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CA Foundation · Business Laws · The Companies Act, 2013

Sahyadri Infra Ltd, a public company, wants to pass a resolution to alter its articles of association. Which type of resolution is required?

A special resolution is required to alter the articles of association. It must be passed by members with votes in favour at least three times the votes cast against. A simple majority under an ordinary resolution, or a board resolution alone, is not sufficient for this change.

  1. AOrdinary resolution, passed by a simple majority of votes cast
  2. BSpecial resolution, passed by at least three times as many votes in favour as againstCorrect
  3. CResolution of the Board of Directors only, passed at a board meeting
  4. DOrdinary resolution, but only if passed unanimously

Explanation

Under the Companies Act, 2013, an alteration of the articles of association needs a special resolution. A special resolution requires the votes cast in favour to be at least three times the votes cast against. An ordinary resolution only needs more votes in favour than against, so it is not enough here.

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