Ordinary Resolution vs. Special Resolution: What's the Difference?
Edited by Aimie Carlson || By Janet White || Published on December 26, 2023
Ordinary resolution involves a simple majority vote, while special resolution requires a higher majority, often 75%.
Key Differences
Ordinary resolutions are typically passed with a simple majority vote, usually more than 50% of the votes cast. In contrast, special resolutions demand a higher threshold, often 75% or more, signifying greater consensus among stakeholders.
Special resolutions are used for significant company decisions, such as altering the constitution or authorizing share buybacks. Ordinary resolutions, however, are suited for routine governance matters, like appointing directors or approving financial statements.
The notice period for a special resolution is usually longer compared to an ordinary resolution, reflecting the gravity of the decisions involved. Ordinary resolutions may require shorter notice, enabling quicker decision-making on standard business matters.
Ordinary resolutions are often part of regular annual general meetings, focusing on standard operational issues. Special resolutions, due to their impact, are reserved for extraordinary meetings or specific agenda items requiring detailed deliberation.
Voting mechanisms may differ: ordinary resolutions might be passed with a show of hands or simple polling, whereas special resolutions often necessitate a more formal, recorded vote to ensure transparency and accuracy due to their significant nature.
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Comparison Chart
Majority Required
Simple majority (>50%)
Higher majority (usually >75%)
Usage
Routine company decisions
Significant changes or actions
Notice Period
Shorter
Longer
Meeting Type
Annual general meetings
Extraordinary meetings or specific agenda items
Voting Mechanism
Show of hands or simple polling
Formal, recorded vote
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Ordinary Resolution and Special Resolution Definitions
Ordinary Resolution
Ordinary resolution refers to regular business decisions in a company meeting.
The ordinary resolution confirmed the annual financial statements.
Special Resolution
A special resolution is a decision requiring a higher than normal majority.
Amending the company’s constitution required a special resolution.
Ordinary Resolution
This resolution is used for non-critical company decisions.
A new auditor was appointed by an ordinary resolution.
Special Resolution
This resolution is for extraordinary company matters.
The merger with another company was approved through a special resolution.
Ordinary Resolution
It's a standard vote on routine corporate matters.
The annual dividends were approved through an ordinary resolution.
Special Resolution
Special resolution refers to critical decisions needing a large consensus.
A special resolution was needed to change the company name.
Ordinary Resolution
An ordinary resolution is a decision passed by a simple majority in a meeting.
The company passed an ordinary resolution to appoint a new director.
Special Resolution
Special resolutions are integral for major structural changes in a company.
Dissolving the company was passed as a special resolution.
Ordinary Resolution
Ordinary resolutions are common in annual general meetings for regular governance.
The ordinary resolution to elect committee members was quickly passed.
Special Resolution
It's used for significant, impactful company decisions.
The special resolution authorized the sale of a major company asset.
FAQs
Can ordinary resolutions be used for major company changes?
No, ordinary resolutions are typically for routine matters, while major changes require special resolutions.
What constitutes an ordinary resolution?
An ordinary resolution is made with a simple majority vote in a company meeting.
What types of decisions need a special resolution?
Decisions like altering the company's constitution, major asset sales, or mergers require a special resolution.
Are board members' elections done through ordinary resolutions?
Generally, yes, board member elections are done through ordinary resolutions.
Do special resolutions need a longer notice period?
Yes, due to their significance, special resolutions generally have a longer notice period.
Can an ordinary resolution be used to dismiss a director?
Typically, yes, as it is considered a routine governance matter.
How is a special resolution different from an ordinary one?
A special resolution requires a higher majority, often more than 75%, compared to the simple majority for an ordinary resolution.
Is the voting process different for these resolutions?
Yes, special resolutions often require a formal, recorded vote, while ordinary resolutions may use simpler methods.
Can ordinary resolutions be passed in any meeting?
Yes, they can be passed in annual general meetings or special meetings, provided the required majority is met.
Can a special resolution be reversed?
Reversing a special resolution typically requires another special resolution.
Does the law specify what constitutes a special resolution?
Yes, legal frameworks often define the criteria and use of special resolutions.
Can ordinary resolutions be informal?
While less formal than special resolutions, they still require proper documentation and voting processes.
Is shareholder approval different for these resolutions?
Yes, the extent of shareholder approval required is higher for special resolutions.
Is a special majority always 75% for special resolutions?
Often, but the exact percentage can vary depending on the company's constitution or legal requirements.
Who can call for a special resolution?
Typically, the board of directors or a significant percentage of shareholders can call for a special resolution.
Are special resolutions common in annual meetings?
No, they are reserved for extraordinary meetings or specific, significant agenda items.
Can ordinary resolutions change company bylaws?
No, changing bylaws usually requires a special resolution.
Are special resolutions publicly recorded?
Yes, they are often recorded and made public, especially for listed companies.
Can any shareholder propose an ordinary resolution?
Generally, shareholders with a certain percentage of shares can propose ordinary resolutions.
Is legal advice required for special resolutions?
While not always legally required, it's advisable due to the significant nature of these decisions.
About Author
Written by
Janet WhiteJanet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Aimie CarlsonAimie Carlson, holding a master's degree in English literature, is a fervent English language enthusiast. She lends her writing talents to Difference Wiki, a prominent website that specializes in comparisons, offering readers insightful analyses that both captivate and inform.
