Decisions, resolutions and meetings

1. Who decides

Tamarind Advisory Ltd is the same private company. Meera holds 60 of the 100 ordinary shares and Ravi holds 40. Both are directors. The company has no constitution, so the Act supplies the procedure. The directors chapter is about what a director must do. This chapter is about the decision itself: who takes it, what majority it needs, and what happens when the wrong people take it.

The board manages the business. Shareholders exercise the powers the Act or a constitution reserves to them. Those shareholder powers are exercised in one of four ways: at a meeting, by a written resolution in place of a meeting, by a unanimous resolution, or, for a private company, by a unanimous shareholder agreement (section 103). The agreement is in the other companies chapter.

Decision at Tamarind	Who takes it	What the count uses
Hire a supplier, or buy a laptop worth Rs 40,000	The board	One vote per director. With no quorum fixed, both directors must take part.
Approve a dividend	The board authorises it, and the shareholders approve it by ordinary resolution	On a poll, the votes attached to the shares.
Adopt a constitution, approve a major transaction, approve an amalgamation, or put the company into liquidation	The shareholders, by special resolution	75 per cent of the votes of those entitled to vote and voting. A liquidation resolution cannot later be rescinded.
A paper instead of a shareholder meeting	Shareholders holding at least 75 per cent of the votes entitled to be cast	All 100 votes, whether or not everyone attends a meeting.

An ordinary resolution is a simple majority of the votes of those shareholders entitled to vote and voting (section 104). A special resolution is 75 per cent of those votes, or any higher majority the constitution requires. Even if a constitution tried to lower the threshold, the Act requires a special resolution to adopt, alter or revoke the constitution, to reduce stated capital, to approve a major transaction, to approve an amalgamation, or to put the company into liquidation (section 105). A power that must be exercised by ordinary or special resolution may instead be exercised by a unanimous resolution, which needs every shareholder entitled to vote (section 106).

A meeting of shareholders may also recommend a course to the board. That recommendation binds the board only if it is carried as a special resolution, or if a constitution says so (section 107). Tamarind has no constitution, so a recommendation carried by an ordinary resolution is advice to the directors. It does not replace their decision.

Companies Act, sections 103, 104, 105, 106 and 107.

2. Sixty votes, counted three ways

Both shareholders are entitled to vote. Each share carries one vote. Meera’s 60 shares are 60 votes. Ravi’s 40 shares are 40 votes.

A shareholders’ meeting can be held in three ways. A quorum can assemble in one place. The shareholders who make up a quorum can meet by audio, or by audio and visual, communication so that everyone taking part can hear the others throughout the meeting. The Registrar may also approve another manner (Fifth Schedule). Tamarind has no constitution, and section 119 applies that Schedule.

Unless a poll is demanded, a meeting in one place votes by voice or by show of hands, as the chairperson decides. On that vote, every shareholder present and voting has one vote. Meera has one vote. Ravi has one vote. The chairperson has no casting vote.

A poll counts the votes attached to the shares. It may be demanded before or after the vote on a show of hands, by at least five shareholders entitled to vote, by shareholders holding at least 10 per cent of the voting rights, by shareholders whose paid-up amount is at least 10 per cent of the paid-up amount on voting shares, or by the chairperson. Ravi’s 40 votes are 40 per cent of the voting rights, so he can demand a poll on his own. Tamarind has only two shareholders, so the five-shareholder route is not the one he uses.

A written resolution is a different count again. It is signed by shareholders who are entitled to vote and who hold not less than 75 per cent of the votes entitled to be cast (section 117). The votes entitled to be cast are 100. Seventy-five per cent of 100 is 75. Meera’s 60 are not enough. The paper may be several documents in the same form, including email. It is as valid as a resolution passed at a meeting.

The dividend, the constitution, and the paper

Proposal	How it is taken	Result
Ordinary resolution to approve a dividend. Both are in the room. Meera votes in favour and Ravi votes against. No poll is demanded.	Show of hands. One vote each.	Not passed. The votes are one and one, and there is no casting vote.
The same ordinary resolution, after Ravi demands a poll.	Poll. 60 votes to 40.	Passed. 60 is a simple majority of the 100 votes cast.
Special resolution to adopt a constitution. Both vote on a poll. Meera in favour, Ravi against.	Poll. 60 of 100 votes cast, which is 60 per cent.	Not passed. 60 per cent is below 75 per cent.
The same special resolution. Only Meera attends and votes.	She is the only shareholder voting. Her vote is all of the votes cast.	Passed. On a show of hands that is one vote out of one. On a poll it is 60 out of 60.
Written resolution signed only by Meera.	60 of the 100 votes entitled to be cast.	Not passed. The paper needs 75.

