What Is an Ordinary Resolution?
An Ordinary Resolution is a resolution passed at a general meeting (AGM or EGM) or at a Board Meeting where it is passed by a simple majority — meaning votes cast in favor exceed votes cast against. Under Section 114(1) of the Companies Act, 2013, a resolution is an ordinary resolution when the votes cast (whether on a show of hands, electronically, or on a poll) in favor of the resolution exceed the votes cast against the resolution. There is no minimum voting threshold — even a single vote margin is sufficient.
Ordinary resolutions are the default type of resolution under the Companies Act. Unless a specific provision requires a special resolution (75% majority), an ordinary resolution suffices. The Act specifies numerous matters requiring ordinary resolution — from appointing directors to declaring dividends to fixing auditor remuneration.
When Is Ordinary Resolution Required?
The Companies Act, 2013 requires ordinary resolution (at a general meeting) for the following matters:
Directors: (a) appointment of directors retiring by rotation — Section 152(6), (b) appointment of additional director as regular director — Section 161, (c) removal of director — Section 169 (with special notice), (d) fixing remuneration of directors — Section 197 (for certain categories), (e) ratification of appointment of auditors — Section 139(1) (prior to 2018 amendment).
Financial Matters: (f) adoption of financial statements — Section 134, (g) declaration of dividend — Section 123, (h) increase in authorized share capital — Section 61, (i) appointment and remuneration of statutory auditor — Section 139/142, (j) approval of related party transactions exceeding threshold — Section 188.
Other Matters: (k) approval of rights issue of shares — Section 62(1)(a), (l) appointment of branch auditor — Section 143(8), (m) authorization to Board for CSR spending — Section 135, (n) matters specified in AOA as requiring ordinary resolution.
Format of Ordinary Resolution
[Illustrative format — for use at a General Meeting]
Item No. [X] — [Subject]
To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:
"RESOLVED THAT pursuant to [Section Number] of the Companies Act, 2013 [and any other applicable provision / rule], [the operative text of the resolution — what is being approved, authorized, or decided]."
"RESOLVED FURTHER THAT the Board of Directors (including any Committee thereof) and/or the Company Secretary be and is/are hereby authorized to do all such acts, deeds, matters, and things as may be necessary, proper, or desirable to give effect to this resolution."
Ordinary Resolution at Board Meeting
At Board Meetings, resolutions are passed by simple majority of directors present and voting — this is sometimes called a "Board Resolution" rather than "Ordinary Resolution" (the latter term is technically reserved for general meetings). However, the voting principle is the same: votes in favor must exceed votes against. In case of a tie, the Chairman may exercise a casting vote if authorized by the AOA (Section 175(1)). The Companies Act does not provide a statutory casting vote for the Chairman — it must be specifically provided in the AOA.
Ordinary Resolution vs Special Resolution — Key Differences
| Feature | Ordinary Resolution | Special Resolution |
|---|---|---|
| Majority Required | Simple majority (>50%) | 75% of votes cast |
| Notice Requirement | 21 clear days (same as SR) | 21 clear days + specific notice that SR is being proposed |
| Section | Section 114(1) | Section 114(2) |
| Filing with ROC | Not required (except specified cases) | Always required — MGT-14 within 30 days |
| Typical Use | Director appointment, dividend, auditor | MOA/AOA alteration, name change, share issue |
| Explanatory Statement | Required for special business items | Required for all SR items |
Voting on Ordinary Resolution
Show of Hands: The default voting method — each member present has one vote regardless of shares held. Result declared by the Chairman based on visible majority.
Poll: Any member can demand a poll under Section 109 — on a poll, voting is proportional to shares held. A poll can be demanded by: (a) the Chairman, (b) members present holding at least 10% of voting power, (c) members holding shares with paid-up value of at least Rs. 5 lakh.
E-Voting: For companies with 1,000+ members or listed companies — e-voting facility must be provided under Section 108. Results are based on total votes cast (including e-votes + poll votes at the meeting).
Proxy Voting: Proxies can vote only on a poll — not on a show of hands (Section 105). This is why demanding a poll is important for proxy holders.
Filing Requirements for Ordinary Resolutions
Ordinary resolutions generally do NOT need to be filed with ROC — unlike special resolutions which must be filed via MGT-14. However, certain ordinary resolutions ARE filed under Section 117(3): (a) resolutions relating to grant of loans/investments under Section 186, (b) resolutions for approval of related party transactions under Section 188, (c) resolutions for director appointment where special notice was given, (d) resolutions agreed to by all members but which would not have been effective unless passed as special resolutions. For these: file MGT-14 within 30 days.
Drafting Best Practices
(a) Begin with "RESOLVED THAT pursuant to..." — cite the exact section of the Act under which the resolution is proposed. (b) Use clear, specific language — avoid ambiguity in the operative portion. (c) Include "RESOLVED FURTHER THAT" for authorization clauses — authorizing specific persons to implement the resolution. (d) For director appointments: include full name, DIN, designation, and terms. (e) For financial matters: specify amounts, dates, and conditions. (f) Each resolution should be self-contained — a reader should understand the complete decision from the resolution text alone.
Common Mistakes in Drafting Ordinary Resolutions
(a) Passing an ordinary resolution when a special resolution is required — the resolution is void. (b) Not citing the correct legal section — creates uncertainty about the resolution's validity. (c) Vague operative language ("the Board may do whatever is necessary") — does not provide clear authorization. (d) Not recording voting results — particularly for contentious resolutions where dissent exists. (e) Not filing MGT-14 when required for specified ordinary resolutions — non-compliance with Section 117. (f) Passing resolution without quorum — void under Section 103/174.
Disclaimer: This article is for informational purposes only and does not constitute legal or professional advice. While every effort has been made to ensure accuracy based on the latest laws and amendments, readers should consult a qualified professional before acting on any information provided. For expert assistance, contact us.