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Governance Authority
Category: Shareholder Rights and Meetings

Ordinary Resolution

Simply put

An ordinary resolution is a decision made by a company's members (shareholders) that passes when more than half of the votes cast are in favour. It is typically used for routine company matters and requires only a simple majority to succeed.

Formal definition

An ordinary resolution is a formal decision of a company's members passed by a simple (bare) majority of votes, generally meaning more than 50% of votes cast by members entitled to vote and voting. It is commonly used for routine corporate matters, and voting may occur by a show of hands or by poll, subject to members' entitlement to vote. The specific threshold, procedural requirements, and the matters for which an ordinary resolution is sufficient (as opposed to a special resolution) depend on the applicable jurisdiction, statute, and the company's constitution. This entry is educational and not legal advice.

Why it matters

The ordinary resolution is the everyday instrument through which a company's members exercise their collective authority, making it a foundational mechanism in corporate governance. Because it passes on a simple majority of votes cast, it enables companies to conduct routine business efficiently without the higher hurdle reserved for more consequential decisions. Understanding when an ordinary resolution is sufficient, as opposed to when a special resolution or other elevated threshold is required, is essential to ensuring that corporate decisions are validly made and legally effective.

The distinction matters because a decision taken by the wrong type of resolution, or without meeting the applicable threshold or procedural requirements, may be challenged or rendered ineffective. The matters for which an ordinary resolution is sufficient, the precise majority required, and the procedural steps involved depend on the applicable jurisdiction, governing statute, and the company's own constitution. Governance professionals and company secretaries therefore need to verify the correct resolution type for each proposed action rather than assuming a simple majority always suffices.

Ordinary resolutions also reflect the allocation of decision-making authority between members and management. While routine operational decisions typically sit with management or the board, certain matters are reserved to the members and are exercised through resolutions. Getting this allocation and the associated voting mechanics right supports the integrity of the corporate decision-making process. This entry is educational and not legal advice; the specific requirements should be confirmed against the relevant law and constitution.

Who it's relevant to

Company Secretaries and Governance Professionals
Those responsible for convening meetings and documenting decisions must identify the correct resolution type for each matter, confirm members' entitlement to vote, and ensure the appropriate voting method, show of hands or poll, and majority threshold are applied so that resolutions are validly passed.
Boards and Directors
Directors need to understand which decisions are reserved to members and must be put to them by ordinary resolution, versus those the board or management may take, to ensure proposals brought to shareholders follow the correct process under the applicable law and the company's constitution.
Shareholders and Their Advisers
Members entitled to vote, and those advising them, rely on the ordinary resolution mechanism to exercise collective authority over routine company matters. Understanding the simple-majority threshold helps them assess the likelihood and effect of a proposed resolution passing.
General Counsel and Legal Advisers
Legal advisers assess whether a proposed action can proceed by ordinary resolution or requires a higher threshold, verifying the applicable jurisdiction, statute, and constitutional provisions, since using the wrong resolution type or failing to meet procedural requirements can undermine the validity of a decision.

Inside Ordinary Resolution

Simple Majority Threshold
An ordinary resolution typically requires approval by a simple majority (more than 50%) of the votes cast by members entitled to vote and voting, whether in person or by proxy. The exact counting method and quorum requirements depend on the entity's constitution and applicable companies legislation in the relevant jurisdiction.
Scope of Matters
Ordinary resolutions are generally used for routine or day-to-day corporate decisions that legislation or the constitution does not reserve for a higher voting threshold. Common examples in many jurisdictions include appointing or removing directors, appointing auditors, and adopting accounts, though the precise list varies by jurisdiction and entity type.
Distinction from Special Resolution
An ordinary resolution sits below a special (or extraordinary) resolution, which typically requires a higher supermajority (for example, 75% in some jurisdictions) and is reserved for more fundamental matters such as amending the constitution. Whether a matter requires an ordinary or a higher-threshold resolution is determined by statute and the governing documents.
Notice and Procedural Requirements
Passing an ordinary resolution generally requires that members receive proper notice of the meeting and the proposed business, that a quorum is present, and that voting is conducted in accordance with the constitution and applicable law. Some jurisdictions also permit written resolutions in lieu of a meeting, subject to conditions.
Record and Filing Obligations
Once passed, resolutions are typically recorded in the minutes, and certain resolutions may need to be filed with a companies registry depending on jurisdiction and subject matter. Requirements differ by jurisdiction and entity type.

Common questions

Answers to the questions practitioners most commonly ask about Ordinary Resolution.

