- January 5, 2022 at 8:56 am #645323MichelleJMember
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Could you please tell me when to use the ordinary resolution and when to use special resolution?
How to remember which resolution is used in the particular situation?
Thanks in advance 🙂January 13, 2022 at 9:00 am #645818MikeLittleKeymaster
- Topics: 26
- Replies: 22705
There is a clue in their names! Ordinary resolutions tend, for the most part, to be related to matters that are unexceptional or ordinary. Matters that relate to the everyday running of the business but for which the Board of Directors need the approval of a simple majority of shareholders
Special resolutions, on the other hand, relate to matters of particular interest, matters that are out of the ordinary (note, I didn’t use the word ‘extraordinary’ there! Extraordinary resolutions USED to exist but do so no longer)
Matters requiring the approval of 3/4 of the members’ votes include such major shifts in a company’s status or position such as changing its name or its constitution
How to remember them? If you really, really wanted to, you could prepare a list of matters requiring a special resolution (there aren’t that many, relatively speaking) and then, by default, anything else would be ordinary.
But you will NEVER be asked for such a list so better simply to jot down on your own piece of paper any resolutions that you come to in the notes or lectures that do require a special majority of not less than 75% of the votes cast in favour of the resolution
Note also that there are ordinary resolutions that require special notice. There are only 5 of these and they are covered in the course notes (and they are NOT to be confused with special resolutions)
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