Resolution: Importance and Objectives of Resolution, Types of Resolution

 

Concept of Resolution

There are different meanings of resolution; but here, resolution is a written proposal.

It is presented in the meeting by a member for discussion and decision.

There may be different problems about members or shareholders.

They can solve their problems as in group or individual through resolution.

 

When problems are presented in the meeting, decisions are made after making discussion on particulars problem, topic or agenda in a meeting. 

The decision may be in favour or against.

Decision is depended on majority.

Sometimes a resolution may be passed with certain amendment (change) or may be postponed.

 

Resolution is presented and passed in every independent organization.

If resolution is related to nation, it is presented in ministry or parliament.

It is presented by authorized person in the council. 

 

Definition  According to Oxford Dictionary, “Resolution is a formal statement of an opinion agreed on by a committee or a council, especially by means of a vote.”

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Keep in Mind (KIM)

In business organization, resolution may be related to member(s) or shareholder(s) or board of director.

It may be about plans, policies, rules and regulations of an organization.

 

Importance and Objectives of Resolution

The main importances and objectives are given below:

·          Resolution is written statement that helps to management for taking effective decisions.

·          It helps to organization to make formal decision.

·          It helps to organization to make necessary rules and regulation for effective decision.

·          It provides written document as evidence at the time of misunderstanding.

·          It provides legal formalities to take decision.

·          It helps to solve problems of staff also.

·          It helps to amend rules and regulations.

·          It clears any confusion related to rules of organization.

 

Types of Resolution

According to Nepal Company Act, 2063 BS, there are two types of resolutions; they are ordinary resolution and special resolution.

(A) Ordinary Resolution

Under ordinary resolution, decision is taken on the basis of shareholders.

The majority of shareholders must be more than 50% presented in the meeting.

Ordinary resolution is related to general activities of the company.

This resolution is presented in the board meeting or annual general meeting.

Under ordinary resolution, following matters are presented:

·          Audited profit and loss account and balance sheet of previous year.

·          Dividend policy

·          Appointment of directors and auditors.

·          Remuneration of director and auditors etc.

 

(B) Special Resolution

Under special resolution, decision is taken on the basis of special majority.

The majority of shareholders must be more than 75% or 2/3^th presented in the meeting.

Special resolution is related to important matters which cannot be decided by simple majority.

This resolution is presented in annual general meeting or special general meeting.

Under special resolution, following matters are presented:

·          Issue of bonus shares.

·          Change in Memorandum of Association and Article of Association.

·          Change the name, objective or capital of the company.

·          Conversion of company from private to limited or vice versa.

·          Winding up of the company etc.

 

Different Between Ordinary Resolution and Special Resolution

Bases	Ordinary Resolution	Special Resolution
Member	Ordinary resolution is related to ordinary members or shareholders	Special resolution is related to executive level.
Pass	It is passed by simple majority that is 51% of presented members.	It is passed by special majority that is 75% of presented members.
Time	For private company, at least 21 days’ notice must be given to executive.	For public company, at least 14 days’ notice must be given to executive.
Subject	Generally, ordinary resolutions deal with day to day matters which are lesser importance	Special resolutions certain important matters.

 

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THEORETICAL   QUESTIONS

 

Theoretical Questions

Very Short Answer Questions

VSAQ 1:     Write the meaning of office.

VSAQ 2:     What is office procedure?

VSAQ 3:     What is tippani?

VSAQ 4:     What is report?

VSAQ 5:     What is resolution?

 

Short Answer Questions

SAQ 1: What do you mean by office? Write any four considerations for office procedures.

SAQ 2: What do you mean by tippani? Write any four objectives of tippani.

SAQ 3: Write the meaning of tippani. Write any four considerations while drafting tippani.

SAQ 4: What do you mean by report? Write any four objectives of report.

SAQ 5: Write any five types of report with short explain.

SAQ 6: What do you mean by resolution? Write any four objectives of resolution.

SAQ 7: What is resolution? Show any four different between ordinary and special resolution.

 

Long Answer Questions

LAQ 1: Write the meaning resolution? Write types of resolution.

LAQ 2: Write the meaning of report. Explain any for types of report in detail.

 

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