Types of Resolutions and Minutes of Meetings

Decisions at a general meeting are formally recorded as resolutions — the proposals put to the members for their vote. Section 114 of the Companies Act, 2013 recognises two principal types of resolution, and the choice between them depends on how significant the matter being decided is.

An Ordinary Resolution is passed by a simple majority — meaning the votes cast in favour of the resolution (by members entitled to vote, present in person or by proxy, or on a postal ballot) simply exceed the votes cast against it. Most routine business at an AGM — such as adopting the annual financial statements, declaring a dividend, or appointing an auditor — is transacted by ordinary resolution, reflecting that these are the everyday decisions a company makes each year.

A Special Resolution, by contrast, requires a much stronger show of support: the votes cast in favour must be at least three times the votes cast against — commonly expressed as a three-fourths (75%) majority of the votes cast. The Act reserves the special resolution for matters that materially change the company's fundamental structure or character — for example, altering the objects clause of the Memorandum of Association, altering the Articles of Association, changing the company's name, or reducing its share capital. Requiring such a large majority ensures that only decisions with truly broad shareholder support can bring about the most consequential changes to the company.