TRANSACTIONS REQUIRED SPECIAL RESOLUTION UNDER COMPANIES ACT

[Mr. M. GOVINDARAJAN]

Section 114(2) of the Companies Act, 2013 provides that a resolution shall be a special resolution when-

• The intention to propose the resolution as a special resolution has been duly specified in the notice calling for the general meeting or other intimation given to the members of the resolution;
• The notice required under this Act has been duly given; and
• The votes cast in favor of the resolution, whether on a show of hands, or electronically or on a poll, as the case may be, by members who, being entitled so to do, vote in person or by proxy or by postal ballot, are required to be not less than three times the number of the votes, if any, cast against the resolution by members entitled and voting.

The following transactions require the passing of special resolution under the Companies Act, 2013:

• Sec. 5(4) : To make entrenchment provisions in the articles of association of a public company;
• Section 12(5)         : To shift the registered office outside the local limits of any city, town or village where such office is situated;
• Section 13 (1) : To alter the provisions contained in the Memorandum of the company;
• Section 13 (8)  : To change the objects for which the money has been raised from public through prospectus and still has any unutilized amount out of the money realized;
• Section 14 (1)  : To alter the articles having the effect of conversion of
  • A private company into a public company; or
  • A public company into a private company.
• Section 27(1)   : To vary the terms of contract referred to in the prospectus or objects for which the prospectus was issued;
• Section 41 :To issue depository receipts in any foreign country;
• Section 48(1)   : To vary the rights attached to the shares of any class;
• Section 54 : To issue seat equity shares of a class of shares already issued;
• Section 62(1)(b): To increase subscribed capital by the issue of further shares to employees under a scheme of employees’ stock option;
• Section 62(1)(c): To increase subscribed capital by the issue of further shares to any person whether or not those persons include the existing members or employees for cash or for a consideration other than cash, if the price of such shares as determined by the valuation report of a register valuer;
• Section 62(3) proviso: To approve terms of issue of debentures or loan containing an option to convert such debentures or loans into shares;
• Section 66 – To reduce the share capital subject to the confirmation of the Tribunal;
• Section 67(3)(b) – To approve any scheme for the purchase of, or subscription for, fully paid up shares in the company or its holding company, if the purchase of, or the subscription for, the shares held by trustees for the benefit of the employees or such shares held by the employee of the company;
• Section 68(2) – To authorize the company to purchase its own securities;
• Section 71 – To issue debentures with an option to convert whole or part of the debentures into shares at the time of redemption;
• Section 94 – To keep and maintain the registers and the copies of annual return filed, at any other place than the registered office, where more than one tenth of the total number of members reside;
• Section 140 – To remove the auditor before the expiry of his term after obtaining the previous approval of the Central Government;
• Section 149 (1) Proviso – To approve more than fifteen directors by a company;
• Section 149(10) – To re-appoint an independent director after expiry of a term of five consecutive years;
• Section 165 (2) – To specify any least number of companies in which director of the company may act as director. No person shall hold office as a director, including any alternate directorship, in more than 20 companies at the same time.   Further the maximum number of public companies in which a person can be appointed as a director shall not exceed ten;
• Section 180 – To exercise some of the powers as provided under Section 180, by the Board of Directors only with the consent of the company;
• Section 185 – To approve a scheme pursuant to which any may be given to a managing or whole time director;
• Section 186 – To approve giving of loan any loan or guarantee or providing any security or the acquisition exceeding limits of 60% of its paid up share capital, free reserves and securities premium account or 100% of its free reserves and securities premium account, whichever is more;
• Section 188 – To approve entering into contract or arrangement with a related party, in the case of a company having a paid up share capital of not less than such amount, or transactions not exceeding such sums, as may be prescribed;
• Section 196 – To appoint the person as a Managing Director, whole-time director or Manager who has attained the age of 70 years;
• Section 197 (4) – To determine the remuneration payable to the directors of a company, including any Managing or Whole time Director or Manager, if Articles of the company, so requires;
• Section 210 – To resolve that the affairs of the company ought to be investigated;
• Section 212 – To resolve that the affairs of the company are required to be investigated by the Serious Fraud Investigation Office;
• Section 248 – To file an application before the Registrar to remove the name of the company from the Register of Companies;
• Section 262 – To approve the Scheme of amalgamation of the sick company with any other company by the shareholders of both companies;
• Section 271 – To resolve that the company be wound up by the Tribunal;
• Section 304 – To resolve that the company be wound up voluntarily;
• Section 319 (1) – To confer general authority or an authority in respect of any particular arrangement on the liquidator to-
  • Receive, by way of compensation wholly or in part for the transfer or sale of shares, policies, or other like interest in the transferee company, for distribution among the members of the transferor company; or
  • Enter into any other arrangement whereby the members of the transferor company may, in lieu of receiving cash, shares, policies or other like interest or in addition thereto, participate in the profits of, or receive any other benefit from, the transferee company;
• Section 321 – To sanction any arrangement other than the arrangement referred to in Section 319 entered into between the company which is about to be, or is in the course of being wound up and its creditors;
• Section 343 – To sanction exercise of certain powers to Company Liquidator;
• Section 347 – To direct the manner of disposing of company’s books and papers when the affairs of a company have been completely wound up and it is about to be dissolved;
• Section 371 – To adopt Table F in Schedule I, if required.