In business or commercial law, an extraordinary resolution or special resolution is a resolution passed by the

shareholders A shareholder (in the United States often referred to as stockholder) of corporate stock refers to an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the ...

of a

company A company, abbreviated as co., is a Legal personality, legal entity representing an association of legal people, whether Natural person, natural, Juridical person, juridical or a mixture of both, with a specific objective. Company members ...

by a greater majority than is required to pass an ordinary resolution. 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. Some jurisdictions use both terms, while meaning slightly different things. For example, in the United Kingdom under the Companies Act 1985, an extraordinary resolution was a resolution passed by not less than 75% of the members, whereas a special resolution was a resolution passed by the same majority, but having given the members not less than 21 days' notice of the intention to put the resolution to a vote. The distinction was not maintained under the Companies Act 2006.UK Legislation
Companies Act 1985, section 378: Notice of repeal
accessed on 22 October 2024 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 Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...

, to liquidate 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 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.

References

{{reflist Corporate law Legal terminology Business law Resolutions (law) Shareholders