Ordinary Business and Special Business

Affluence Advisory Pvt. Ltd. Ordinary Business and Special Business In the governance of companies, the proceedings of shareholder meetings play a critical role. The agenda items discussed in these meetings can be broadly categorized into two types: Ordinary Business and Special Business. Understanding the distinction between these two is vital for both compliance with legal requirements and the smooth operation of the company. Ordinary Business: Ordinary business refers to routine matters that are usually addressed at the Annual General Meeting ( AGM ) of a company. These are standard agenda items which are typically expected to recur every year and are necessary for the regular functioning of the company. As per Section 102 of the Companies Act, 2013, the following matters to be considered as ordinary business: Consideration of financial Statements and the reports of the Board of Directors and auditors: This includes the adoption of the company's audited accounts, balance sheet, profit and loss account, Auditors Report and Directors Report including consolidated financial statements. Declaration of dividend: Declaration of dividend as recommended by the Board of Directors, if any. Appointment of Directors in whose place of those retiring: As per the company's articles of association or pursuant to the provisions of Section 152, the directors may retire by rotation or are due for re-election. The appointment or reappointment of such Directors falls under ordinary business. Appointment of the auditors and fixing of their remunerations: The shareholders approve the appointment of Statutory Auditors and fix their remuneration. Special Business: Special business refers to business categories that are not the same as regular business, however items other than abovementioned items transacted at an AGM shall be considered as Special business. Further, an Extra-Ordinary General Meeting ( EOGM ) is convened for transacting Special or Urgent business that may arise in between two AGM, hence all business transacted at an EOGM are called as special business, some of the common examples of special business are as follows: Amendment of Articles of Association or Memorandum of Association: Changes to these charter documents of the company are considered special business because they can significantly alter the company s governance or operational framework. CS Ritik Madnani | Affluence Advisory Pvt. Ltd. | Website - www.affluence.net.in |Email - connect@affluence.net.in

Affluence Advisory Pvt. Ltd. Ordinary Business and Special Business Issue of Securities: Approval for the issuance of new shares, debentures, or other securities. Changes in Capital Structure: Matters like increasing or reduction of share capital, or altering the rights of different classes of shares. Mergers, Acquisitions, and Disposals: Any major corporate actions such as mergers, acquisitions, or the sale of substantial assets. Some of the key Points of Differences between the two are mentioned as follows: Ordinary Business Explanatory Statement to be given with Notice For ordinary businesses, the explanatory statement is not required to be included in the notice of meeting. Special Business For special business, irrespective of ordinary or special resolution, the notice to be given to shareholders must explanatory statement that provides enough information for shareholders to make informed decisions. Postal Ballot Special business may be considered by means of a postal ballot. Resolution To approve a Special business at AGM or EOGM members may require to pass ordinary resolution or special resolution as per applicable provisions of the Companies Act, 2013. include a detailed Ordinary business shall not be transacted by means of a postal ballot To approve Ordinary business ordinary resolution is required to pass. Conclusion: The distinction between ordinary and special business in corporate governance is more than just a procedural matter; it reflects the varying levels of significance and impact of different agenda items. Ordinary business ensures the smooth, routine functioning of the company, while special business addresses significant issues that may shape the future of the organization. Properly categorizing and addressing these agenda items is crucial for ensuring legal compliance, protecting shareholder interests, and maintaining effective corporate governance. CS Ritik Madnani | Affluence Advisory Pvt. Ltd. | Website - www.affluence.net.in |Email - connect@affluence.net.in

Affluence Advisory Pvt. Ltd. Ordinary Business and Special Business Disclaimer:This article provides general information existing at the time of preparation and we take no responsibility to update it with the subsequent changes in the law. The article is intended as a news update and Affluence Advisory neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this article. It is recommended that professional advice be taken based on specific facts and circumstances. This article does not substitute the need to refer to the original pronouncement CS Ritik Madnani | Affluence Advisory Pvt. Ltd. | Website - www.affluence.net.in |Email - connect@affluence.net.in