At a company’s general meeting, which shareholders attend to discuss matters relating to the company, any decisions made by the members are ratified by means of a company resolution. The requirements for this are set out in the Companies Act and the articles of association and any resolutions made must adhere to these requirements.
What is an Ordinary resolution?
An ordinary resolution can be passed by a simple vote either by proxy or in person and is passed by a majority. Most standard business decisions are made with an Ordinary Resolution at an Annual General Meeting. The notice period for those entitled to attend and vote is 7 clear working days. Below are some examples of other decisions passed by ordinary resolution:
- Giving a company authority to purchase its own shares
- Appointing or removing a company director or secretary
What is a Special Resolution?
Not all changes can be made with an Ordinary Resolution. Special Resolutions are made in order to make any significant changes to a Company's constitution or share structure. In contrast to an ordinary Resolution, which can be passed with a simple majority vote, Special Resolutions are passed with a majority vote of at least 75%. At least 21 days clear notice needs to be given for a special resolution to all of those that are entitled to attend and vote. Examples of the types of decisions made by special resolution are:
- Making amendments to the articles of association
- Change of company name
- Share capital reduction
These are merely examples and this list is not exhaustive. There are many changes that may need to be made throughout the life of the company. If you require assistance with making changes within your company please contact us for advice.