Extra-Ordinary Resolution
Extra-Ordinary Resolution is a resolution for consideration by the members of a company at a general meeting of the members. The resolution which is passed in a meeting at the consent of three-fourths of the participating members with a view to serving emergency purposes is called extra-ordinary resolution. It is a vote on a resolution presented to a corporate body which has obtained the assent of a number of the members present greater than a majority. It means a resolution passed at a meeting duly convened and held in accordance with this Schedule by a majority of not less than three-quarters of the votes cast.
Extra-Ordinary Resolution is a vote on a resolution presented to a corporate body which has obtained the assent of a number of the members present greater than a majority.
In business or commercial law, an extraordinary resolution or special resolution is a resolution passed by the shareholders of a company by a greater majority than is required to pass an ordinary resolution. In corporate law, also called a special resolution, is a resolution passed by the shareholders of a company by a larger majority than is required to pass an ordinary resolution. The members must be communicated through notice before 14 days of holding a meeting to adopt such resolution and the extraordinary resolution must be explicitly mentioned in the notice. The requirement of an extraordinary resolution has the potential to hinder the responsiveness of a corporate entity and so it is “extraordinary” that it would be required.
A copy of the extraordinary resolution must be submitted to the registrar of the company within 15 days of adopting such resolution in the meeting. These resolutions are generally only required in certain specific situations required by statute. For example, in the United Kingdom, to liquidate a company voluntarily on the ground that it cannot by reason of its insolvency continues its business requires an extraordinary resolution. It may be required in situations like declaring the company insolvent or taking other major action. Laws vary by jurisdiction, so local law should be consulted.
Extra-ordinary resolution is necessitated to be passed for the following causes:
- Winding up of company at will,
- Dismissal of any director,
- Dismissal of management agent etc.
