Types Of Company Resolutions In Australia: A Quick Guide

When you run a company in Australia, some decisions can be made informally, but others must be made formally through a “resolution.” Resolutions aren’t just paperwork - they’re the mechanism that gives decisions legal effect.

In this quick guide, we’ll unpack the types of resolutions companies use in Australia, when each one applies, and how to pass and record them correctly so you stay compliant and protect your business as it grows.

What Is A Company Resolution?

A company resolution is a formal decision made by either the company’s members (shareholders) at a general meeting, or by the directors at a board meeting. It sets out that the company has agreed to take a specific action - for example, appointing a director, adopting or amending a constitution, or approving a share issue.

Under the Corporations Act 2001 (Cth) and your company’s governing documents, certain actions are only valid if approved by the correct resolution and recorded properly in minutes. Your Company Constitution (if you have one) and any Shareholders Agreement may also set extra rules about voting thresholds, notice and who can approve specific decisions.

In Australian company law, there are two main statutory voting thresholds for member resolutions: ordinary resolutions and special resolutions. Directors also pass resolutions (usually by simple majority unless your constitution says otherwise). Companies can approve resolutions at meetings or, in many cases, in writing without holding a meeting - more on this below.

Ordinary Vs Special Resolutions: What’s The Difference?

Most companies rely on two core resolution types for members’ decisions. Understanding the difference helps you work out the right process and avoid invalid decisions.

Ordinary Resolutions (Simple Majority)

An ordinary resolution passes if more than 50% of the votes cast by members entitled to vote are in favour. In a company limited by shares, voting is typically by number of votes attached to the shares held (not by headcount), unless your constitution provides otherwise.

Ordinary resolutions are used for routine or operational decisions that don’t require a special resolution under the Corporations Act or your constitution. Common examples include:

• Electing or re-electing directors (if the constitution requires member election)
• Receiving financial reports at the AGM
• Authorising the board to take specific actions that don’t require a special resolution

Note: Appointment and removal of directors can be handled by members or the board depending on your constitution. For public companies, members can remove a director by ordinary resolution with special notice requirements. In proprietary companies, removal and appointment processes are usually set by the constitution.

Special Resolutions (75% Of Votes Cast)

A special resolution is required for significant changes to the company’s structure or rights. It passes if at least 75% of the votes cast by eligible members are in favour, and the notice of meeting states the intention to propose the resolution as a special resolution (including the precise wording).

Special resolutions are typically required for decisions such as:

• Adopting, modifying or repealing a Company Constitution
• Changing the company name
• Changing company type (e.g. proprietary to public)
• Approving selective share buy-backs or capital reductions (where applicable)
• Varying or cancelling class rights
• Voluntary winding up of the company

For many of these actions, you’ll also need to lodge documents with ASIC within strict timeframes. Getting the wording right and keeping thorough records is essential.

Director Resolutions

Directors make decisions by board resolution. Unless your constitution sets a different threshold, board decisions usually pass by a simple majority of directors present and voting at a quorate meeting. Many day-to-day decisions - entering contracts, appointing officers, issuing shares within existing authorities - are handled at board level.

Execution of documents by a company that has approved a transaction should follow the Corporations Act’s execution rules - for example, signing documents under section 127 or authorising an agent to bind the company under section 126.

When Do You Need Each Type Of Resolution?

The safest way to decide is to check three things for every decision you’re about to make:

1. The Corporations Act requirements for that type of action
2. Your Company Constitution (or replaceable rules if you don’t have a constitution)
3. Any Shareholders Agreement that specifies approval thresholds or reserved matters

Here are common scenarios to help you map the right approval path.

Decisions Usually Made By Directors (Board Resolutions)

• Entering ordinary commercial contracts
• Declaring or determining dividends (subject to legal tests and your constitution)
• Issuing shares within existing member authorities or under the constitution
• Appointing officers and approving policies

Some boards also have formal delegations to a CEO or sole director to streamline decisions. If you operate with one director, it’s worth understanding how a sole director resolution works in practice.

Member Decisions Requiring An Ordinary Resolution

• Electing or re-electing directors (if required by your constitution)
• Approving certain share issues or authorities (depending on the constitution)
• Adopting non-fundamental policies the constitution puts to members

Member Decisions Requiring A Special Resolution

• Adopting or amending the constitution
• Changing the company name or type
• Varying class rights or making fundamental changes to capital
• Voluntary winding up

If your constitution or shareholders agreement lists “reserved matters” (for example, selling the whole business, issuing new classes of shares, or entering related-party transactions), it may require a special majority or even unanimous approval among members - but that is a contractual or constitutional requirement, not a separate statutory “type” of resolution. The statutory categories remain ordinary and special.

How To Properly Pass And Record Resolutions

Process matters. Even where everyone agrees on the outcome, skipping formalities can make a decision open to challenge. Here’s a practical checklist for meetings and written resolutions.

Before The Meeting

• Identify the decision-maker: Is this a board decision or a members’ decision?
• Confirm the threshold: ordinary (simple majority) or special (75% of votes cast)?
• Prepare the wording: draft the precise resolution. For special resolutions, the notice must include the exact wording and state that it is a special resolution.
• Give proper notice: for members’ meetings, at least 21 days’ notice is common (check your constitution and the Act for any ability to shorten notice with sufficient member consent). Include proxy information if your constitution allows proxy voting.
• Check quorum: ensure your constitution’s quorum requirements will be met.