The chairperson’s declaration that a special resolution has passed is conclusive unless a poll is demanded (section 105). The same rule applies to the chairperson’s declaration on any resolution at the meeting, unless a poll is demanded.

In practice: write down whether the vote was a show of hands or a poll before you treat 60 shares as 60 votes. On a show of hands those 60 shares are one hand.

A shareholder may require the company to buy his shares where a special resolution alters the constitution so as to impose or remove a restriction on the company’s business, and he cast all the votes attached to shares registered in his name, of which he is the beneficial owner, against that resolution. Where that resolution was passed as a written resolution, the same right arises if he did not sign it (section 108). He gives written notice within 14 days of the meeting, or within 14 days of notice that the written resolution has passed. The board then has 28 days to tell him what it will do (section 109). Staying away from a meeting is not an against-vote. Section 108 also contains a cross-reference to provision 150(1)(c) and (d). In this consolidation that provision deals with the title of a person who later acquires property, and it does not set out those paragraphs. The limb this chapter applies is the constitution limb the section states in full.

Companies Act, sections 105, 108, 109, 117 and 119. Fifth Schedule.

3. The shareholders’ meeting

The board calls an annual meeting not more than once in each year, not later than 6 months after the balance sheet date, and not later than 15 months after the previous annual meeting. The Registrar may set another period in place of the 6 months. A company does not hold its first annual meeting in the calendar year of incorporation. It holds that meeting within 18 months of incorporation (section 115). Tamarind was incorporated in 2024, so that first-meeting rule has already run. Unless the company has already dealt with them, the annual meeting considers the financial statements, any auditor’s report, the annual report, the appointment of any directors the constitution requires to be appointed at that meeting, and the appointment of any auditor.

A special meeting of shareholders entitled to vote on an issue may be called by the board, or by a person the constitution authorises. The board must call it when shareholders who together hold shares carrying not less than 5 per cent of the voting rights on the issue ask in writing (section 116).

Ravi’s 40 votes are enough to require the meeting

Forty per cent is more than 5 per cent. Ravi’s written request obliges the board to call the meeting. Meera’s consent is not required for the request. The request does not itself pass the resolution he wants. It gets the meeting called. Tamarind has no constitution, so nobody is named in a constitution as an extra person who may call the meeting.

Written notice of the date, time and place goes to every shareholder entitled to receive it, and to every director, the secretary and the auditor, not less than 21 days before the meeting. The notice states the business in enough detail for a shareholder to form a reasoned judgment, and it sets out the text of any special resolution. A notice sent on 1 April for a meeting on 20 April gives 19 days. That is short of 21. The irregularity is waived if every shareholder entitled to attend and vote attends without protest, or if they all agree to the waiver.

A quorum is present when the shareholders or their proxies who are present, or who have cast postal votes, can between them exercise a majority of the votes to be cast. Meera’s 60 votes are a majority of 100, so she alone is a quorum. Ravi’s 40 votes are not a majority, so a meeting at which only he attends cannot transact business. If a quorum is still absent 30 minutes after the time appointed, an ordinary meeting is adjourned. At that adjourned meeting, the shareholders present are a quorum if a quorum has still not appeared within 30 minutes. Where the Court has ordered a meeting because it is in the company’s interests that one be held, and a quorum is not present within 30 minutes, that meeting is dissolved (section 118). A director, a shareholder or a creditor may ask the Court to order a meeting where calling or conducting one in the ordinary way is impracticable, or where a meeting is in the company’s interests.

Where the board has elected a chairperson and that chairperson is present, he or she chairs the shareholders’ meeting. If no chairperson has been elected, or the chairperson is not present within 15 minutes, the directors present choose one of themselves. If no director will act, or no director is there within 15 minutes, the shareholders present choose one of themselves.

Companies Act, sections 115, 116, 118 and 119. Fifth Schedule.

4. The board’s meeting

The proceedings of the board are in the Eighth Schedule (section 158). The directors’ duties, including the duty to attend with reasonable regularity, stay in the directors chapter. The three ways the board can decide are these.

Way of deciding	What has to happen at Tamarind
A meeting in one place	A quorum is assembled at the date, time and place in the notice.
A meeting by audio, or by audio and visual, communication	Every director taking part, and enough of them to be a quorum, can hear each other throughout the meeting.
A resolution in writing	It is signed or assented to by every director then entitled to receive notice of a board meeting. A copy goes into the minute book. It is as valid as a resolution passed at a meeting.

Notice goes to every director who is in Mauritius. Both Meera and Ravi live in Mauritius, so both are sent it. An irregularity is waived if every director entitled to notice attends without protest, or if they all agree to the waiver. The directors may elect a chairperson. That chairperson has no casting vote.

