Special Resolution
Also known as: 75% Resolution, Supermajority Resolution, Section 65 Resolution.
What is Special Resolution?
A special resolution is a shareholder resolution requiring at least 75% of voting rights exercised to be adopted. Under Section 65(9) of the Companies Act 71 of 2008, it is required for MOI amendments, class-right variations, share buy-backs, voluntary winding-up, and related-party transactions, unless a higher threshold is set in the MOI.
Drafted and reviewed by
Attorney & Founder, My-Contracts.co.za · Legal Practice Council of South Africa (LPC F17333)
Definition and context
A special resolution is the supermajority shareholder resolution threshold under the Companies Act 71 of 2008, reserved for strategic or fundamental decisions that go beyond ordinary course business. Section 65(9) sets the default threshold at "the support of at least 75% of the voting rights exercised on the resolution" — note this is 75% of votes actually cast, not 75% of total issued voting rights. The MOI may increase this threshold (for example, to 80% or unanimity for specific matters) but cannot reduce it below 75% for statutory special-resolution matters.
The Companies Act reserves certain matters to special resolution regardless of the MOI. These include amending the MOI (Section 16); approving a name change (Section 16); ratifying ultra vires conduct (Section 20); approving a distribution of the company's capital (Section 46); authorising a share buy-back (Section 48); approving financial assistance to a director (Section 45); approving financial assistance for the purchase of securities (Section 44); approving a scheme of arrangement (Section 114); approving a merger or amalgamation (Section 113); approving a disposal of all or greater part of assets or undertaking (Section 112); approving voluntary winding-up (Section 80); and approving any related-party loan or guarantee (Section 45). The MOI may add further matters requiring special-resolution approval.
Procedural requirements under Section 65 include written notice to all shareholders at least 15 business days before the meeting (or such shorter period as the MOI permits, provided shareholders unanimously waive longer notice), a statement of the proposed resolution, and a quorum established under Section 64. Postal voting and electronic participation are permitted. In closely held companies, a written round-robin resolution signed by shareholders holding at least 75% of voting rights has the same force as a resolution passed at a meeting, under Section 60 — simplifying governance but still requiring a 20-business-day consideration period unless waived.
Where this term lives in law
Companies Act 71 of 2008
Sections: 16, 44, 45, 46, 48, 60, 64, 65, 112, 113, 114
Governs the incorporation, governance, and winding-up of companies in South Africa.
Frequently asked questions
What percentage is required for a special resolution in South Africa?
Under Section 65(9) of the Companies Act 71 of 2008, at least 75% of voting rights exercised on the resolution. Note this is 75% of votes actually cast at the meeting (or on a written resolution), not 75% of total issued voting rights. The MOI may increase the threshold but cannot reduce it below 75% for statutory special-resolution matters.
What matters require a special resolution?
Key statutory matters include MOI amendments (Section 16), share buy-backs (Section 48), financial assistance to directors (Section 45), financial assistance for securities purchase (Section 44), schemes of arrangement (Section 114), mergers (Section 113), disposal of all or greater part of assets (Section 112), voluntary winding-up (Section 80), and related-party transactions. The MOI may add further matters.
Can a special resolution be passed without a meeting?
Yes. Section 60 of the Companies Act allows a written resolution signed by shareholders holding at least 75% of voting rights to have the same effect as a special resolution passed at a meeting. The circulation period is 20 business days unless shareholders unanimously waive it. This is particularly useful in closely held companies where convening meetings is procedurally burdensome.
What is the notice period for a special-resolution meeting?
Section 62 of the Companies Act requires at least 15 business days' written notice for a shareholder meeting considering a special resolution (down from 21 under the old Act). The MOI may specify a longer period. Shorter notice is permitted only if every shareholder entitled to receive notice waives the minimum period in writing, which is the standard approach in closely held companies.
Contract templates using this term
3 templates reference Special Resolution.