Ordinary vs Special Resolution: Key Differences And When To Use Each

If you run a UK company, you’ll eventually hit a moment where you need to make a decision “formally” - not just by email, Slack, or a quick chat between directors.

That’s where company resolutions come in. They’re the official way shareholders (and sometimes directors) approve key decisions, and they’re also one of the first things investors, accountants, banks, and buyers ask to see when they’re checking whether your company’s paperwork is in good shape.

In this guide, we’ll break down the difference between an ordinary resolution vs special resolution in plain English, explain the voting thresholds, and walk through when your company needs each (plus the paperwork you should keep for your records).

What Is A Company Resolution (And Why Does It Matter)?

A company resolution is a formal decision made in line with the Companies Act 2006 and your company’s constitutional documents (mainly your articles of association).

In a typical UK private limited company:

• Shareholders pass resolutions to approve key ownership and constitutional decisions.
• Directors pass board resolutions for day-to-day management decisions (like signing contracts, appointing officers, approving budgets, etc.).

So why does it matter?

• Compliance: some actions are only valid if approved by the correct type of resolution.
• Evidence: resolutions create a paper trail showing the decision was properly made.
• Risk management: if a decision is challenged later (by a shareholder, buyer, or even during a dispute), properly recorded resolutions are your best friend.

It’s also worth remembering: even if you’re the only shareholder, you still need to document decisions properly. Having “one person control” doesn’t remove the legal formalities - it just makes voting simpler.

Decisions like these often sit alongside (and should match) your wider governance documents, such as your Company Constitution and any Shareholders Agreement you have in place.

Ordinary Resolution Vs Special Resolution: The Core Differences

Let’s get straight to the heart of the ordinary resolution vs special resolution comparison. The key differences are:

• Voting threshold: ordinary resolutions need a simple majority; special resolutions need a higher majority.
• What they’re used for: ordinary resolutions are for standard shareholder decisions; special resolutions are for bigger, structural, or constitutional changes.
• Filing requirements: some resolutions must be filed at Companies House (in particular, many special resolutions) depending on what they relate to.

What Is An Ordinary Resolution?

An ordinary resolution is usually passed when shareholders vote in favour by a simple majority (more than 50%).

In practical terms, if you have 100 voting shares, you’ll typically need at least 51 votes in favour.

Ordinary resolutions are generally used for decisions that are important but considered part of “normal” shareholder control.

If you’re documenting a shareholder decision for the first time and want to get the wording right, it can help to start with an Ordinary Resolution Template and tailor it to your company’s specific situation.

What Is A Special Resolution?

A special resolution is passed when shareholders vote in favour by a supermajority - usually at least 75% of the votes.

This higher threshold reflects that special resolutions are reserved for decisions that materially affect the company’s structure, shareholder rights, or constitution.

Because these decisions can have long-term consequences, the law effectively requires a stronger level of agreement before the company can proceed.

Quick Comparison Table

Feature	Ordinary Resolution	Special Resolution
Typical voting requirement	> 50% (simple majority)	≥ 75% (supermajority)
Used for	Standard shareholder decisions	Constitutional/structural decisions
Often filed at Companies House?	Sometimes (depends on the decision)	Sometimes (commonly required for certain changes)

One important note: your company’s articles of association can add extra requirements (for example, a higher threshold for certain actions, or separate class votes if you have different share classes). So the “default” rules aren’t always the whole story.

When Does A Company Need An Ordinary Resolution?

Ordinary resolutions are commonly used when shareholders need to approve a decision that’s important, but not so fundamental that it changes the company’s constitution or core structure.

Exact requirements depend on your company’s circumstances and documents, but common examples include:

1) Appointing Or Removing A Director

Shareholders can usually appoint or remove directors by ordinary resolution (subject to legal procedure and your articles). This is a big one for small businesses, especially where founders fall out or where investors want board representation.

2) Approving Certain Share Issues Or Allotments (Sometimes)

When the company issues new shares, shareholders may need to authorise directors to allot shares (unless the articles already allow it). Whether this needs an ordinary or special resolution can depend on how your company is set up and whether there are pre-emption rights involved.

If you’re raising investment, your Shareholders Agreement and articles should line up with the resolution mechanics - otherwise you can end up with messy (and risky) inconsistencies between what people think was agreed and what the company is legally allowed to do.

3) Approving Accounts Or Routine Shareholder Matters

Some companies use ordinary resolutions to deal with routine shareholder matters at general meetings, where their articles require shareholder approval (for example, for certain permissions or appointments).

4) Other Decisions Your Articles Require Shareholder Approval For

Some companies build extra shareholder “control points” into their articles - for example, requiring shareholder approval for borrowing above a threshold or selling major assets. Where that’s the case, the required resolution type will be specified in the articles.

If you’re not sure what your articles say (or if they’re an off-the-shelf version you’ve never revisited), reviewing your Company Constitution can save you headaches later - especially as you grow or bring on new shareholders.

