KEY FACTS OF EXTRA ORDINARY RESOLUTION

It is a vote on a resolution presented to a corporate body that has obtained the assent of a number of the members present greater than a majority. The members must be communicated through notice before 14 days of holding a meeting to adopt such a resolution and the extraordinary resolution must be explicitly mentioned in the notice. This is passed mainly in winding-up cases. In practice 21 days prior notice needs to be provided for holding an Extra-Ordinary General Meeting.

Following Decisions Can Be Passed Via an Extra-ordinary Resolutions

1. On voluntary winding up because of excess liability [Sec. 286(c)]

2. To sanction certain acts of liquidator in case of voluntary winding up [Sec. 308(1) (a)]

3. To sanction all arrangements between the company and creditors [Sec. 311(1)]

4. To dispose off documents on voluntary winding up [Sec. 339(1)(b)]

5. Removal of director from office [Sec. 106(1)]

Voting power of Extra-Ordinary Resolution

 It is to be passed by a majority of not less than three-fourth (i.e., 75%) of the members present and vote in person or by proxy. Therefore, a shareholding ratio of 75% or higher means that a shareholder has the authority to make the above decision.

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