Life Insurance Corporation of India holds twenty five percent of subscribed capital of XYZ Ltd. The appointment of statutory auditor in XYZ Ltd. Would be by _________________.
A
Ordinary resolution
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B
Special resolution
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C
Both (A) & (B)
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D
None of the above
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Solution
The correct option is B Special resolution Life Insurance Corporation is owned by the Government of India.
Life Insurance Corporation holds 25% in XYZ Ltd.; which means government of India has interest in the said company.
Due to this reason, as per the companies act, a special resolution is required for appointment of statutory auditor i.e resolution is to be passed by majority of not less than two third of votes.