Special Resolution

Under the Companies Act 2006 any company decision must be made via resolutions. There are certain decisions that are more sensitive in nature to the Company and so they must be passed by a special reolution. A special resolution requires at least 75% of the votes cast by shareholders in favour of it in order to pass.Whereas an ordinary resolution requires majority or more than 50% of the votes cast.Special resolution can be passed as a written resolution by the shareholders or collective poll at a general meeting of shareholders which is then documented.There are a number of transactions that need a special resolution to be passed.

We have listed a few examples below

  • To change the Company name
  • To amend the Company's article of association
  • Reduction in share capital of the Company
  • Certain cases where the company purchases its own shares
  • Winding up of the company voluntarily or via the court
The Company's Act allows other decisions to be passed thorugh special resolution which under normal circumstances can be passed through ordinary resolution. You can write into your Articles of Association what important decisions or transactions you would like to hold a special resolution to decide. This can act as a safeguard measure from any risky decision being taken that can effect the future Company's operations.