A resolution is a determination which is made to pursue or adopt a course of action by those owning or running a company.
The process of passing a resolution usually begins when a suggestion is aired at or before a meeting of the company. Following a vote on the proposal put forward, the measure is either passed or declined.
Once a proposal has succeeded in being passed, it then becomes part of the company’s constitution and will then affect the stated areas which it covers.
Types of Resolutions
There are two main types of resolutions which affect UK companies. These are ordinary and special resolutions.
Ordinary resolutions usually require a straight 51 percent majority to be passed, whereas special motions are deemed to have been successful if 75% or more votes are held to be in favour of the proposal.
On the passing of a company resolution, a copy containing the details of it must be sent to Companies House with 15 days of the relevant vote taking place.
Voting on Company Resolutions
The numbers of required votes necessary to pass a resolution will depend on what the specific motion is.
Some motions are governed by the Companies Act (subject to any amendment in the memorandum and articles of association) or by the company’s constitution itself where the law remains silent.
Votes are usually counted based on the number of shares held by an individual which are cast and not on the number of people approving or dissenting on a particular motion.
Thus, the votes cast by individuals who controls a substantial number of shares is generally given a greater weighting than a group of people who have fewer shares under the control.