Ordinary vs. Special Resolution: Key Differences & When Each Applies
Ordinary Resolution needs a simple majority (>50%) of votes cast to pass. Special Resolution requires a higher threshold—usually 75%—and often a 21-day notice. Both are formal company decisions, but their power and legal weight differ sharply.
People confuse them because “special” sounds like “important,” yet many routine matters (appointing auditors) use Special Resolution, while “ordinary” issues (dividend approval) can feel major. The jargon hides the real trigger: legal consequence, not size.
Key Differences
Ordinary Resolutions change day-to-day policies, approve accounts, or elect directors—simple majority suffices. Special Resolutions amend the constitution, reduce capital, or wind up the company—needing 75% and stricter filings with regulators.
Which One Should You Choose?
Check your Articles of Association first. If the change limits shareholder rights, alters share classes, or affects the company’s legal identity, pick Special. For routine approvals—bonuses, director pay, auditor hire—Ordinary is faster and cheaper.
Examples and Daily Life
A startup renaming itself from “TechFlow Inc.” to “FlowAI Inc.” uses Special Resolution. Approving the annual report or declaring a $0.10 dividend? That’s Ordinary Resolution territory—no notarised forms needed.
Can a Special Resolution be reversed?
Yes, by another Special Resolution with 75% approval, unless the Articles impose extra hurdles.
What if turnout is low?
Ordinary still passes with >50% of votes cast, but Special needs 75% of those present, so low turnout can kill it.
Do private companies follow the same thresholds?
Most do, unless shareholders unanimously agree in writing to override via a written resolution.