When Does A Company Need A Special Resolution?

Special resolutions are generally required when shareholders are being asked to approve a decision that affects the company’s foundations - the rules it runs by, the capital structure, or shareholder rights.

Here are some common situations where a special resolution is typically required in the UK.

1) Changing The Articles Of Association

Changing your articles is one of the classic examples of when you need a special resolution. This could include:

• Changing share transfer rules
• Adding or changing drag-along/tag-along rights
• Creating or altering different share classes
• Changing meeting and voting mechanics

Because articles function as the company’s internal rulebook, the law requires a higher level of shareholder agreement before you can change them.

2) Changing The Company Name

Want to rebrand? A company name change usually requires a special resolution. It’s a simple admin step on the surface, but it’s still a significant corporate change, so the higher threshold applies.

3) Reducing Share Capital

Share capital reductions are technical and can affect creditor protection and shareholder interests. They often require a special resolution and additional legal steps.

This is a good example of where “doing the paperwork properly” really matters - because if the process is wrong, the reduction may be invalid, and that can cause issues later (especially in funding rounds or a sale).

4) Disapplying Pre-Emption Rights (Common In Fundraising)

When a company issues new shares, shareholders may have statutory or contractual pre-emption rights (meaning existing shareholders get first refusal to buy new shares to maintain their percentage ownership).

In some situations - especially when you’re bringing in a new investor quickly - the company may want to disapply those rights. That’s often done via special resolution, but the correct approach depends on your articles and the Companies Act rules.

5) Other “Reserved Matters” In Your Documents

If you have investors, you may have a list of decisions that require enhanced shareholder approval. These might appear in:

• your articles
• your shareholders agreement
• investment documents

Some businesses also tie this into meeting mechanics like AGMs and EGMs. If you’re trying to work out when you should formally call shareholder meetings, understanding the AGM Rules and the process for calling a shareholder meeting can help you stay organised and compliant.

How Do You Properly Pass (And Record) These Resolutions?

Once you know whether you need an ordinary or special resolution, the next issue is making sure it’s actually valid.

Most small companies pass resolutions in one of two ways:

• Written resolution: shareholders sign a written document approving the decision.
• General meeting: shareholders vote at a properly called meeting (often an AGM or EGM).

Written Resolutions (Common For Small Businesses)

Written resolutions are popular because they’re practical - especially where shareholders are busy, remote, or where there’s a small number of shareholders.

However, they still need to be done correctly. You’ll want to check:

• who is entitled to vote (and whether there are different share classes)
• the correct threshold (ordinary vs special)
• the wording of the resolution
• how signatures will be collected and stored

If you’re also signing contracts or deeds as part of the same transaction (for example, a shareholder agreement, share subscription documents, or a deed of variation), the execution mechanics matter too. It’s worth understanding the basics of Executing Contracts so documents don’t get challenged later on technicalities.

General Meetings (When You Need A Formal Vote)

If you’re holding a general meeting, you’ll need to make sure you follow the notice rules and any requirements in the articles (for example, quorum, proxy voting, and chairperson rules).

From a practical standpoint, the company should also keep clean and complete meeting records. Your minutes should clearly show:

• the date and time of the meeting
• who attended (and whether quorum was met)
• what was proposed
• how the vote was conducted and the outcome

Even in a small company, keeping consistent records is a smart discipline - and it helps if you’re ever doing due diligence. Having properly prepared Meeting Minutes can make a real difference when you’re dealing with banks, investors, or a buyer.

Do You Need To File Resolutions With Companies House?

Not every resolution must be filed, and the filing requirement depends on what the resolution actually does.

In general:

• Special resolutions: many (but not all) must be filed, particularly where they relate to changes to the articles or the company name.
• Ordinary resolutions: some must be filed too, depending on the subject matter.

Filing (or not filing) can affect whether the change is legally effective. It can also cause problems down the track - especially if you’re preparing for fundraising or a sale - so it’s worth checking the specific Companies Act/Companies House requirement for the particular resolution you’re passing.

Key Takeaways

• An ordinary resolution is usually passed by a simple majority (> 50%) and is used for standard shareholder decisions.
• A special resolution is usually passed by a 75% majority and is used for major constitutional or structural changes (like changing articles or the company name).
• The “default” rules can be affected by your articles of association, share classes, and any shareholder arrangements - so always check your documents before acting.
• Even if you’re a single shareholder, properly documented resolutions protect you by creating a clear legal record of decisions.
• Resolutions should be properly recorded (written resolution or meeting) and supported with good corporate records like meeting minutes.
• Some resolutions must be filed with Companies House (including many special resolutions), and missing deadlines can cause avoidable legal and admin issues.

If you’d like help working out whether your decision needs an ordinary or special resolution - or you want your company documents set up properly from day one - you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.