When you’re running a small business or building a startup, the legal admin can feel like it’s constantly trying to keep up with your growth. One week you’re onboarding a new investor, the next you’re changing your company name, updating your constitution, or approving a major transaction.
That’s where company resolutions come in. And in particular, special resolutions are the “big ticket” decisions that Australian companies typically can’t make casually - they need a higher level of shareholder approval and a properly documented paper trail.
In this guide, we’ll walk you through what a special resolution is, when you need one, what to include in a special resolution template for Australia, and how to get it signed and stored correctly. We’ll keep it practical, clear, and focused on what matters to business owners.
Tip: If you’re moving quickly (common for startups), a properly prepared special resolution can be the difference between “we agreed on it” and “we can prove it.” That proof matters for banks, investors, auditors, regulators, and sometimes even future buyers of your business.
What Is A Special Resolution In Australia?
A special resolution is a type of shareholder decision that requires a higher threshold of approval than an ordinary resolution.
For most Australian companies, a special resolution generally requires at least 75% of the votes cast by shareholders entitled to vote on the resolution (there are nuances depending on your constitution, the type of company, and how the resolution is passed).
Put simply: a special resolution is used for decisions that significantly affect the company’s structure, rights, or governance. Because these decisions can have long-term consequences, the law (and often your constitution) requires a stronger level of shareholder consent.
Special Resolution Vs Ordinary Resolution
If you’re unsure whether your decision needs an ordinary or special resolution, the easiest way to think about it is:
- Ordinary resolutions are for routine company decisions.
- Special resolutions are for major changes that impact the company’s foundations or shareholder rights.
It’s common for founders to start with an ordinary resolution out of habit - but if the decision actually requires a special resolution, you may end up with an approval that’s not valid (or at least not as defensible as you’d want it to be).
If you want a clearer breakdown, the distinction is explained in more detail in ordinary vs special resolutions.
Do Small Businesses And Startups Really Need Special Resolutions?
Yes - and often more than you expect.
Even if your company is small, you might still need special resolutions when you:
- bring on investors
- restructure your cap table
- change governance settings to prepare for growth
- make changes that affect shareholder rights
Startups in particular tend to move fast, which is exactly why having a reliable special resolution template (Australia) process can save you time and stress later.
When Do You Need A Special Resolution?
The exact situations depend on the Corporations Act 2001 (Cth), your company’s constitution (if you have one), and any shareholder arrangements you’ve put in place. But there are several common “special resolution moments” we see for small businesses and startups.
Common Scenarios That Trigger A Special Resolution
- Changing the company name (often requires formal shareholder approval).
- Amending or adopting a constitution (for example, adding founder-friendly rules or preparing for an investment round).
- Changing share rights (for example, creating a new class of shares or changing rights attached to existing shares - this can also trigger separate “class rights” procedures and class resolutions, depending on how the rights are affected).
- Selective share buy-backs or other structural changes (depending on the circumstances).
- Winding up the company (in some contexts).
For many companies, constitutions are central to special resolutions. If your company is operating with one, changes usually need shareholder approval at the special resolution threshold. If you’re considering updating yours (or putting one in place), a tailored Company Constitution is often part of that conversation.
What If Your Company Only Has One Shareholder?
If you’re a sole director and the only shareholder, you can usually still pass a special resolution - the process is simply more streamlined because there’s only one person to sign. The key is still documenting it correctly, and keeping it with your company records.
Even for solo founders, having the paperwork clean and consistent becomes critical once you raise capital, apply for finance, sell the business, or bring in co-founders.
What About Share Transfers Or Issuing Shares?
Not every share issue or transfer automatically requires a special resolution. Sometimes it’s handled via director resolutions, shareholder approvals under a Shareholders Agreement, or processes set out in your constitution.
But special resolutions commonly come up around equity changes where there are:
- changes to share class rights (which may require a separate class resolution process)
- constitutional amendments to accommodate the change
- approvals required under investor terms
If you’re dealing with family transfers, internal restructures, or tidying up your cap table, transferring shares can have legal and tax flow-on issues - so it’s worth checking what approvals and documents you need before you update anything with ASIC. (Sprintlaw can help with the legal process, but we don’t provide tax advice - you should speak with an accountant or tax adviser about any tax implications.)
How To Use A Special Resolution Template Australia (Step-By-Step)
A template is only useful if you understand how to apply it properly. Here’s a practical workflow you can follow to prepare and pass a special resolution in Australia.
1) Confirm The Decision Actually Requires A Special Resolution
Start by checking:
- your constitution (if you have one)
- any Shareholders Agreement or investor documents
- the requirements under the Corporations Act
It’s very common for businesses to have both a constitution and a Shareholders Agreement, and those documents may impose approval rules that go beyond the minimum legal threshold.
Special resolutions can usually be passed either:
- at a general meeting (with notice requirements and voting); or
- as a circulating resolution (signed by shareholders without holding a meeting), if your company is eligible to do so.
For many small companies, circulating resolutions are the most practical option - especially if shareholders are in different locations, or you need to move quickly. However, it’s important to check the rules that apply to your company: for many proprietary companies, a written (circulating) special resolution may need to be signed by all shareholders entitled to vote (rather than being approved by 75% of votes cast at a meeting). Your constitution and any shareholder arrangements may also add extra requirements.
