All India Bar Examination (AIBE) 2-II Previous Year Question Papers with Answers

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80.

ABC Private Limited has ten shareholders who hold 1,000 equity shares each. ABC Private Limited calls a shareholders' meeting on January 1, 2011 with requisite notice. Only six shareholders attend the meeting. A motion is put to vote to change the name of the company. Four shareholders vote for the resolution and two shareholders vote against the resolution. Which of the following statements most accurately applies the principle set out below to the fact situation above ?


Principle :

A special resolution requires the approval of at least three-fourth majority of the shareholders present and voting at a shareholders' meeting. Matters that must be approved by way of special resolution include amendment to the Articles of Memorandum of Association of a company, change in name of the company, and to shift the registered office of the company from one state to another.
A: The resolution is not passed as at least five members, that is, fifty per cent of the shareholders should have voted for it.
B: The resolution is passed as an ordinary resolution as at least three- fourth majority is required for a special resolution.
C: The resolution is passed as a special resolution since at least three- fourth majority voted for the resolution.
D: The meeting was invalidly held since all the shareholders did not attend.
E: The resolution is not passed as it was not unanimously passed.

The answer is: C

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Explanation

The correct option is:

C: The resolution is passed as a special resolution since at least three-fourth majority voted for the resolution.

Explanation:

According to the principle mentioned, a special resolution requires the approval of at least three-fourth majority of the shareholders present and voting at a shareholders' meeting. The matter in question here is the change in the name of the company, which falls under the category of matters that must be approved by way of a special resolution.

In the given situation, there are 6 shareholders present at the meeting, and 4 of them voted for the resolution to change the name of the company. Since 4 out of 6 shareholders voted in favor of the resolution, it constitutes more than three-fourth (4/6 = 2/3, which is greater than 3/4) of the shareholders present and voting. Therefore, the resolution is passed as a special resolution because it meets the requirement of at least three-fourth majority.

Option C accurately applies the principle to the fact situation, and it correctly states that the resolution is passed as a special resolution since at least three-fourth majority voted for the resolution.