When you need to make a big decision as a company - like changing your constitution, altering share capital, or rebranding the company - you’ll usually need a special resolution.
If the words “75% of votes” and “meeting notice” feel a bit daunting, don’t stress. With the right steps and a clean special resolution template, you can capture major decisions properly and keep your company compliant under Australian law.
In this guide, we’ll explain what a special resolution is, when you need one, what it must include, and how to run the process from start to finish. We’ll also share a practical special resolution template you can adapt for your company.
What Is A Special Resolution?
A special resolution is a company decision that requires a higher approval threshold than an ordinary resolution. Under the Corporations Act 2001 (Cth), a special resolution is passed if at least 75% of the votes cast by members entitled to vote are in favour.
You can pass a special resolution at a meeting of members (shareholders), or - for proprietary (Pty Ltd) companies - via a circulating resolution if all members entitled to vote on the resolution sign it (this is effectively unanimous approval).
A special resolution must also be properly notified. The meeting notice has to clearly state that a special resolution will be proposed and include the text of the resolution itself.
When Do You Need A Special Resolution?
You’ll generally need a special resolution for higher-impact changes to the company. Common examples include:
- Adopting, modifying or replacing your Company Constitution
- Changing the company name
- Reducing share capital, converting share classes, or selectively buying back shares
- Approving a major transaction if required by your constitution or shareholders agreement
- Winding up the company (voluntary liquidation)
Your governing documents may require a special resolution for additional matters. It’s common for a Shareholders Agreement to set a higher voting threshold for “reserved matters” (for example, issuing new shares or entering into significant loans). Always check your constitution and any shareholders agreement before you call the vote.
If you’re moving quickly and the change can’t wait for the next annual general meeting, you can call an extraordinary general meeting (EGM) to put the special resolution to members.
What Must A Special Resolution Include?
To be valid, the process and paperwork need to hit a few key points:
- Clear notice: The notice of meeting must state that a special resolution will be proposed and include the full text of the proposed resolution.
- Notice period: For most companies, at least 21 days’ notice is required. For proprietary companies, shorter notice is possible if members with at least 95% of the votes agree beforehand.
- Voting threshold: At least 75% of votes cast by eligible members must be in favour (unless your constitution sets an even higher bar).
- Accurate records: Minutes should record the resolution, votes, and outcome. If passed by circulating resolution, each member’s signature and date should be kept.
- Execution and lodgements: Some outcomes require filings with ASIC (for example, name changes). When attaching documents to the resolution, consider your execution method and the rules for electronic vs wet ink signatures.
If your special resolution changes how documents are signed or who can act for the company, it’s worth understanding the rules around execution under section 127 so the after-effects are implemented correctly.
Step-By-Step: How To Pass A Special Resolution
1) Confirm That A Special Resolution Is Required
Identify the action you want to take and check both the Corporations Act and your company’s constitution. If you also have a shareholders agreement, make sure you follow any special voting rules in that document as well.
2) Draft The Resolution Wording
Use precise, neutral wording that states exactly what is being resolved. If you’re adopting a new constitution or approving specific documents, refer to them clearly (for example, by title and date) and attach them to the notice.
3) Prepare And Send The Notice Of Meeting
Include the time, date and place (or online details) of the meeting, and clearly state that a special resolution will be proposed along with its full text. Give the required notice period unless eligible members consent to short notice.
4) Hold The Meeting And Record The Vote
Run the meeting, manage proxies and quorum as set out in your constitution, and put the resolution to the vote. If 75% or more of votes cast are in favour, the special resolution passes. Record the outcome in the minutes and have the chair sign the minutes.
5) Alternatively: Use A Circulating Resolution (Pty Ltd)
A proprietary company can pass a special resolution without a meeting if every member entitled to vote on it signs a document stating they are in favour of the resolution. Remember this requires unanimous written agreement, not just 75%.
6) Implement The Decision
File any required ASIC forms (e.g. for a name change), update your corporate records, and store signed originals securely. If the resolution adopts or replaces a constitution, keep your current version accessible to directors and members. If you’re adopting a new set of rules, many companies ask us to adopt a constitution that’s drafted for their needs.
Special Resolution Template (Copy & Adapt)
The sample below is written for a meeting of members. You can adjust it for a circulating resolution if your proprietary company is using the unanimous written method.
Company Name: ACN:
Minutes of Meeting of Members
Date: Time:
Location:
Chair:
Attendees:
-
Quorum:
Business:
The Chair noted that proper notice of the meeting was given on and that the notice stated that a special resolution would be proposed, including the text of the resolution.
Special Resolution:
"That, for the purposes of the Corporations Act 2001 (Cth) and the Company's Constitution, the Company :
-
- and authorise the directors to do all things necessary to lodge the required forms with ASIC.]
