The resolution extra-ordinary

An ordinary resolution can thus be defined as a resolution passed by a simple majority of the votes of the members entitled to vote and thus implies the voting in person or where allowed by proxy at a meeting where due notice has been given. Sec 168 gives provisions to the effect that a director may be removed from office by an ordinary resolution. An extra-ordinary resolution on the other hand is a resolution passed by at least a three-fourth majority of the members entitled to vote and voting in person or where allowed by proxy at a general meeting where the notice specifies the intention to propose the resolution as extra-ordinary.

A special resolution is a resolution passed by a majority of at least three –fourth of the members entitled to vote in person or where allowed by proxy. At a meeting in which a special resolution or an extra-ordinary resolution is to be submitted and is passed a declaration by the chairman is conducive that such resolution has carried the day unless otherwise the essence of this provision is to prohibit the resolution from being challenged on grounds that certain shareholders was not qualified to vote.

(Geoffrey Morse: 1983). If however, the declaration of the chairman is fraudulent, or shows on the face of it that the proper majority has not been obtained; it in effect bars the resolution from being conclusive. This was examined in the case of Re Coratal (New) Mines Ltd (1902) 2 ch. 498 where a special resolution was put to the meeting and the chairman said “those in favour 6: those against 23, but there are 200 voting by proxy and I declare there resolution carried”.

It was held that the declaration was not conclusive and thus the resolution was not passed. The judge started that the resolution had not been effectively submitted to the meeting, as the proper procedure of proxy was not followed. In Henderson-V Bank of Australasian (1890) 45- ch –D- 33d (C. A )it was established that if a positive amendment, pertinent to the subject matters of the proposed resolution, is proposed, it must be voted up first If the chairman refuses to put a proper amendment to the meeting the resolution.

if passed, is not binding. An amendment can not be moved if it goes beyond the notice convening the meeting. The notice of special business must state the resolution to be passed in such a way as to fairly state the purpose for which the meeting is convened, For any business to be undertaken, with the inclusion of voting, a quorum of members should be present. According to Geoffrey Morse, a quorum must be an effective quorum. In this case we shall examine what constitutes a quorum and an effective quorum for that matter.

For a quorum to be effective, it should constitute of shareholders with a majority of shares that they are conferred with voting rights in a meeting. This are members who are capable of taking part in the decision making of that particular company by airing their votes. It is however note worthy that articles or memorandums of association or notices for that matter may specify a quorum of members to be present in this case therefore voting by proxy may not be allowed as provided for in the case of M, Harris ltd.

Petitioners 1956 S. C 207, in which a member represented by an attorney was held not to be present as the notice clearly stated a present quorum. A quorum according to company law may constitute of two members present in person. Though no provision as regards quorum has been given in the Companies Act 2006 a quorum according to the previous Act of (1985) table A, part 1 article 53 and statutory usage fixed two members present in person or by proxy as a quorum in the case of a company.

Voting rights in an undertaking as established in schedule 6 and 7 as reads with section 1159 and 1162 of (2006) Act respectively are to the effect that reference is to the rights conferred on shareholders in respect of their shares or in the case of an undertaking not having share capital on members, to vote at general meetings of the undertaking on all, or substantially all matters. (Schedule 7 section 2. (1))