Shareholder holding more than 51%

This query is : Resolved

suraj (Querist)
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17 September 2013 If in a company 7 shareholders and if a person being shareholder have around 80% share in a private company. Then in this case can he pass any resolution in General Meeting.

Or

number of persons count for the same or number of shareholding count.

Ajay Mishra

Ajay Mishra (Expert)
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17 September 2013 Hi

The manner of decision making by members in the general meeting of a company is to pass a formal special or ordinary resolution considering the requirements of the Companies Act, 1956, the Memorandum of Association and Articles of Association of the company.

Section 189(1) of the Act, provides that most of the matters, which require the approval of the members, may be approved by them by an ordinary resolution. A resolution is deemed to have been passed as an ordinary resolution if it is approved by the members at the general meeting by a majority. In other words, the votes cast in favour of the resolution should be more than the votes cast against, if any.

Section 189(2) of the Act, provides that certain matters are deemed to have been passed at a general meeting as a special resolution only, if the votes cast in favour are at least three times the number of votes cast against the resolution, if any.
A special resolution passed at a meeting attended only by the shareholders who were in arrears in respect of calls, has no legal effect
The resolution shall be a special resolution if it fulfills the following conditions:—
(a) The intention to move the resolution as 'special resolution' is specified in the notice for the meetings.
(b) The text of the special resolution alongwith explanatory statement shall be given in the notice.
(c) The required notice for convening the meeting has been given as provided under the Act.
(d) The votes cast in favour of the resolution are at least three times the votes cast against, if any.

So it is decide on the basis of vote caost not on the basis of % of holding.