definition of Special Resolution
A special resolution refers to a formal decision made by the majority of a company's shareholders or members that requires a higher level of support than ordinary resolutions. This type of resolution is typically used for significant changes or actions that affect the company's structure or constitution, such as altering the articles of association, changing the company name, approving major investments or acquisitions, amending the company's share capital, or winding up the company. The specific requirements regarding the level of support needed to pass a special resolution may vary depending on the jurisdiction and the company's governing documents. In general, the threshold for passing a special resolution is usually higher, often requiring a vote of at least 75% or two-thirds of the shareholders or members present at a properly convened meeting.
A special resolution is a formal decision made by a company that requires a higher level of approval than an ordinary resolution. It is typically used for important or significant matters that significantly impact the company's constitution or operations. Special resolutions are subject to specific legal requirements and must be passed by a specified majority of shareholders or members to be considered valid.
To pass a special resolution, certain procedural steps must be followed, such as providing notice of the proposed resolution to all members or shareholders, conducting a meeting where the resolution is discussed and voted upon, and ensuring that the specified majority required by law or the company's constitution is achieved.
The matters that typically require a special resolution may include changes to the company's name, alterations to its constitution or articles of association, amending share structures, approving mergers or acquisitions, issuing additional shares, reducing share capital, or making significant changes to the company's business activities.
Once passed, a special resolution has the same legal effect as an ordinary resolution but holds greater significance due to the higher level of shareholder or member approval required.