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Nitin (student)     02 July 2008

why do we prefer 25% over 26% stake in a company

I would appreciate if any of the members of this group is willing to answer my question which is as under:

Why 25% stake in a company is beneficial than 26 % stake


 2 Replies

Guest (n/a)     02 July 2008

Dear Nitin,


Firstly when u say 25% is preferred over 26%, u r not correct.. its the othrways infact.


Secondly, if u read section 189.2(c) of the companies Act, 1956, ull notice that for passing a special resolution,one needs atleast 75% shares in favour of the motion which effectively means that to block the resolution one has to have more than atleast 25% votes agaisnt the motion and thats exactly why this 26% stake in the company is so so important.


i hope this clarifies ur doubt.


Nitin (student)     09 July 2008

Thanks Anchal for providing the information I have gone through section 189. But I'll apreciate if you could also divulge on the nature of special resolutions i.e. what resolutions are special resolutions. Please reply if you consider it appropriate. Thanks once again.

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