Difference Between Ordinary Resolution and Special Resolution

An ordinary resolution is refers to a resolution, passed by the members of the company by a bare majority. A special resolution, on the other hand, is the resolution, that is affirmed by the members of the company by three-fourth majority.

In a company, the items of business to be transacted at a GM (General Meeting), are presented as motions. The ‘motion’ refers to a proposal put forward, for discussion and adoption at the meeting. If the motion is approved unanimously, by the members present at the meeting, it is called as a resolution. There are two types of resolution, which is needed to be passed in different situations, they are Ordinary Resolution and Special Resolution.

So, let’s discuss the differences between ordinary resolution and special resolution.

Content: Ordinary Resolution Vs Special Resolution

1. Comparison Chart
2. Definition
3. Key Differences
4. Conclusion

Comparison Chart

Basis for Comparison	Ordinary Resolution	Special Resolution
Meaning	When at the general meeting, simple majority is required to move the resolution, it is called as Ordinary Resolution.	When at the general meeting, super majority is required to pass the resolution, it is known as Special Resolution.
Consent of members	At least 51% members should be in favor of the motion.	At least 75% members should be in favor of the motion.
Registration with ROC	A copy of OR should be filed with ROC, in certain cases.	A copy of SR must be filed with ROC.
Business transacted	Ordinary business or special business, depending on requirements of the Act.	Special business.

Definition of Ordinary Resolution

Ordinary resolution means a resolution in which the votes cast in favour of resolution exceeds the votes cast against it. The resolution affirmed by more than half members, present in person or proxy at the General Meeting. It should be passed by votes cast, by any of the following modes, i.e. show of hands, polling or electronically, in favour of the resolution.

The notice convening the meeting shall be duly given to the members. In addition to this, the members who don’t participate in voting are not taken into consideration. In general, the ordinary resolution must be passed to transact the ordinary business at AGM (Annual General Meeting). Ordinary Business includes the following business:

• Adoption of final accounts.
• Declaration of the dividend.
• Retirement and appointment of Directors.
• Retirement and appointment of Auditors and fixing their remuneration.

Definition of Special Resolution

Special Resolution (SR) is a resolution in which the votes cast in favour of the resolution must be three times higher than the votes cast against it. There are certain things, which can be done by the company only if a special resolution is affirmed at the duly constituted general meeting. The notice of the general meeting should be duly given to the members, and the notice should contain the intention to purpose the resolution as SR to be mentioned specifically.

The resolution is required to be passed by any methods, such as voting on a show of hands or polling or electronically by the members present in person or proxy or postal ballot.

Conclusion

In a company, meetings are held to arrive at decisions, by voting upon formal proposals put to the meeting. Resolutions are nothing but the company’s expression of will. Ordinary Resolution is sufficient to transact the business, apart from the ordinary business are Change of company’s name, at the direction of ROC, when the name registered previously is incorrect or wrong or Rectification of company’s name as directed by Central Government, remuneration of cost accountant.

Matters which require Special Resolution are the issue of sweat equity shares, alteration in the provisions of the memorandum of association, alteration of articles of association, buy back of shares or securities, variation in the objects of the prospectus, shifting of registered office of the company and so on.