Section 114 of the Companies Act, 2013 defines both.
Ordinary resolution (Section 114(1)):
- The notice required under the Act must have been duly given.
- Passed if the votes cast in favour (by show of hands, electronically or on a poll, including casting vote of the chairman if any) exceed the votes cast against.
- Simple majority of votes actually cast.
Special resolution (Section 114(2)):
- The intention to propose it as a special resolution must be specifically mentioned in the notice calling the general meeting or in any other intimation given to members (for example, a postal ballot notice).
- The notice must be duly given.
- Votes cast in favour must be at least three times the votes cast against.
Common examples:
- Ordinary resolution: adopting financial statements, declaring dividend, appointing directors in place of those retiring, appointing auditors.
- Special resolution: altering articles of association (Section 14), changing the registered office from one state to another, alteration of objects clause, reduction of share capital (Section 66), buy-back of more than 10% of paid-up equity capital and free reserves (Section 68), a resolution that the company be wound up by the Tribunal (Section 271(a)). Voluntary winding up is no longer under the Companies Act: voluntary liquidation is now governed by Section 59 of the Insolvency and Bankruptcy Code, 2016, and generally also needs a special resolution.
Filing: special resolutions must be filed with the Registrar in Form MGT-14 within 30 days (Section 117).
Exam tip: in problem questions, first identify which resolution the law requires for the act in the question, then check the voting numbers given. For example, 70 votes for and 25 against fails as a special resolution, because 70 is less than three times 25 (75). Those votes would be enough for an ordinary resolution, because 70 is more than 25, but that does not help where the law requires a special resolution.
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