Please Wait ..

Sign-in to your account


Username:
Password:

Remember Me

Forgot your password?

Sign-up now



Join CAclubindia.com and Share your Knowledge. Registered members get a chance to interact at Forum, Ask Query, Comment etc.


Discussion > Corporate Law > Meetings >

Special Business vis-a-vis Ordinary Business

    Post New Topic
Pages : 1 2





Adviser


[ Scorecard : 156]
Posted On 14 March 2009 at 14:42 Report Abuse

What is the distinction between

a) Special Business and Ordinary Business

b) Special Resolution and Ordinary Resolution.

Are there any specific sections of Indian Companies Act, 1956 where these have been defined ?

 


Online classes for CA CS CMA



Ankur Garg
Company Secretary and Compliance Officer


[ Scorecard : 104093]
Posted On 17 March 2009 at 18:16

Dear Ashok,

Kindly appreciate- the funda of Special or Ordinary business is that to judge whether a business is speacial or ordinary you must look in to the relevant section i.e. whether it is required to be passed by Special or ordinary resol. 

Whether a business is special or ordinary is not dependant on passing majority. To elaborate further only 4 business as mentioned in section 173 (1)(a) are ordinary business and rest all the businesses u/s 173(1)(b) are special businesses whether they are reqired to be passed by Special or ordinary resolution.

For example Alteration of Article is required to be passed by Special Resolution u/s 31 but it is an ordinary business.

Similarily appointment of auditor u/s 224 or approval of balance sheet in AGM u/s 209 by shareholders is to be done by ordinary resolution but still they are special business read with section 173.

Distinction between SR and OR:

The definition of SR & OR is given u/s 189.

Ordinary Resolution is required to be passed by simple majority. For example out 100 persons voting at least 51 persons should vote in favour of the resolution. Remember 100 persons above does not include the persons who are not voting or disqualified or remain motual.

Special Resolution is passed when the vote cast in favour of the resolution is three times higher then the votes cast against the resolution.

Further a resolution is required to be registered with ROC via Form-23 only if it is required by  Section 192 and not otherwise. All the Best. For any query please revert.

Regards-Ankur garg       ankur_gargcs @ rediffmail.com



Total thanks : 2 times




Amruta
-


[ Scorecard : 60]
Posted On 03 July 2009 at 15:34

@ ankur garg

only 4 business as mentioned in section 173 (1)(a) are ordinary business and rest all the businesses u/s 173(1)(b) are special businesses whether they are reqired to be passed by Special or ordinary resolution.

For example Alteration of Article is required to be passed by Special Resolution u/s 31 but it is an ordinary business.

Similarily appointment of auditor u/s 224 or approval of balance sheet in AGM u/s 209 by shareholders is to be done by ordinary resolution but still they are special business read with section 173.

After reading 173, i found tht apt of auditors is ordinary business n not special and also why do u say that alteration of articles is an ordinary business? 173(1)(a) does not include alteration of articles as an ordinary business in the 4 provided. Please clarify as i am a bit confused.

thanx

Amruta




Ankur Garg
Company Secretary and Compliance Officer


[ Scorecard : 104093]
Posted On 03 July 2009 at 15:57

Hello Amruta,

Yes you are absolutely right in pointing out error in my reply. There is a drafting error in the answer which i clarify through Personal Message (PM) at that time only but i left my answer unrectified.

 

Correct answer with correct example would be as follows:

 

For example Appointment of Auditor u/s 224A is an ordinary business but it is required to be passed by Special Resolution.

Similarily Alteration of share capital u/s 94 is a special business as it is not covered in Section 173 ordinary business list but it is required to be passed by ordinary resolution.

In case of any doubt please revert.

