As a limited company in England and Wales, you should ensure you are familiar with the different ways your business can pass a resolution. In some cases when you are making important decisions, you may have to pass a special resolution. An important feature of special resolutions is that they require more than a simple majority to pass. <\/p>\n\n\n\n
This article will explain what a special resolution is, some of the rules surrounding special resolutions, and when you may have to use one. <\/p>\n\n\n\n
A special resolution is a company resolution that requires a 75% majority in a vote held with shareholders. In contrast, an ordinary resolution<\/a> requires a simple majority of over 50% of votes in favour of the resolution. <\/p>\n\n\n\n Certain important decisions require a company to make a special resolution. The Companies Act 2006<\/a> outlines certain decisions that companies can only make via special resolution. Some examples include:<\/p>\n\n\n\n Further, a company can also mandate that its board make certain decisions via special resolutions. They can do this by writing it into the company’s articles of association, or constitution. <\/p>\n\n\n\n The purpose of a special resolution is to protect minority shareholders<\/a> when a company makes important decisions. It allows for a 25% minority to overrule a decision. This means that a majority cannot simply push through actions at a board meeting if it is discriminatory against minority shareholders. <\/p>\n\n\n\n Alongside this, using a special resolution also helps ensure the company is properly considering and judging decisions. Having more support than just a simple majority means that the decision is likely to be in the better interest of all shareholders. This is because the majority have to win most of the support of the minority. <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n\n
Why Use a Special Resolution?<\/h2>\n\n\n\n