Under what condition can a company sell or lease its undertaking?

A company can sell or lease its undertaking when it has been authorized by special resolution. This requirement is established to protect the interests of shareholders and ensure that significant decisions affecting the company's core business activities are made with appropriate consensus.

A special resolution requires a higher level of agreement, typically at least 75% of the votes cast by the shareholders, reflecting the importance and impact of the transaction. This process ensures that a substantial majority of shareholders are in favor of such a significant decision, thereby safeguarding the company's long-term strategy and the rights of minority shareholders.

While a majority decision may appear sufficient for routine business decisions, major transactions such as selling or leasing the entire undertaking often require the stronger endorsement of a special resolution to reflect the gravity of these actions. A unanimous shareholder agreement, while it provides consensus, is not a common requirement for all corporate decisions unless specifically outlined in the company’s bylaws. Financial pressure, while it may motivate a company to seek transactions, does not establish a legal foundation for such actions under company law.