 

Best Regards

 

 

 

 




Vaibhav Shukla
Company Secretary


[ Scorecard : 137]
Posted On 03 July 2009 at 16:01

Dear Ashok,

As per Section 173 (1) (a) there are 4 ordinary business. In an AGM only these four businesses are ordinary business  rest all are special businesses. in case of any other general meeting all business are special business

thus only these 4 are ordinary business . Rest all are sp. businesses

4 ordinary busineses are:

(i) the consideration of the accounts, balance sheet and the reports of the Board of directors and auditors,
(ii) the declaration of a dividend,
(iii) the appointment of directors in the place of those retiring, and
(iv) the appointment of, and the fixing of the remuneration of, the auditors
 

Pursuant to Section 189-ORDINARY AND SPECIAL RESOLUTIONS.

(1) A resolution shall be an ordinary resolution when at a general meeting of which the notice
required under this Act has been duly given, the votes cast (whether on a show of hands, or on a
poll, as the case may be), in favour of the resolution (including the casting vote, if any, of the
chairman) by members who, being entitled so to do, vote in person, or where proxies are allowed,
by proxy, exceed the votes, if any, cast against the resolution by members so entitled and voting.
 
(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 calling the general meeting or other intimation given to the members of the resolution;
(b) the notice required under this Act has been duly given of the general meeting; and
(c) the votes cast in favour of the resolution (whether on a show of hands, or on a poll, as the
case may be) by members who, being entitled so to do, vote in person, or where proxies are
allowed, by proxy, are not less than three times the number of the votes, if any, cast against the
resolution by members so entitled and voting.
 
Regards,
Vaibhav
 

 



Total thanks : 2 times



Amruta
-


[ Scorecard : 60]
Posted On 06 July 2009 at 20:48

@ anurag,

Thanx a lot!




meenu
cs


[ Scorecard : 416]
Posted On 07 July 2009 at 11:57

Thanks for Clarifing the Concept.

Best Regards,

Meenu jha.

 




Kumar Ankit
Service


[ Scorecard : 53]
Posted On 08 October 2009 at 15:26

What kind of resolution needs to be passed for fixing the remuneration of statutory auditor, appointed in accordance with Section 619?

The nature of business will be that of a ordinary business, but I am not sure about the kind of resolution. And do we need to add Explanatory Note in such scenario.

Will the minutes of the such a resolution, will have to be filed to Registrar/ MCA.

Please mention Section No. in support of your answer.

Thanks.

 




Ankur Garg
Company Secretary and Compliance Officer


[ Scorecard : 104093]
Posted On 08 October 2009 at 15:35

Hi,

 

As per section 224(8)(a) In your given situation Auditors’ remuneration may be fixed by the board of director or Central Govt.

 

Board may approve the remuneration by passing a board resolution with simple majority. No need to add any explanatory statement.

 

Explanatory statement is required to be attached u/s 173 only with special businesses which is to be passed by shareholders in the general meeting.

 

No need to submit minutes with ROC.

 

Regards

 



Total thanks : 1 times



Kumar Ankit
Service


[ Scorecard : 53]
Posted On 08 October 2009 at 22:28

Dear Sir,

Your information was really helpful. However, if you could just tell me the relevant section which says that in such fixation of remuneration of a Government Company, need not be done via special resolution, it would be really greatful.

I just went through HPCL AGM notice, which has a explanatory statement attached for fixation of remunerations of CAG appointed auditors. The link is http://www.hindustanpetroleum.com/Upload/En/UPdf/HPCL_Notice_of_57th_AGM.pdf

What was the requirement which made HPCL do it?

And if a simple resolution is passed as a special resolution, then what is the effect. Is it rendered ineffective, and do we need to submit it to the ROC.

Thanks.



Total thanks : 1 times


There are 18 Replies to this message





Related Files








Related Threads


Post your reply for Special Business vis-a-vis Ordinary Business



Your are not logged in . Please login to post replies

Click here to login


Not a member yet ?? Click here to signup

Message







    

  • Use thank button to convey your appreciation.
  • Maintain professionalism while posting and replying to topics.
  • Try to add value with your each post.




Forum Home | Forum Portal | Member Control Center | Who is Where | Popular Threads | Today's Topic | Recent Posts | Today's Posts | Post New Topic | Thread With Files | Top Threads This Month | Forum Stats | Unreplied Threads

back to the top