ACCA Applied Skills · Corporate and Business Law (Global) · Share capital
Ravi Ltd has authorised share capital of $500,000 and issued capital of $300,000. Under the general company law approach, the members wish to increase the authorised capital to $800,000. Which resolution is normally required?
An ordinary resolution of the members is normally required, unless the articles demand more. Increasing authorised capital is a matter for members, passed by a simple majority of votes cast, and needs neither a court order nor board approval alone.
- AAn ordinary resolution of the members, unless the articles require otherwiseCorrect
- BA special resolution of the members in every case
- CA board resolution only, with no member approval
- DA court order obtained by the directors
Explanation
Increasing authorised (nominal) share capital is generally a member decision passed by ordinary resolution, a simple majority of over 50%, unless the articles require a higher majority. A special resolution is not needed in every case, and neither is a court order.
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