Shareholder Resolutions UK: Ordinary vs Special

What this document is

A shareholder resolution is a formal decision taken by the members (shareholders) of a company. It is the mechanism by which owners exercise their collective authority, whether that involves approving routine business or sanctioning fundamental changes to how the company is run.

Resolutions can be passed at a general meeting, where members vote in person or by proxy, or through the written resolution procedure available to private companies. The Companies Act 2006 sets out two main categories: ordinary resolutions, which pass on a simple majority of more than 50% of the votes cast, and special resolutions, which require at least 75% of the votes cast.

The default position in UK company law is that an ordinary resolution will be sufficient unless the Act or the company's articles of association specifically require something higher. Certain decisions, such as changing the company name, altering the articles, or reducing share capital, are reserved by statute for special resolutions. Getting the category right is essential, because a resolution passed at the wrong threshold may be invalid.

How to use this document

1. Identify what type of decision is being made. Before anything else, work out whether the matter falls within routine company business or touches something more fundamental such as the constitution, share capital, or company name. The nature of the decision determines the threshold you need to meet and whether statute or the articles impose specific procedural requirements. 2. Check the articles of association and the Companies Act 2006. The articles may impose a higher threshold than the statutory default for certain decisions. Read them carefully alongside the relevant provisions of the Act. If the articles are silent, the Act's default applies, which means an ordinary resolution unless a special resolution is specifically mandated. 3. Decide between a general meeting and a written resolution. Private companies can often use the written resolution procedure, which avoids the need to hold a physical meeting. Public companies cannot use this shortcut. Consider what is practical given the number of shareholders, the urgency of the decision, and whether open discussion would be valuable before the vote. 4. Give proper notice and draft the resolution clearly. If holding a general meeting, the correct notice period must be observed and the resolution wording circulated in advance. For written resolutions, the proposed text is sent to every eligible member. The wording must be precise, because shareholders vote on the text exactly as presented rather than on a general concept. 5. Record the outcome and file with Companies House where required. Once passed, the resolution should be recorded in the company's statutory records. Certain resolutions, particularly special resolutions and resolutions affecting share capital or the articles, must be filed with Companies House, usually within 15 days. Failure to file can result in penalties and may create confusion about the company's current position.