RESOLUTION

The subjects matter presented in the meeting for discussion and decision is called resolution. It is a written proposal. The participants of meeting discuss on the relevance, pros and cons of particular resolution and accordingly decide on the approval, rejection or postponement of the resolution.

Objectives of resolution are briefly discussed below:

1. To state the facts about discussion in systematic and organized manner.

2. To serve as evidence for the validation of decisions.

3. To allow the management to make democratic decisions.

4. To act as documented evidence for future misunderstanding and disputes.

5. To enable the participants of the meeting to have beforehand knowledge about the matters to be discussed in the meeting.

Different types of resolution

  As per the Company Act 2063, resolutions have been broadly divided into two categories:

1. Ordinary Resolution

The resolution that is presented in the general meeting of a public company is called ordinary resolution. It is generally related to the usual and regular activities of a company. The general resolution can be approved if it is passed by simple majority i.e. more than 50% of the shareholders.

1. Special Resolution

The resolution that is presented in the special meeting of the shareholders is called special resolution. The impact and prominence of a special resolution are generally high and long term. Some instances are: issuance of bonus shares, winding up of company etc. However, it has to be approved by getting permission from two third of shareholders i.e. 75% of the shareholders..