7.5 Resolutions

7.5 RESOLUTIONS

Resolutions are formal decisions made by a company’s shareholders or board of directors. Resolutions are an important part of the decision-making process in corporate governance.

Ordinary resolutions

Ordinary resolutions are passed by a simple majority of votes cast by the shareholders or directors.

They are used for routine matters and general business decisions that do not require a higher level of approval.

Special resolutions

Special resolutions require a higher majority of votes to be passed, typically at least two-thirds or a specified majority of votes cast.

Special resolutions are used for significant decisions that have a more substantial impact on the company’s operations or structure.

Examples of matters typically decided by special resolutions include amending the company’s constitution, changing the company’s name, approving share buybacks, or authorizing a reduction of share capital.

Written resolutions

In addition to resolutions passed during meetings, companies may also use written resolutions.

Written resolutions are resolutions that are circulated among the shareholders or directors, who then sign and return the document indicating their approval or disapproval.

Notice and documentation

Resolutions, whether ordinary or special, are usually proposed and discussed during company meetings.

Proper notice of the meeting and the resolution to be voted upon must be provided to the participants.