In today’s Friday read we will be discussing what Resolutions are.
A resolution is a proposal made and passed shareholders or directors.
The Companies Act 2019, (“Act 992”) provides us with three types of resolutions namely Special resolutions, Ordinary Resolutions and Written Resolutions. However, we will be focusing on Ordinary and Special Resolutions.
A Special resolution requires that 75% of the voting members present at the meeting agree on the decision being voted on. Act 992 provides that a special resolution is required in instances such as amending a company’s constitution, change of name of the company, increase or decrease in share capital, approval of large business transactions, amongst others.
An Ordinary resolution requires that a simple majority of the voting members present at the meeting agree to that matter being voted on. Act 992 sets out the instances where an ordinary resolution can be passed such as the removal of a director from office, , amongst others.
Both resolutions require that a meeting is held for decisions to be taken and voted on.
A resolution is important because it serves as a record of all decisions taken by the company.
Therefore, it is essential to ensure that the correct type of resolution is passed.