CA Intermediate · Corporate and Other Laws · Management & Administration
Orchid Foods Ltd, a listed company, passes a resolution at a general meeting. 62 lakh votes are cast in favour and 38 lakh votes against on a matter requiring a special resolution under the Companies Act, 2013. Abstentions are ignored. What is the legal position?
The special resolution fails because votes in favour must be at least three times the votes against. Here 38 lakh against requires at least 114 lakh in favour, but only 62 lakh were cast in favour, so the required 75% is not reached.
- AThe special resolution is passed because a simple majority of votes was obtained
- BThe special resolution is passed because votes in favour exceed the required one-half
- CThe special resolution fails because votes in favour are not at least three times the votes againstCorrect
- DThe special resolution fails because it needs the unanimous consent of all members present
Explanation
A special resolution requires votes cast in favour to be at least three times the votes cast against. Here 62 lakh is less than 3 x 38 = 114 lakh. In percentage terms, 62% falls short of the 75% needed. The simple majority option confuses it with an ordinary resolution, which would pass.
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