Resolutions

Resolutions means decisions taken by  the shareholders .under the companies Act decision can be taken by the shareholders by the following manner.

1) At a meeting of shareholders - by passing resolution . such resolution can  be

   a) An ordinary resolution
   b) A special resolution
   c) A resolution that requires Special notice

2) Without a meeting - by way of a  written resolution signed by the shareholders

3) Without a Meeting - by way of unanimous agreement in written by the shareholders ( Applicable only for private Companies)

1. Ordinary Resolutions:

Types of resolutions that can be resolved by 51 % simple majority of the attended shareholders and proxies are known as ordinary resolutions. Normally resolutions pertaining to internal matters belong to this catergory.

Specially to:
- Elect Directors
- Remove Directors
- To change no. of Directors
- Matters concerning letter of incorporation and Articles of Association.

 An ordinary resolution can be passed in a private Company by giving 15 working days notice. But in a public company 10 working days notice should be given.

2. Special Resolution

Types of resolutions, which should be passed by 3/4 of the shareholders and proxies attending a meeting with the required quorum , belong to htis catergory.

Special Resolutions is passed in following occasions

- Change of name of the company
- Alter the company objectives
- Merging the company
- to reduce the stated share capital
- When reserve capital is made
- Approve major Transaction
- Approve an amalgamation of the company

Shareholders resolutions in writing

For the first time in srilanka the shareholders resolution can be passed by way of  writing without convening general meetings. Subject to the provisions contained in the articles, a resolution in writing signed by not less than 85 % of the shareholders who would be entitled to vote on that resolution, is as valid as if had been passed at a meeting at those shareholders . however, if the secretary to the treasury is the holder of a share in the company his consent in favor of such resolution is mandatory.

Dissolution / winding up of companies:

modes if winding up;

-Voluntary Winding up
- By court order
- Under the supervision of the court

1. voluntarily winding up

A company may wound up voluntary
- By expiry of time ( when the period , if any fixed for the duration of the company by the AOA)
- By completion of venture
- when the company resolves by special resolution that the company wound up 
- Where the company resolves by extra ordinary resolution to  the effect that it cannot , by reason of its liabilities continue its business and that is advisable to wind up.

2. Winding Up by court

- By passing special  resolution by members stating that the company should be wound up  by court
- Failure to  commence business activities after one year from the  date  of incorporation
- Company does not have directors
- Members are below the  minimum  statutory limit 
- When company fails to repay debt
-  Anny occasion when court decides to dissolve  under just and equitable conditions.

3. Winding up under the supervision of court

When a company has passed a resolution for voluntary winding, the court may make an order that the voluntary winding up shall continue but subject to the supervision of the court.

Court will appoint a liquidator to carry out the liquidation subjeect to the supervision of the court.

Who  is a liquidator what are the functions that performed by him ?

Powers of liquidator

- Disposal of movable and immovable properties of the company
- signing all deeds and other documents of the company
- Pledge the company assets and borrows money
- Settlement of creditors
- Arranging with creditors to settle their  dues.
- Use of common seal of the company.