Shareholders of the company pass ordinary resolutions. To conduct this meeting, 14 days’ prior notice must be given to all the members, and the resolutions are passed when 50% of the shareholder’s majority agrees to the formal decision. The meeting can also be held if the members of the limited companies who possess 95% of the voting rights agree to it.
An ordinary resolution is passed by way of a simple poll or raising of hands. In this vote, the majority includes the number of members voting, not the proxies or the members who abstain from voting.
Here are a few examples of when ordinary resolutions are important:
- To remove the director from office before the expiry of the director’s period of office
- To decide if a general meeting held is the Annual General Meeting (AGM)
- To appoint or re-appoint a director who is above the age of 70 years
- To declare dividends
- To employ and declare the remuneration of the auditors
- To elect new directors to replace retiring directors