Extraordinary resolution
Encyclopedia
In business or commercial law, an extraordinary resolution or special resolution is a resolution
passed by the shareholders of a company by a greater majority than is required to pass an ordinary resolution
. The precise figures vary in different countries, but commonly an extraordinary resolution must be affirmed by not less than 75% of members casting votes, whereas an ordinary resolution only requires a bare majority.
Extraordinary resolutions are generally only required in certain specific situations required by statute. For example, in the United Kingdom
, to wind up a company voluntarily on the ground that it cannot by reason of its insolvency continue its business, requires an extraordinary resolution.
However, in certain circumstances a company may wish to amend its constitutional documents to provide that an extraordinary resolution needs to be passed prior to the company engaging in any reserved matters, purely as a matter of internal organisational control.
Resolution (law)
A resolution is a written motion adopted by a deliberative body. The substance of the resolution can be anything that can normally be proposed as a motion. For long or important motions, though, it is often better to have them written out so that discussion is easier or so that it can be...
passed by the shareholders of a company by a greater majority than is required to pass an ordinary resolution
Ordinary resolution
In business or commercial law in certain common law jurisdictions, an ordinary resolution is a resolution passed by the shareholders of a company by a simple or bare majority either at a convened meeting of shareholders or by circulating a resolution for signature...
. The precise figures vary in different countries, but commonly an extraordinary resolution must be affirmed by not less than 75% of members casting votes, whereas an ordinary resolution only requires a bare majority.
Extraordinary resolutions are generally only required in certain specific situations required by statute. For example, in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, to wind up a company voluntarily on the ground that it cannot by reason of its insolvency continue its business, requires an extraordinary resolution.
However, in certain circumstances a company may wish to amend its constitutional documents to provide that an extraordinary resolution needs to be passed prior to the company engaging in any reserved matters, purely as a matter of internal organisational control.