Ordinary resolution
Encyclopedia
In business or commercial law in certain common law
jurisdictions, an ordinary resolution is a resolution
passed by the shareholders of a company by a simple or bare majority
(for example more than 50% of the vote) either at a convened meeting of shareholders or by circulating a resolution for signature. A special resolution by comparison requires a greater vote threshold, which varies in different jurisdictions.
An ordinary resolution is the most common method by which a corporate entity conducts its business or the Board of directors
seeks shareholder approval of its actions.
The prevailing legislation
applying to companies in the relevant jurisdiction will usually prescribe certain activities which must be approved by special resolution or alternatively which cannot be approved by ordinary resolution (for example altering the company's constitutional documents, reducing the share capital
or dissolving the company). In addition, in certain circumstances a company may wish to amend its constitution to increase the threshold to provide that a special resolution needs to be passed prior to the company engaging in other matters which may ordinarily approved by simple majority, purely as a matter of internal organisational control.
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
jurisdictions, an ordinary resolution is a resolution
Resolution (law)
A resolution is a written motion adopted by a deliberative body. The substance of the resolution can be anything that can normally be proposed as a motion. For long or important motions, though, it is often better to have them written out so that discussion is easier or so that it can be...
passed by the shareholders of a company by a simple or bare majority
Majority
A majority is a subset of a group consisting of more than half of its members. This can be compared to a plurality, which is a subset larger than any other subset; i.e. a plurality is not necessarily a majority as the largest subset may consist of less than half the group's population...
(for example more than 50% of the vote) either at a convened meeting of shareholders or by circulating a resolution for signature. A special resolution by comparison requires a greater vote threshold, which varies in different jurisdictions.
An ordinary resolution is the most common method by which a corporate entity conducts its business or the Board of directors
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
seeks shareholder approval of its actions.
The prevailing legislation
Legislation
Legislation is law which has been promulgated by a legislature or other governing body, or the process of making it...
applying to companies in the relevant jurisdiction will usually prescribe certain activities which must be approved by special resolution or alternatively which cannot be approved by ordinary resolution (for example altering the company's constitutional documents, reducing the share capital
Share capital
Share capital or issued capital or capital stock refers to the portion of a company's equity that has been obtained by trading stock to a shareholder for cash or an equivalent item of capital value...
or dissolving the company). In addition, in certain circumstances a company may wish to amend its constitution to increase the threshold to provide that a special resolution needs to be passed prior to the company engaging in other matters which may ordinarily approved by simple majority, purely as a matter of internal organisational control.