Ordinary resolution: meaning, examples and voting rule
An ordinary resolution passes when votes in favour exceed votes against under section 114(1). AGM items like adopting accounts and dividends use it.
Short answer
An ordinary resolution is a shareholders' resolution that passes when the votes cast in favour, including the chairperson's casting vote if any, exceed the votes cast against, under section 114(1) of the Companies Act, 2013. It is the default type of resolution and is used for routine business such as adopting accounts, declaring dividends and appointing directors and auditors.
- Voting test
- Votes for exceed votes against
- Defined in
- Section 114(1), Companies Act 2013
- Typical use
- Ordinary business at the AGM
When an ordinary resolution is enough
Unless the Act or the articles specifically require a special resolution, shareholder approval is given by ordinary resolution. At an AGM, the ordinary business items are all passed this way, and several important capital actions also need only a simple majority.
- Adopting audited financial statements and the board's report
- Declaring a final dividend
- Appointing or reappointing directors and fixing their terms
- Appointing the statutory auditor and fixing remuneration
- Increasing authorised capital under section 61, if the articles permit
- Removing a director under section 169, after special notice
How it is passed
An ordinary resolution can be passed at a general meeting by show of hands, by poll, or through postal ballot or e-voting where those apply. Only votes actually cast count, so members who abstain or stay away do not affect the result. Where the articles give the chairperson a casting vote, it can break a tie.
Most ordinary resolutions do not need to be filed with the ROC, but some do, such as the increase in authorised capital, which is filed in Form SH-7, and the appointment of an auditor, which is filed in Form ADT-1.
Why it matters for startups
Founders with a simple majority can pass ordinary resolutions on their own, which is why investors often negotiate reserved matters in the shareholders' agreement and articles. These require investor consent for decisions that would otherwise need only an ordinary resolution, such as appointing new directors or changing the auditor. Read the reserved matters list before calling any vote.
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Sources
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
Is a majority of members needed for an ordinary resolution?
No. The test is votes cast, which depend on shareholding on a poll. A single majority shareholder can carry an ordinary resolution.
What is an ordinary resolution with special notice?
Some matters, such as removing a director or replacing a retiring auditor, need special notice of at least 14 days from members before the resolution is moved.
Are ordinary resolutions filed with the ROC?
Generally not, except where a specific form applies, such as SH-7 for an increase in authorised capital.