3) Draft The Resolution With Clear, Specific Wording
Your special resolution should be written so that an independent person (like an investor, auditor, buyer, or regulator) can read it and understand exactly what was approved.
Vague wording is one of the biggest issues we see in DIY minutes and templates. If you’re using a special resolution template for Australia, make sure you still tailor it to the actual decision.
4) Obtain The Correct Signatures And Store It Properly
Once drafted, you’ll need to ensure it’s signed and kept with the company’s records (often with the minutes book or corporate register documents). Depending on the decision, you may also need to lodge updates with ASIC.
If your resolution is part of a broader transaction (like changing your constitution and issuing shares), you’ll also want to ensure your execution process is consistent with how the company signs documents. For companies, this often involves signing rules under section 127 of the Corporations Act.
What Should A Special Resolution Template Include?
While each business is different, a good special resolution template for Australia usually includes the same core building blocks. Here’s what you generally want to see.
1) Company Details
- company name
- ACN
- registered office address (optional but common)
2) Resolution Type And Wording
Be explicit that it is a special resolution. This seems obvious, but it’s a simple drafting point that can prevent confusion later.
The wording should also clearly state what the shareholders resolve to do. For example:
- “That the Company adopt the constitution attached to this resolution with effect from .”
- “That clause of the Company’s constitution be amended by replacing it with the following…”
3) Date And Effective Time
Include:
- the date the resolution is passed; and
- the date it takes effect (sometimes these are the same, sometimes not).
This matters because your company might approve something on one date, but have it become effective only once another step happens (for example, once ASIC processes a lodgement, or once a transaction completes).
4) Voting Threshold / Confirmation Of Approval
For meeting-based resolutions, you’ll usually record:
- that the special resolution was passed; and
- the voting outcome (for example, percentages or number of votes for/against).
For circulating resolutions, you’ll generally capture signatures and confirm it has met the threshold required by law and your governing documents. (In many cases, that may mean getting all eligible shareholders to sign.)
5) Attachments (If Needed)
If the resolution approves a document, attach it. Common examples include:
- the new or amended constitution
- a schedule of amended clauses
- transaction documents (only where appropriate and intended to be part of the company record)
Attaching the approved document makes your corporate record much stronger - and makes due diligence faster if you ever raise funds or sell the business.
6) Signatures
Depending on the process used, the resolution will be signed by shareholders (or their authorised representatives). If you’re dealing with investor entities, trusts, or corporate shareholders, signing blocks and authority become important.
If you need a separate decision at director level (for example, to implement the shareholders’ decision), you may also need a director resolution. In many situations, a Directors Resolution Template is used alongside the special resolution so the paperwork matches what actually happened in practice.
Common Mistakes To Avoid With Special Resolutions
A special resolution can look simple on paper - but small mistakes can create big headaches later. Here are issues we regularly see for small businesses and startups.
Using The Wrong Type Of Resolution
If the law or your constitution requires a special resolution and you only pass an ordinary resolution, you can end up with a decision that’s open to challenge. That’s especially risky where:
- shareholder rights are impacted
- investors or lenders rely on the decision
- ASIC lodgements are based on that decision
Not Checking The Constitution Or Shareholders Agreement First
Your company’s internal documents can impose stricter rules than the baseline law. For example, you might legally be able to pass a special resolution with 75% of votes cast at a meeting, but your Shareholders Agreement may require additional approvals (like a particular shareholder’s consent), or require a different process for written resolutions.
Vague Drafting That Doesn’t Match What You Actually Did
If your resolution says you approved “changes to the constitution” but doesn’t specify what changes, that can create uncertainty later - and uncertainty is exactly what investors and buyers don’t want.
Forgetting The Follow-Up Steps (Especially ASIC)
Some special resolutions lead to actions you must take afterward, such as:
- lodging updated details with ASIC
- updating the company’s registers
- issuing new share certificates or updating cap table records
If the special resolution ties into a larger governance update, make sure you align it with your other company documents (constitution, shareholder arrangements, and execution method).
Not Keeping Proper Company Records
Your corporate records are part of your business asset. They help demonstrate that your company is well-governed, which can matter when you:
- raise capital
- apply for finance
- deal with disputes between founders/shareholders
- sell your business
A properly completed special resolution template (Australia) document is not just “paperwork” - it’s proof that your company made decisions properly.
Key Takeaways
- A special resolution is a higher-threshold shareholder decision (commonly 75% of votes cast at a meeting) used for major company changes.
- Small businesses and startups often need special resolutions when changing a constitution, adjusting shareholder rights, or making significant governance decisions (and changes to share rights can also involve separate class resolution requirements).
- A practical special resolution template for Australia should clearly identify the company, state the resolution as a special resolution, set out precise wording, and include correct dates, approvals, attachments, and signatures.
- Common mistakes include using the wrong resolution type, ignoring the constitution or Shareholders Agreement, vague drafting, and failing to complete follow-up steps like ASIC lodgements.
- Strong corporate records make your business easier to grow, fund, and eventually sell - and special resolutions are a key part of that recordkeeping.
If you’d like help preparing a special resolution (or reviewing your constitution and shareholder arrangements), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