The board may fix its quorum. If it does not, the quorum is a majority of the directors. Tamarind has two directors and has not fixed a quorum. A majority of two is both of them. No business is transacted unless both are present, in the room or on a call where each can hear the other throughout. Each director has one vote. A director who is present and says nothing is presumed to have voted in favour, unless he expressly dissents or votes against the resolution.

Meera proposes a contract. Ravi attends and says nothing. He is presumed to have voted in favour, so the resolution passes. If he votes against, the votes are one and one. There is no casting vote, so the resolution does not pass. If only Meera attends, there is no quorum. A written resolution needs both signatures, because both are entitled to notice. Meera’s signature alone is not a resolution of the board. That is a different rule from the shareholders’ written resolution, which needs 75 of the 100 votes entitled to be cast and does not need every shareholder.

In practice: a two-director board that has not fixed a quorum cannot act through one director, in the room or on a paper.

Companies Act, section 158. Eighth Schedule.

5. Ratification, and a large purchase

Where a director or the board purports to exercise a power that belongs to the shareholders, or to someone else, those shareholders or that other person may ratify it in the same manner as they could have exercised the power. Once ratified, the act is treated as having been a proper exercise of the power from the start (section 180).

The board of Tamarind resolves, on its own, to adopt a constitution. Adopting a constitution is a shareholder power, and it requires a special resolution. The board’s resolution does not adopt it. The shareholders can ratify it by the special resolution section 105 requires. On a poll, with both voting, Meera’s 60 votes are 60 per cent and the ratification fails if Ravi votes against it. If the special resolution is passed, the adoption is treated as having been valid from the board’s resolution.

A contract made in the company’s name, or on its behalf, before incorporation is a separate ratification. The company may ratify it within the period the contract states, or, if the contract states none, within a reasonable time after incorporation. Ratification is done in the same manner as a contract made for the company under section 181. A ratified contract is as valid and enforceable as if the company had been a party when it was made (section 183).

The lease, inside the three months

Meera signs a lease for Tamarind two weeks before the certificate. The lease gives the company three months after incorporation to adopt it. Within those three months the board resolves to ratify, and Meera signs that ratification for the company. Tamarind is the tenant from the original date. A ratification after the three months is outside the period the contract fixed. The binding chapter follows that lease through to service at the registered office.

The workshop is 80 per cent of the assets

The directors must not enter a major transaction unless the shareholders have approved it by special resolution, or the transaction is conditional on that approval (section 130). A major transaction is an acquisition, a disposition, or a commitment whose value is more than 75 per cent of the company’s assets before the transaction. The same kind of transaction worth more than half the assets, and not more than 75 per cent, needs an ordinary resolution, or must be conditional on one. A charge given solely to secure repayment is not, by itself, a major transaction. The directors’ duty to obtain the authorisation is in the directors chapter. This is the count.

Tamarind’s assets are worth Rs 1,000,000. Both shareholders vote on a poll.

Proposal	Value	Share of assets	What the shareholders must do
Buy a workshop	Rs 800,000	80 per cent	Special resolution, or the purchase stays conditional on one. 60 of 100 votes cast is 60 per cent, so it fails if Ravi votes against it.
Buy equipment	Rs 600,000	60 per cent	Ordinary resolution. On a poll, 60 of 100 votes cast passes even if Ravi votes against. On a show of hands, one vote each does not pass if he votes against and nobody demands a poll.
Buy a laptop	Rs 40,000	4 per cent	No shareholder resolution under section 130. The board decides, and both directors must take part.

If Ravi does not vote on the workshop, Meera’s votes are all of the votes cast. The special resolution passes at the meeting. The same 60 votes still fail a written resolution, because that paper uses all 100 votes entitled to be cast.

Companies Act, sections 130, 180, 181 and 183.

What you should now be able to explain

Shareholder powers are exercised at a meeting, by a written resolution of holders of at least 75 per cent of the votes entitled to be cast, by a unanimous resolution, or by a unanimous shareholder agreement. On a show of hands Meera and Ravi have one vote each, and a one-to-one vote fails because there is no casting vote. On a poll the shares count, so 60 passes an ordinary resolution and fails a special resolution when both vote. Meera alone is a quorum of shareholders. She is not, on her own, a quorum of a two-director board that has not fixed one. A power the board takes from the shareholders can be ratified in the same way the shareholders could have exercised it. A pre-incorporation contract is ratified in the manner of a company contract, inside the period the contract states.

Next: the shares chapter takes the 60 and 40 holdings this chapter has counted and works through classes, what is paid and unpaid, and transfer.