2. Sharon is a trainee supporting the licensed secretary of a
public listed company. Explain to her the following matters to
enable her to discharge her duties:
(a) The circumstances that a corporation (“S”) shall be deemed to
be a subsidiary of another corporation (“H”). (10 marks)
(b) Rules on the passing of ordinary and special resolutions. (10
marks)
(c) The procedure for removing a director of the company. (10
marks)
a) When a company which is being controlled by another company then such company is treated as subsidiary of that company. Company who control the company is known as Parents or Holding Company. The relationship of holding and subsidiary arises by establishing control over ownership by controlling more than 50% of voting stock of subsidiary company. The level of subsidiary also allocated based on the % voting stock in First-Tier, Second-Tier, and Third-Tier of subsidiaries.
b) Ordinary Resolution is a resolution which can be passed only by the majority of shareholders either by show of hands or by using poll or by using postal ballot. However, special resolution requires minimum 75% casting votes to pass the special resolution. Special resolution is required only for specific case like Alteration of Memorandum, Change in Object Clause of Memorandum, and Alteration of Article of Association etc. For passing the Special Resolution, intention to pass special resolution must be specified in the notice of meeting.
c) A company has the right to remove the Director by the Board only by passing the Ordinary Resolution if the director is not appointed by the Central Government or the Tribunal. In Board Meeting, resolution for holding extra ordinary meeting will be passed for removing the director with the consent of all the shareholders. After the Board Meeting, General Meeting will be held only after giving 21 day’s clear notice for passing resolution for removal of director. After passing the resolution in general meeting and opportunity of being heard will also given to the director before removal.
2. Sharon is a trainee supporting the licensed secretary of a public listed company. Explain to...