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ACCA Applied Skills · Corporate and Business Law (Global) · Company meetings and resolutions

Karlov Co has 1,000 voting shares held by members who all attend a meeting. A special resolution to change the company's name receives 740 votes in favour and 240 against; 20 shares abstain. Which statement is correct?

The special resolution passes. The 75% requirement applies to votes actually cast, not total shares, and abstentions are ignored. Votes cast are 980, 75% of which is 735, and 740 votes in favour exceeds that figure.

  1. AIt fails, because 740 is less than 75% of 1,000 shares
  2. BIt passes, because 740 is more than 75% of the 980 votes castCorrect
  3. CIt fails, because abstentions count as votes against
  4. DIt passes, because 740 exceeds a simple majority of all shares

Explanation

The 75% threshold is measured against votes cast, and abstentions are not votes cast. Votes cast are 740 + 240 = 980. 75% of 980 is 735, and 740 exceeds this, so the special resolution passes. Measuring against all 1,000 shares is the wrong base.

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