Types of Resolution Explained: Understanding Corporate Resolutions for Your Business

Starting or running a business in the UK means making important decisions - some big, some small. But when those decisions affect the whole company, especially if you have co-founders, directors or shareholders, you’ll often need a formal process for agreeing and recording what’s been decided. That’s where corporate resolutions come in.

If you’ve ever wondered what “types of resolution” mean when it comes to company law, you’re definitely not alone. Whether you’re just setting up or you’re already running a company, knowing how resolutions work (and the different kinds) is crucial for staying compliant and making sure your decisions stick.

In this guide, we’ll break down what resolutions are, why they matter, the main types of corporate resolutions used by UK businesses, and how to get yours right from day one. Don’t stress - with the basics sorted, you’ll be empowered to run your company smoothly and avoid any compliance headaches down the road.

What Is a Resolution in a Business Context?

A “resolution” is simply an official decision made by the members (shareholders) or directors of a company. It’s a formal way to record big decisions that go beyond day-to-day management - for example, changing your company name, adopting new articles, or approving dividends.

Resolutions are usually passed at meetings (either of shareholders or directors), or sometimes in writing. Once passed, these decisions become binding on the company.

It’s not just about ticking a box for Companies House - properly passed and recorded resolutions provide proof that your company’s major decisions were made in line with the law and your own rules. This protects everyone involved, especially if disputes crop up in future.

But there’s more than one kind of resolution: different decisions require different voting thresholds and procedures. Let’s break down the main types of resolution you’ll encounter as a UK business owner.

What Are the Main Types of Resolution for UK Companies?

In the UK, company decisions are usually made via two broad categories: director resolutions and shareholder resolutions. Within shareholder resolutions, there are further distinctions, and you’ll often hear about “ordinary” and “special” resolutions. Here’s what you need to know.

Director Resolutions

Director resolutions are decisions made by your company’s board of directors, either at a board meeting or by written resolution. These typically cover day-to-day business management unless the company’s rules or UK company law require a decision to go to the shareholders.

• Examples: Appointing officers, approving contracts, opening bank accounts
• Decision making: Standard board votes (often a simple majority)

Director resolutions must be properly minuted and stored with your company records. Find more guidance in our Board Resolutions: When & How To Record Critical Decisions.

Ordinary Resolutions (Shareholder Resolutions)

An ordinary resolution is the most common type for shareholder decisions. Unless the Companies Act 2006, your company’s Articles of Association, or another law says otherwise, ordinary resolutions are used for all general matters.

• What it covers: Approving annual accounts, appointing directors, declaring dividends, or authorising an allotment of shares
• Voting threshold: Passed by a simple majority (over 50%) of votes cast by shareholders entitled to vote

Ordinary resolutions can usually be passed at a general meeting (in person or virtual), or as a written resolution signed by the required majority of shareholders. Learn more about shareholder rights and approvals in our explainer on shareholder rights.

Special Resolutions (Shareholder Resolutions)

A special resolution is required for more significant changes to the company structure or constitution. This includes any decision that fundamentally changes your company’s direction or obligations.

• What it covers: Changing the company name, altering the Articles of Association, reducing share capital, winding up (liquidating) the company, or approving certain transactions
• Voting threshold: Requires at least 75% of votes cast by shareholders entitled to vote (a ‘supermajority’)
• Notice: Typically, at least 14 days’ notice must be given before the meeting where a special resolution is to be considered (longer for some actions, like changes to Articles)

After a special resolution is passed, it usually needs to be filed with Companies House, often within 15 days. Get a full practical guide in our article Special Resolutions: Decisions That Need 75% Approval.

Written Resolutions

Resolutions don’t always require a physical meeting. In most cases, private limited companies can pass both ordinary and special resolutions by written resolution - this is simply a document signed by the necessary proportion of eligible members.

• Speeds up decision-making (no need to convene a formal meeting for every decision)
• Not available for certain matters, such as removing a director or auditor - those must be considered at a meeting
• Once signed by the correct majority, written resolutions have the same effect as those passed at a meeting

For more details on streamline options for managing agreements and corporate paperwork, check our page on e-signing business documents in the UK.

Other Types of Resolution

Depending on your company’s needs, you might also encounter:

• Unanimous Resolutions: All shareholders agree (sometimes required under your Articles or Shareholders Agreement for decisions affecting fundamental rights)
• Class Resolutions: Needed when a decision only affects a particular class of shares. For example, converting, varying, or reclassifying share rights
• Written Board Resolutions: Directors can also adopt decisions in writing, bypassing a meeting where allowed by the company’s constitutional documents

Before relying on any of these special procedures, always check your company’s specific Articles of Association and any Shareholders’ Agreement you have in place. These may set additional or alternative rules.

