What we do
Our work in this practice group is structured around the records, deadlines, and decisions involved:
- Drafted ordinary and special resolutions.
- Clear documentation of shareholder and member approvals.
- Assistance in determining the appropriate resolution type.
- Support for AGM, EGM, and other member approval processes.
- Proper documentation of significant corporate decisions.
- Alignment with applicable Companies Act and corporate governance requirements.
- Reduced risk of incomplete or ambiguous shareholder authorization.
How the engagement works
Shareholders resolutions are governed primarily by the Companies Act, 2013, applicable rules, the company’s Memorandum and Articles of Association, and applicable Secretarial Standards. Section 114 of the Companies Act distinguishes between ordinary and special resolutions. Various provisions of the Act require shareholder approval for specific matters, while certain transactions may require special resolutions, enhanced disclosures, or additional statutory filings. The exact approval requirement depends on the nature of the matter and the company’s circumstances.
Scenario 1: A company needs shareholder approval for a matter requiring an ordinary resolution at an AGM or EGM.
Scenario 2: The company proposes a transaction requiring a special resolution under the Companies Act.
Scenario 3: Shareholders need to approve alteration of the Memorandum or Articles of Association.
Scenario 4: A company requires member approval for specified related-party transactions, borrowing, capital restructuring, or other matters where shareholder approval is prescribed.
Scenario 5: A company needs professional assistance preparing resolutions and explanatory statements for an upcoming AGM or EGM.
Transaction & Approval Review
We understand the proposed corporate action and determine whether shareholder approval is required and whether the matter calls for an ordinary resolution, special resolution, or another approval mechanism.
Companies Act & Articles Review
We review the applicable Companies Act provisions, Articles of Association, existing corporate approvals, and relevant transaction documents to determine the appropriate shareholder authorization.
Resolution Drafting
We prepare the appropriate ordinary or special resolution with clear approval language, transaction details, authorization, and implementation provisions.
General questions
01What is a shareholders resolution?
A shareholders resolution is a formal decision approved by the members of a company in accordance with the Companies Act, the company’s Articles of Association, and applicable meeting and voting requirements.
02What is an ordinary resolution?
An ordinary resolution is generally passed when the votes cast in favour exceed the votes cast against by members entitled to vote, subject to the applicable Companies Act provisions.
03What is a special resolution?
A special resolution generally requires the prescribed notice and voting threshold under the Companies Act, including that the votes cast in favour are not less than three times the votes cast against, subject to the applicable provisions.
04When is a special resolution required?
Special resolutions are required for various matters specified under the Companies Act, such as certain alterations to constitutional documents, specified corporate transactions, and other matters where the law expressly requires a special resolution.
05Can shareholders pass a resolution without holding a physical meeting?
Certain matters may be approved through postal ballot or other permitted mechanisms under the Companies Act, while other matters require consideration at a general meeting. The appropriate method depends on the specific matter and applicable legal requirements.
06What is an explanatory statement?
An explanatory statement provides shareholders with material information about specified business proposed at a general meeting, including relevant facts, interests of directors or key managerial personnel where applicable, and other information required by law.
07Does every shareholder resolution require MCA filing?
No. MCA filing requirements depend on the nature of the resolution and the specific provision under which it is passed. Certain resolutions or alterations must be filed with the Registrar within the prescribed period.
08Can you draft resolutions for AGM and EGM?
Yes. We can prepare ordinary and special resolutions, explanatory statements, notices, agendas, and related documentation for AGM, EGM, and other shareholder approval processes.
