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In business or commercial law, an extraordinary resolution or special resolutionSome jurisdictions use both terms, but meaning slightly different things. For example, in the United Kingdom, an extraordinary resolution is a resolution passed by not less than 75% of the members, and a special resolution is a resolution passed by the same majority, but having given then members not less than 21 days' notice of the intention to put the resolution to a vote, see section 378 of the
Companies Act 1985
The Companies Act 1985 (c. 6) is an Act of the Parliament of the United Kingdom of Great Britain and Northern Ireland, enacted in 1985, which enabled companies to be formed by registration, and set out the responsibilities of companies, their d ...
is a
resolution
Resolution(s) may refer to:
Common meanings
* Resolution (debate), the statement which is debated in policy debate
* Resolution (law), a written motion adopted by a deliberative body
* New Year's resolution, a commitment that an individual mak ...
passed by the
shareholders
A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal owner ...
of a
company
A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common p ...
by a greater majority than is required to pass an
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 (for example more than 50% of the vote) either at a convened meeting of ...
. 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
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
, to
liquidate
Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia
Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign coun ...
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
In relation to juristic persons, the constitutional documents (sometimes referred to as the charter documents) are the documents which define the existence of an entity and regulate the structure and control of that entity and its members. The pre ...
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.