Does an ordinary resolution require unanimous or near-unanimous shareholder support to pass?
No. An ordinary resolution generally passes on a simple majority of votes cast by those entitled to vote and voting, meaning more than 50 percent. This is distinct from a special resolution, which typically requires a higher threshold (commonly a supermajority such as 75 percent under certain regimes). Unanimity is not required for an ordinary resolution and is rarely required for corporate decision-making generally. The precise threshold, quorum requirements, and how abstentions or non-votes are treated depend on the applicable companies legislation, listing rules, and the entity's constitutional documents, which vary by jurisdiction and entity type.
Can any company decision be taken by ordinary resolution, or are some matters reserved for higher thresholds?
Not every matter can be decided by ordinary resolution. In many jurisdictions, certain fundamental or constitutional changes, such as altering the articles or constitution, reducing capital, or approving certain transactions, are reserved for a special resolution or another prescribed procedure. Whether a specific decision requires an ordinary resolution, a special resolution, or a different mechanism depends on the governing statute, the entity's constitution, and any applicable listing rules. Boards and their advisers should confirm the required threshold for each matter rather than assuming an ordinary resolution suffices. This entry is educational and not legal advice.
Who is responsible for determining that the correct resolution type has been used for a given decision?
Determining the correct resolution type is generally a matter for the company's directors and management, typically supported by the company secretary or legal counsel, who assess the requirements of the applicable law and the entity's constitution. The board is generally accountable for ensuring proper governance processes are followed, while the operational task of preparing and characterising resolutions often sits with the company secretariat or legal function. Where uncertainty exists, professional legal advice is commonly sought, because using the wrong threshold can affect the validity of a decision. The allocation of these responsibilities varies by jurisdiction and entity type.
How should the outcome of an ordinary resolution be recorded and evidenced?
Ordinary resolutions are generally recorded in the minutes of the relevant meeting, with the wording of the resolution, the outcome, and, where applicable, the voting results retained as part of the company's records. Many jurisdictions and constitutions impose specific record-keeping obligations, and certain resolutions may need to be filed with a corporate registry or disclosed to a market where listing rules apply. The exact documentation, retention, and filing requirements depend on the governing law and the entity's constitution, so companies typically rely on their company secretary or legal adviser to confirm what is required in their circumstances.
Can an ordinary resolution be passed without holding a meeting?
In some jurisdictions and for some entity types, an ordinary resolution may be passed by a written resolution or written consent procedure rather than at a convened meeting, provided the applicable statutory and constitutional conditions are met, for example, the required proportion of members signing or agreeing. However, the availability of written resolutions, the applicable threshold, and any excluded matters vary by jurisdiction, entity type, and constitution. Some regimes restrict written procedures for public or listed companies. Confirm the specific rules that apply before proceeding, as this entry is educational and not legal advice.
How does quorum affect the validity of an ordinary resolution?
Even where a simple majority of votes cast is achieved, an ordinary resolution is generally only valid if the meeting had a quorum, the minimum number or proportion of members required to be present or represented. Quorum requirements are typically set by the applicable law and the entity's constitution and may differ by meeting type. A resolution passed without a valid quorum may be open to challenge. Companies should verify quorum before proceeding and ensure attendance and proxy or representation arrangements are properly recorded. The specific quorum rules and their consequences depend on the governing framework and constitutional documents.

Common misconceptions

An ordinary resolution can be used to approve any corporate matter as long as a majority agrees.
Certain matters are reserved by statute or the constitution for a higher threshold (such as a special resolution) or for board rather than member decision. Using an ordinary resolution for a matter that legally requires a higher threshold generally renders the decision ineffective. The correct instrument depends on the subject matter, jurisdiction, and governing documents.
A simple majority means a majority of all members or all shares in issue.
In many jurisdictions the threshold is a majority of the votes actually cast by members entitled to vote and voting, not a majority of the entire membership or total share capital. The precise basis for counting depends on applicable law and the constitution, and quorum rules apply separately.
Ordinary resolutions are decisions made by the board of directors.
An ordinary resolution is generally a decision of the members (shareholders) in general meeting or by written resolution, not a board decision. Board decisions are typically taken as board resolutions under separate procedures. Conflating the two blurs the distinction between member authority and management authority.

Best practices

Confirm before each meeting whether the proposed matter can be validly passed by ordinary resolution or requires a higher threshold, by checking the applicable companies legislation and the entity's constitution rather than assuming a default.
Ensure notice, quorum, and voting procedures meet both statutory and constitutional requirements, since a procedural defect can undermine an otherwise valid resolution.
Draft resolution wording clearly and unambiguously so that the matter approved matches exactly what members are voting on and what any subsequent filing will reflect.
Record the outcome accurately in the minutes, including the votes cast and the majority achieved, and verify whether the resolution must be filed with the relevant registry.
Where written resolutions are permitted, confirm the specific conditions and consent thresholds that apply in the jurisdiction before proceeding without a meeting.
Seek qualified legal advice where there is doubt about the correct resolution type, threshold, or procedural requirements, as these depend on jurisdiction, entity type, and specific facts.