Introduction to this document

Shareholder resolutions summary

There are two main types of shareholder resolution. Use our summary table to make sure you are meeting the various requirements to ensure that your shareholders’ decisions are valid.

Which resolution?

Shareholders decisions are made by resolution. The type of resolution depends on the decision in question.

Most decisions can be made by ordinary resolution, which needs the approval of a simple majority of shareholders. This is the default form of resolution: if the legislation does not state that a special resolution is required, an ordinary resolution can be used. Note that the Companies Act 2006 requires an ordinary resolution to be used in some situations.

The Companies Act 2006 requires certain decisions to be made by special resolution, which needs the approval of 75% or more of the shareholders to be carried. These decisions tend to have a significant impact, such as changing the company’s articles or name, justifying the higher threshold for approval.

There is a third, far less common type of resolution: the extraordinary resolution. The Companies Act 2006 does not require any decisions to be made in this form, although some older forms of articles may still do so. Like special resolutions, they also need to be passed by at least 75% of the shareholders, and have to be filed at Companies House within 15 days of being passed. As they are rare now, they are not included in the summary.

How can the resolution be passed?

The vast majority of ordinary and special resolutions can be passed at a meeting or using the statutory written resolution procedure (or an alternative set out in the company’s articles). The only exceptions are ordinary resolutions to remove a director or auditor, which must be put to a meeting.