Why Do Resolutions Matter for Your Company?

Resolutions might feel like paperwork, but they’re actually a crucial part of your company’s legal safety net and smooth operation. Here’s why:

• Legal Compliance: The Companies Act 2006 and your own company documents often require certain decisions to be made and recorded via resolutions. Not doing this can lead to unenforceable actions, shareholder disputes, or even penalties from Companies House.
• Clarity & Accountability: Keeping clear records helps avoid confusion about what’s been decided - vital if disagreements crop up between directors or shareholders later.
• Proof for Third Parties: Some decisions (like changing the company name or authorising new shares) only take effect once the right resolution is properly passed and filed. Lenders, investors, or regulators may ask to see these as evidence.
• Protecting Decision Makers: Directors, in particular, are expected to act within their authority. Well-documented resolutions help prove decisions were made collectively and legally, reducing risk of personal liability.

Big or small, if a decision can impact the company, its stakeholders, or its legal obligations, make sure it’s covered by a valid, properly recorded resolution.

How Do You Pass and Record a Resolution Correctly?

The procedure for passing a resolution depends on the type of resolution and your company’s rules. In general:

1. Give Proper Notice: For meetings, shareholders must receive advance notice (usually at least 14 days, but check your Articles and the law).
2. Hold a Meeting (or Circulate a Written Resolution): The required decision is proposed, discussed, and put to a vote.
3. Achieve the Correct Voting Threshold: Ordinary (over 50%) or special (75%) - ensure the correct majority is met (calculated as a percentage of votes cast unless company documents specify otherwise).
4. Document the Decision: Minutes must be taken for meetings. Written resolutions must be signed and dated by the required number of shareholders. Keep these with your statutory company records.
5. File With Companies House: Some special resolutions and certain decisions must be filed with Companies House (e.g. changes to Articles, company name, share capital changes). This is usually due within 15 days.

If you’re not sure whether a specific change or action needs a resolution (or what type), get tailored advice from a company law expert. It’s also wise to use a dedicated service or template for recording and storing director or shareholder resolutions - generic templates can be risky if not adapted for your business.

If you’re keen to streamline your corporate paperwork, have a look at our Director’s Resolution Templates and related services for compliant, custom documentation.

Common Company Decisions That Require a Resolution

To give you a sense of what sort of matters require formal resolutions, here’s a quick summary:

• Issuing Shares: Usually by ordinary resolution (unless Articles require otherwise)
• Changing Company Name: Special resolution, file with Companies House
• Altering Articles of Association: Special resolution
• Reducing Share Capital: Special resolution plus court or solvency procedure
• Authorising Director’s Service Contracts Over Two Years: Ordinary or special, depending on company rules
• Winding Up or Liquidating the Company: Special resolution
• Approving Dividends: Ordinary resolution

Every company is different - always check both your Articles of Association and the Companies Act to confirm which procedure applies.

Need a deeper breakdown on your company’s critical documents and decision-making processes? Check out our guide to company constitutions and Articles of Association.

How Can You Make Sure Your Resolutions Are Legally Valid?

Even if your team or shareholders have agreed, a resolution may be challenged if:

• The right notice wasn’t given
• The votes weren’t correctly counted (e.g. not meeting the threshold for a special resolution)
• The procedure in your Articles or the Companies Act wasn’t followed
• There’s a conflict with an existing Shareholders’ Agreement

This is where getting your legal foundations right at the start really pays off. Using accurate templates, keeping your Articles up-to-date, and consulting an expert for complex changes helps ensure your company decisions can’t be easily disputed.

If you’re unsure whether your past or future resolutions are valid and compliant, Sprintlaw can review your documents and processes - get in touch for tailored help.

Key Takeaways

• There are different types of resolution for UK companies - ordinary and special resolutions are the main types for shareholders, while directors have separate board resolutions.
• Ordinary resolutions require a simple majority of votes; special resolutions need at least 75% approval. Written resolutions are a quick alternative to meetings.
• Some decisions must legally be made by special resolution and filed with Companies House - for example, changing the company name or altering Articles.
• Always check your Articles of Association and any Shareholders’ Agreement for extra rules or higher approval thresholds.
• Properly passed and recorded resolutions are essential for compliance, protecting company officers, and avoiding disputes or problems with banks, investors, or regulators.
• Legal compliance comes down to giving proper notice, following voting rules, and filing with Companies House where required - don’t risk DIY for vital company paperwork.

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If you have questions about the types of resolution your company needs, or want help making sure your company decisions are airtight and compliant, reach out to Sprintlaw’s expert team. You can contact us at team@sprintlaw.co.uk or call 08081347754 for a free, no-obligations chat about your business needs.