When can a special resolution be proposed by shareholders?

A special resolution is a particular type of resolution that requires a higher level of consent from shareholders than an ordinary resolution. Specifically, a special resolution typically needs approval from at least 75% of the shareholders who are voting, either in person or by proxy. This elevated threshold is intended to ensure that significant decisions—such as alterations to a company’s articles of association, changes in company structure, or other critical corporate actions—receive a strong mandate from the shareholders.

This requirement is fundamental to corporate governance, as it protects minority shareholders by necessitating substantial consensus for key decisions that may affect the direction of the company. The need for 75% consent differentiates a special resolution from other decision-making processes within a company, ensuring that all shareholders have a meaningful say in critical matters.

While special resolutions can be proposed in various contexts beyond just annual general meetings (AGMs), the primary criteria that govern their proposal is the requisite level of shareholder agreement. This makes the specified threshold of 75% consent the correct understanding regarding when a special resolution can be properly proposed by shareholders.