At The Meeting

• Confirm attendees and quorum on the record
• Identify the chair and any conflicts of interest for directors
• Table any papers and the proposed resolution wording
• Conduct the vote: voting is typically by number of shares held for members, and by directors present for board decisions (unless your constitution sets different rules)
• Record the votes for and against, and whether the resolution passed

After The Meeting

• Record minutes within a reasonable time and have them signed by the chair
• Lodge documents with ASIC where required (for example, special resolutions adopting a new constitution or changing the company name)
• Update company registers and file a copy of the resolution wording
• Execute any documents needed to implement the decision in line with section 127 execution or other valid authority

Passing Resolutions Without Holding A Meeting

Many proprietary companies can pass resolutions in writing, instead of holding a physical or virtual meeting:

• Members: a members’ resolution may be passed without a meeting if all members entitled to vote on the resolution sign a document setting out the resolution (check your constitution)
• Directors: a board resolution may be passed if all directors entitled to vote sign a document containing the resolution (again, subject to your constitution)

These “circular” or “written” resolutions are just as binding as resolutions passed at a meeting. Keep signed copies on file and enter them in your minute books. If you use them regularly, having a clear template - such as a Directors’ Resolution Template - helps keep your records consistent.

What Records Do You Need To Keep?

• Minutes of general meetings and board meetings, including the resolution wording and voting outcomes
• Signed copies of written resolutions
• Updated registers (members, option holders, debenture holders, etc. as relevant)
• Evidence of notices sent and proxies appointed (if applicable)

Members have a right to inspect minutes of members’ meetings. Board minutes are generally not open to inspection by members unless your constitution or an order requires it. Keep that distinction in mind when managing access requests.

Written Resolutions, Reserved Matters And “Unanimous” Approvals

You’ll often hear people refer to “unanimous resolutions.” In practice, unanimity is a voting outcome or a requirement set by your constitution or shareholders agreement - it isn’t a separate statutory class alongside ordinary and special resolutions.

That said, there are two common scenarios where unanimity matters:

• Written resolutions: for many proprietary companies, a members’ resolution can be passed without a meeting only if all members entitled to vote sign the document. That is a unanimity requirement for the written process itself.
• Reserved matters: your Shareholders Agreement may require unanimous consent among shareholders for major transactions (e.g., selling the business, issuing a new class of shares, or related‑party deals). This is a contractual rule that sits on top of the Corporations Act thresholds.

Always check whether your constitution or shareholders agreement imposes higher thresholds than the Act. If it does, you must meet the stricter requirement.

Common Mistakes (And How To Avoid Them)

Even experienced teams can trip up on resolution formalities. These are the pitfalls we see most often - and easy ways to avoid them.

1) Using The Wrong Threshold

Risk: Passing a major structural change by ordinary resolution when a special resolution is required can render the decision invalid.

Fix: Decide early whether the action triggers a special resolution. Draft the notice accordingly and include the precise wording.

2) Voting “By Headcount” When Votes Are By Shares

Risk: Counting the number of members “for” and “against” instead of the number of votes attached to shares can skew the result.

Fix: Confirm the voting method your constitution sets for members’ meetings. In most companies limited by shares, it’s one vote per voting share (subject to class rights).

3) Skipping Or Shortening Notice Improperly

Risk: Short notice without proper consent or required wording for a special resolution can invalidate the result.

Fix: Follow the minimum notice periods and content requirements. Only shorten notice if the Act and your constitution allow it and the necessary majority consents in writing.

4) Mixing Up Board Vs Member Approvals

Risk: Having the board approve something the members must approve (or vice versa) can create enforceability issues and shareholder disputes.

Fix: Map decisions to the correct decision-maker. Your constitution often sets who approves what; where it’s silent, lean on the Act and common practice.

5) Poor Record-Keeping

Risk: Missing minutes, unsigned written resolutions, and lack of evidence of notice can cause problems with banks, investors or ASIC.

Fix: Keep a robust minute book, file signed copies promptly and align your execution process with section 127 or valid authorisations under section 126.

6) Overlooking Your Own Constitution Or Shareholders Agreement

Risk: Failing to follow higher thresholds or reserved matters can spark disputes or allow actions to be challenged.

Fix: Treat your Company Constitution and Shareholders Agreement as your first port of call for process and thresholds, then check the Act.

7) Not Lodging With ASIC When Required

Risk: Late or missing ASIC filings (for example, special resolutions adopting or modifying a constitution, or changing company name/type) can result in penalties or delays.

Fix: Build a post‑meeting checklist that includes all ASIC lodgements and internal register updates, with clear due dates.

Key Takeaways

• In Australia, members’ decisions are approved by ordinary resolutions (more than 50% of votes cast) or special resolutions (at least 75% of votes cast). Directors pass board resolutions, typically by simple majority.
• Use ordinary resolutions for routine matters; use special resolutions for fundamental changes like adopting or amending a constitution, changing name or type, major capital changes, or winding up.
• “Unanimous approval” is not a separate statutory category - it’s either required for written resolutions or imposed by your constitution or shareholders agreement for reserved matters.
• Follow proper process: give correct notice (and wording for special resolutions), confirm quorum, record votes, and minute decisions. Keep signed copies of written resolutions.
• Members usually vote by share votes, not by headcount. Members can inspect members’ meeting minutes, but not board minutes (unless your constitution says otherwise).
• Implement decisions the right way with valid document execution under section 127 or proper authorisation under section 126, and lodge any required ASIC forms on time.
• Your Company Constitution and Shareholders Agreement sit alongside the Corporations Act - if they set higher thresholds or reserved matters, you must meet them.

If you’d like a consultation on company resolutions, compliance or corporate governance for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.