournment motion).

## 3. Types of Resolutions under Sec 114

### A. Ordinary Resolution — Sec 114(1)

  • Passed by simple majority (votes for > votes against), whether by show of hands, e-voting, or poll.
  • Default unless the Act/AoA requires otherwise.

### B. Special Resolution — Sec 114(2)

Three cumulative conditions:

1. Notice must clearly state intention to propose as a special resolution.

2. Notice given in the manner required under the Act.

3. Votes cast in favour ≥ 3 × votes cast against (effectively ≥ 75% of votes cast).

## 4. Voting Ratio — Visualised

ResolutionVotes ForVotes AgainstPasses?
Ordinary> 50% of cast< 50%
Special≥ 75% of cast (3:1)≤ 25%

## 5. When is Each Used?

  • Ordinary — adoption of accounts, dividend, auditor appointment, retiring directors.
  • Special — MOA/AOA alteration, registered office change, capital reduction, buy-back, voluntary winding-up.

## Quick Recall Box

  • Ordinary = Simple majority (For > Against).
  • Special = For ≥ 3 × Against.
  • Special requires explicit intention in notice.

Worked example

### Example 1

Example 1 — Voting count: Votes — 410 for, 190 against (proposed as special). Answer: Special requires For ≥ 3 × Against → 410 < 570. Special NOT passed (would pass as ordinary).

### Example 2

Example 2 — Notice defect: Notice merely says 'resolution to alter AoA' without flagging it as a special resolution. Answer: Notice is defective; special resolution cannot be validly passed.

### Example 3

Example 3 — Dividend: 550 for, 450 against on dividend declaration. Answer: Dividend is ordinary; simple majority suffices → passed.

⚠️ Common exam mistakes

  • Saying 75% of TOTAL members instead of 75% of votes CAST.
  • Stating the special-resolution ratio as 3:2 or 2:1.
  • Forgetting that the notice must expressly say 'special resolution'.
  • Confusing motion with resolution.
  • Quoting Sec 114(3) instead of 114(2).
Bare-Act text Section 114 · Companies Act, 2013 · click to expand
Section 114: (1) A resolution shall be an ordinary resolution if the notice required under this Act has been duly given and it is required to be passed by the votes cast... in favour of the resolution... exceed the votes, if any, cast against the resolution by members. (2) A resolution shall be a special resolution when — (a) the intention to propose the resolution as a special resolution has been duly specified in the notice... (b) the notice required under this Act has been duly given; and (c) the votes cast in favour of the resolution... are required to be not less than three times the number of the votes, if any, cast against the resolution.
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