- fully paid ordinary shares into with the rights as set out in the terms tabled at the meeting.]"
Votes:
In favour:
Against:
Abstain:
Outcome:
The Chair declared the special resolution .
Signed by the Chair:
_____________________________
Date:
Company Name: ACN:
Members' Special Resolution Passed Without a Meeting
Pursuant to the Corporations Act 2001 (Cth)
"We, the undersigned members entitled to vote on this resolution, resolve that:
"
Signed by all members entitled to vote:
Member Name: ______________________ Signature: ___________ Date: ___/___/____
Member Name: ______________________ Signature: ___________ Date: ___/___/____
Attachment:
Tip: If your special resolution adopts or replaces the constitution, attach the full document and keep a certified copy with your corporate records. If you’re starting fresh, many founders opt for a tailored Company Constitution rather than a generic pro forma.
Common Pitfalls To Avoid
- Vague wording: If the resolution wording is unclear, you may not have authority to implement what you intended. State the change precisely and refer to attachments by title and date.
- Missing the “special resolution” flag: The notice must clearly say a special resolution is being proposed and include the text. If not, you risk an invalid vote.
- Wrong notice period: Don’t shortcut the notice unless the Act and your constitution allow it. For proprietary companies, you’ll generally need 21 days’ notice unless 95% agree to shorter notice ahead of time.
- Mixing up thresholds: Ordinary resolutions need a simple majority; special resolutions need at least 75% of votes cast. Circulating special resolutions for a Pty Ltd require unanimous signatures.
- Forgetting follow-up steps: Some outcomes need ASIC filings or updates to registers. Where the resolution authorises directors to complete documents, you may also use a Directors Resolution to action the implementation items.
- Execution gaps: When attaching documents approved under the resolution, ensure they are executed correctly. Depending on the document, you may rely on company execution rules under section 127 or another valid method.
Best Practices For Notices, Meetings And Signatures
Getting the process right protects your decision from challenge and keeps your records clean. A few practical tips:
- Explain the “why” in your notice: While not legally required, a short explanatory note helps members understand what they’re voting on (especially for technical changes like share class rights).
- Attach the documents: If members are asked to adopt a new constitution or approve share terms, include the full document or a link to it with the notice.
- Use tech wisely: Virtual or hybrid meetings are common. Make sure your constitution permits electronic attendance and proxy submissions, and note the dial-in or link details in the notice.
- Keep strong minutes: Record quorum, proxies, each resolution, voting results and the chair’s declaration. Minutes are your legal record if the decision is ever questioned.
- Consider e-signatures: Many companies now sign resolutions and attachments electronically. It’s still important to use reliable methods and understand when wet ink might be required (for example, particular registry filings or deeds).
- Align with your governance: If you’re formalising decision-making among founders, a tailored Shareholders Agreement can set clear voting thresholds and reserved matters so everyone knows when special resolutions are needed.
Frequently Used Special Resolution Wordings (Examples)
Adopting Or Replacing The Constitution
“That, for the purposes of the Corporations Act 2001 (Cth) and the Company’s Constitution, the Company adopt the constitution in the form tabled at the meeting and initialled by the Chair for identification, with effect from the close of the meeting.”
Changing The Company Name
“That the Company change its name to and the directors be authorised to lodge the necessary documents with ASIC and do all things necessary to give effect to this resolution.”
Varying Share Capital (Example - Creating A New Class)
“That the Company convert fully paid ordinary shares into shares with the rights and restrictions set out in the terms tabled at the meeting, and the Company’s Constitution be amended accordingly.”
If your resolution alters share rights or involves a buy-back or selective reduction, it’s important that your constitution supports the action and that you handle any required member approvals or filings. A well-drafted constitution (or a decision to adopt a constitution that fits your plans) can save time and friction later.
Key Takeaways
- A special resolution is a higher-threshold members’ decision that usually requires 75% of votes cast, plus clear notice that includes the resolution text.
- Use special resolutions for major changes like adopting a constitution, changing the company name, or varying share capital - and check your constitution and any shareholders agreement for extra voting rules.
- Follow a simple process: confirm the need for a special resolution, draft precise wording, give proper notice, record the vote (or obtain unanimous signatures for a circulating resolution), and complete any ASIC filings.
- Keep strong records: minutes, signed resolutions, and copies of any attached documents are essential for good governance and future due diligence.
- Set yourself up with robust governance tools: a clear Company Constitution, a practical Shareholders Agreement, and an internal Directors Resolution process make big decisions smoother.
- When in doubt about notices, voting thresholds, or execution, get advice early - it’s easier to do it right than to fix it later.
If you’d like a consultation on drafting or using a special resolution template for your company, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
