Difference between Ordinary Resolution and Special Resolution
Basis |
Ordinary Resolution |
Special Resolution |
---|---|---|
Decision Type | Ordinary resolutions handle everyday tasks like appointing directors or approving financial statements. | Special resolutions tackle significant matters such as changing the company’s constitution or structure. |
Approval Threshold | For ordinary resolutions to pass, they need more than half of the votes cast, which is called a simple majority. | Special resolutions require a higher majority, at least 75% of votes cast. |
Voting Process | The voting process for ordinary resolutions is simple. | The voting process for special resolutions is more thorough and stringent. |
Matters Addressed | Ordinary resolutions deal with routine operational issues without fundamentally altering the company’s structure. | Special resolutions address changes to the company’s framework that are fundamental. |
Legal Implications | Ordinary resolutions have fewer legal consequences compared to special resolutions. | Special resolutions carry more significant legal consequences. |
Examples | Examples of ordinary resolutions include appointing directors or approving financial statements. | Examples of special resolutions include changing the company’s name or altering its constitution. |
Frequency | Ordinary resolutions occur more often in company meetings due to their routine nature. | Special resolutions are less common and are reserved for significant matters. |
Importance | While important, ordinary resolutions do not fundamentally change the company’s structure. | Special resolutions significantly impact the company’s constitution or structure. |
Difference between Ordinary and Special Resolution
Ordinary and Special resolutions are the two most important resolutions that a company can take to make important decisions. Ordinary resolutions deal with everyday matters like appointing directors or approving financial statements. They require a simple majority, meaning more than half of the votes cast. In contrast, Special resolutions handle significant decisions like changing a company’s name or altering its constitution. These need a higher majority, usually at least 75% of the votes. Simply put, ordinary resolutions cover routine changes, while special resolutions are for major changes. Understanding the difference between them is crucial for managing a company effectively and ensuring important decisions are made correctly.