Extraordinary resolution

Extraordinary resolution

In business or commercial law, an extraordinary resolution or special resolution [Some jurisdictions use both terms, but meaning slightly different things. For example, in the United Kingdom, an extraordinary resolution is a resolution passed by not less than 75% of the members, and a special resolution is a resolution passed by the same majority, but having given then members not less than 21 days' notice of the intention to put the resolution to a vote, see section 378 of the Companies Act 1985] is a resolution passed by the shareholders of a company 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.

Extraordinary resolutions are generally only required in certain specific situations required by stature. For example, in the United Kingdom, to wind up 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.

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