Difference in Ordinary Resolution vs Special Resolution ?

Ordinary Resolution vs. Special Resolution

A resolution is a formal means by which a company record decisions made during a meeting of its members. Most decisions that affect a company are required to be made through a resolution. Additionally, the company's Articles of Association, which serve as its constitution, may contain specific provisions outlining which decisions must be made through a resolution.


Ordinary Resolution

An ordinary resolution is one that has more votes in favor than against it, with a majority of over 50% of the members, including shareholders or directors, who attend the General Meeting either in person or by proxy. The resolution can be passed by a show of hands, polling, or electronically.

Proper notice of the meeting must be given to members, and those who do not participate in voting are not considered. Typically, an ordinary resolution is required to conduct routine business at the Annual General Meeting (AGM).

Ordinary resolutions are required for the following decisions:

  • Appointment of directors
  • Appointment of auditors and their remuneration
  • Adoption of financial statements
  • Declaration of dividend

Special Resolution

A Special Resolution (SR) is a type of resolution where the number of votes in favor must be three times greater than the number of votes against it.

Unlike ordinary resolutions, which are determined based on the number of shares held by each shareholder, SRs require at least 75% of the shareholders to agree.

According to the Companies Act 2013, specific changes require the passing of SRs. Certain actions can only be taken by a company if a special resolution is passed at a general meeting. Members must be given proper notice of the meeting, and the notice must specifically state the intention to propose an SR.

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