Company decisions are made by passing resolutions. Resolutions are passed both by the company's members and by its directors. In either case, resolutions may be passed at meetings or by written resolution.
Members resolutions
Directors' resolutions
Members' resolutions
There are now just two types of resolution, ordinary resolutions (passed by a simple majority) and special resolutions (passed by a 75% majority). Two types of resolution (extraordinary and elective) required in certain circumstances by the 1985 Act have now been abolished, though a company's articles may still refer to these.
The Companies Act 2006 provides:
Sec282 Ordinary resolutions
(1) An ordinary resolution of the members (or of a class of members) of a company means a resolution that is passed by a simple majority.
(2) A written resolution is passed by a simple majority if it is passed by members representing a simple majority of the total voting rights of eligible members.
(3) A resolution passed at a meeting on a show of hands is passed by a simple majority if it is passed by a simple majority of-
(a) the members who, being entitled to do so, vote in person on the resolution, and
(b) the persons who vote on the resolution as duly appointed proxies of members entitled to vote on it.
(4) A resolution passed on a poll taken at a meeting is passed by a simple majority if it is passed by members representing a simple majority of the total voting rights of members who (being entitled to do so) vote in person or by proxy on the resolution.
(5) Anything that may be done by ordinary resolution may also be done by special resolution.
283 Special resolutions
(1) A special resolution of the members (or of a class of members) of a company means a resolution passed by a majority of not less than 75%.
(2) A written resolution is passed by a majority of not less than 75% if it is passed by members representing not less than 75% of the total voting rights of eligible members.
(3) Where a resolution of a private company is passed as a written resolution-
(a) the resolution is not a special resolution unless it stated that it was proposed as a special resolution, and
(b) if the resolution so stated, it may only be passed as a special resolution.
(4) A resolution passed at a meeting on a show of hands is passed by a majority of not less than 75% if it is passed by not less than 75% of-
(a) the members who, being entitled to do so, vote in person on the resolution, and
(b) the persons who vote on the resolution as duly appointed proxies of members entitled to vote on it.
(5) A resolution passed on a poll taken at a meeting is passed by a majority of not less than 75% if it is passed by members representing not less than 75% of the total voting rights of the members who (being entitled to do so) vote in person or by proxy on the resolution.
(6) Where a resolution is passed at a meeting-
(a) the resolution is not a special resolution unless the notice of the meeting included the text of the resolution and specified the intention to propose the resolution as a special resolution, and
(b) if the notice of the meeting so specified, the resolution may only be passed as a special resolution.
Directors' resolutions
At board meetings there are no different types of resolution (unless, very exceptionally, the company's articles specify to the contrary). All resolutions are passed by a simple majority.
There are no statutory provisions so any rules must be found in the company's articles.
Model Articles provisions
DECISION-MAKING BY DIRECTORS
Directors to take decisions collectively
7. (1) The general rule about decision-making by directors is that any decision of the directors must be either a majority decision at a meeting or a decision taken in accordance with article 8.
(2) If-
(a) the company only has one director, and
(b) no provision of the articles requires it to have more than one director,
the general rule does not apply, and the director may take decisions without regard to any of the provisions of the articles relating to directors' decision-making.
Unanimous decisions
8. (1) A decision of the directors is taken in accordance with this article when all eligible directors indicate to each other by any means that they share a common view on a matter.
(2) Such a decision may take the form of a resolution in writing, copies of which have been signed by each eligible director or to which each eligible director has otherwise indicated agreement in writing.
(3) References in this article to eligible directors are to directors who would have been entitled to vote on the matter had it been proposed as a resolution at a directors' meeting.
(4) A decision may not be taken in accordance with this article if the eligible directors would not have formed a quorum at such a meeting.
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