Matters requiring Special Resolution Under Companies Act, 2013

What is a special resolution?

As per section 114(2), a resolution is considered as a special resolution when three conditions are satisfied.

The three conditions are:

(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; and

(c) the votes cast in favour of the resolution, whether on a show of hands, or electronically or on a poll, as the
case may be, by members who, being entitled so to do, vote in person or by proxy or by postal ballot, are required to be not less than three times the number of the votes, if any, cast against the resolution by members so entitled and voting.

Matters requiring the sanction of shareholders by special resolution.

1) Section 5(4) Articles: Inclusion of provisions for entrenchment in the articles of association in case of public company.

2) Section 12(5) Registered office of company: Change of registered office of the company outside the local limits of any city, town or village.

3) Section 13(1)&(8) Alteration of memorandum:

(a) To alter the provisions of memorandum.

(b) To change the objects for which the money was raised through the public and such money is still unutilized.

4) Section 14 Alteration of articles: To alter the articles for conversion of public company into private company or private company into public company.

5) Section 27 Variation in terms of contract or objects in prospectus: Variation in the terms of a contract referred to in the prospectus or objects for which the prospectus was issued.

6) Section 41 Global Depository Receipts: To issue depository receipts in any foreign country.

7) Section 48(1) Variation of shareholders rights: To vary the rights attached to the shares where a share capital of the company is divided into different classes of shares

8) Section 54 Issuance of sweat equity shares: Issuance of sweat equity shares of a class of shares already issued.

9) Section 62(1)(b),62(1)(c) and proviso to 62(3) Further issue of share capital:

- Further issuance of shares to employees under employees stock option.

- Issue of further shares to any person whether or not those persons include the existing members or employees for cash or for a consideration other than cash, if price of such shares is determined by the valuation report of a registered valuer.

- For approving the terms of issue of debentures or loan containing an option to convert such debentures or loan into shares.

10) Section 66 Reduction of share capital: A company may alter its memorandum by reducing the amount of its share capital subject to confirmation by the tribunal on an application made by the company.

11) Section 67(3)(b) Restrictions on Purchase by Company or Giving of Loans by it for Purchase of its Shares: Approving any scheme for the purchase of, or subscription for, fully paid up shares in the company or its holding company, if the purchase of, or the subscription for, the shares held by trustees for the benefit of the employees or such shares held by the employee of the company.

12) Section 68(2)(b) Power of company to purchase its own securities: Authorising company to buy back its own shares.

13) Section 71(1) Debentures: To issue debentures with an option to convert such debentures into shares, either wholly or partly at the time of redemption.

14) Section 94(1) Proviso Place of keeping and inspection of registers, returns, etc.: Keeping of registers, returns etc., at any other place in India in which more than one-tenth of the total number of members entered in the register of members reside.

15) Section 140(1) Removal, resignation of auditors and giving of special notice: Removal of the auditor from his office before the expiry of his term after obtaining the previous approval of the Central Government (Regional Director).

16) Section 149 (1) Proviso and (10) Company to have Board of directors:

- For Appointing more than fifteen directors in a company
- For reappointing an independent director after the expiry of a term for five years.

17) Section 165(2) Number of directorships: Specifying lesser number of companies in which a director of the company may act as directors.

18) Section 180(1) Restrictions on power of boards: Powers which board may exercise only with the consent of shareholders.

19) Section 185(2)(a) Loan to directors: Company can advance any loan or give any guarantee or
provide any security.

20) Section 186(3) Loans and investment by company: Where the aggregate of the loans and investment so far made, the amount for which guarantee or security so far provided to or in all other bodies corporate along with the investment, load. Guarantee or security proposed to be made or given by the Board, exceed the limits specified under sub-section(2).

21) Section 196(3)(a) Proviso Appointment of managing director, whole-time director or manager: Appointing a person as a managing director, whole-time director or manager who has attained the age of seventy years.

22) Section 197(1) Second proviso Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits: the remuneration payable to any one managing director; or whole-time director or manager shall not exceed five percent. of the net profits of the company and if there is more than one such director remuneration shall not exceed ten percent. of the net profits to all such directors and manager taken together;

(ii) the remuneration payable to directors who are neither managing directors nor whole-time directors shall not exceed,—

(A) one per cent. of the net profits of the company, if there is a managing or whole-time director or
manager;

(B) three per cent. of the net profits in any other case.

23) Section 197(4) Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits: To determine the remuneration payable to the directors of a company, including any managing or whole-time director or manager.

24) Section 197(10) Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits: To waive the recovery of sum refundable under sub-section 9 which states that if a director draws remuneration in excess of the limit prescribed, he shall refund such sums to the company, within two years and until such sum is refunded, hold it in trust for the company.

25) Section 210(1)(b) Investigation into affairs of company: On intimation that the affairs of the company ought to be investigated.

26) Section 210(1)(b) Investigation into affairs of company by serious Fraud investigation office: On intimation that the affairs of the company are required to be investigated by the Serious Fraud Investigation Office.

27) Section 248(2) Power of registrar to remove name of company from register of companies: Company may after extinguishing all its liabilities file an application to the registrar to remove the name of company from register of companies.

28) Section 271(1)(a) Circumstances in which a company may be wound up by tribunal: Company may file a petition for winding up the company by tribunal.

29) Section 371(3)(a) Effect of registration under this Act: To adopt Table F in Schedule, if required. Time Frame: - eForm MGT 14 needs to be filed with the ROC within 30 days from the date of passing of resolution

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