Skip to content

IAI Actuarial Core Principles · Business Management · Separate legal personality, directors' duties, shareholders and partnerships

Nandini holds 8% of the voting shares of Veda Foods Ltd. The company's articles are silent on the matter. The board proposes a resolution at an extraordinary general meeting that Nandini believes is oppressive. She learns that the resolution will be passed as an ordinary resolution with votes of 55% of those present and voting. Which statement about her position is most accurate?

A simple majority of votes cast passes an ordinary resolution, so 55% is enough and Nandini cannot block it by voting alone. The 75% requirement applies to special resolutions. If the resolution is oppressive, she may still seek tribunal relief.

  1. AAn ordinary resolution needs more than 50% of votes cast, so 55% is sufficient and she cannot block it by voting alone, though she may seek a remedy if it is oppressive or unfairCorrect
  2. BA resolution needs unanimous approval, so her 8% gives her a veto
  3. CA resolution passed by 55% is automatically void because it lacks 75%
  4. DShe may veto any resolution because she holds more than 5%
  5. Her shares are automatically converted to non-voting if she opposes the board

Explanation

An ordinary resolution requires a simple majority of votes cast, so 55% suffices; the 75% threshold applies to special resolutions. A minority holding does not give a veto on ordinary resolutions. However, if the majority's action is oppressive or prejudicial, she can seek relief from the NCLT.

Did you get it right without looking?

One question tells you little. A timed set on Separate legal personality, directors' duties, shareholders and partnerships shows your real accuracy, how long you take and where you lose marks.

Practise Separate legal personality, directors' duties, shareholders and partnershipsFree diagnostic mock

More Separate legal personality, directors' duties, shareholders and partnerships questions