Resolutions and voting at general meetings and AGMs

Resolutions

A resolution is a decision made by members at a meeting. There are 2 types of resolutions that can be put to members to consider and vote on – resolutions (sometimes referred to as ‘ordinary resolutions') and special resolutions.

For a resolution to pass requires a majority of votes cast to be in favour of it (unless your rule book replaces this rule with a different amount).

For a special resolution to pass it requires 75 per cent of the total votes cast to be in favour of it (not 75 per cent of all members).

When special resolutions are required

Only certain decisions require members to pass a special resolution. These include:

• register a new corporation or amalgamate with another corporation
• change a corporation’s name
• amend a corporation’s rule book
• cancel a member’s membership (for certain reasons only)
• transfer the corporation’s registration to another law
• wind up a corporation, and decide how to distribute assets in a winding up.

Who can propose a resolution

Directors will propose resolutions in the notice of the meeting (see Calling meetings). 

Members also have a right to propose a resolution to be considered at a general meeting. For example, they may propose a resolution to:

• change the corporation's rule book
• remove or appoint a director/s

Process for members’ to propose a resolution

To propose a resolution the members need to give notice to the corporation. The request from members must:

• be in writing
• set out the words of the proposed resolution/s
• be signed by all the members making the request
• be signed by the required number of members
• be given to the corporation.

Make sure the request is valid

The number of members needed to make the request depends on how many members the corporation has.

The following table shows how many members are usually necessary.

Responding to a members’ proposal for a resolution

After a notice of a resolution proposed by members has been given to a corporation, the corporation should check it:

• If the request is not valid the corporation does not have to give notice of it.
• If the resolution is defamatory the corporation does not have to give notice of it. A resolution may be defamatory if it would harm a person’s reputation, usually by subjecting the person to public contempt, disgrace or ridicule, or by affecting the person’s business. If you think a statement could be defamatory you should get legal advice.

If the request is valid and the proposal is reasonable, the corporation must consider it at the next general meeting that takes place more than 28 days after the notice is given. If the next general meeting is being held within 28 days, the corporation can hold the resolution for the next general meeting.

When the corporation gives notice of the next general meeting, the corporation must give notice of the members' resolution in the same way that it gives notices of general meetings.

The corporation is responsible for the cost of giving members notice of the resolution.

Giving notice of resolutions

When a special resolution or members' resolution is going to be put to members at a general meeting or AGM there are rules about telling members about it. The main rule is that members must be given notice – that is, it must be in the notice of the meeting. Giving members notice gives them time to think about the business of the meeting, any decisions they’re being asked to make, any questions they want to ask in the meeting. Basically, members are making an informed decision about whether or not to participate in the decision by attending the meeting or sending a proxy if their corporation allows proxies.

When notice is given for a meeting it must be clear what the purpose of the meeting is. If there are any proposed special resolutions or members' resolutions, the exact words of the proposed resolution/s must be in the notice.

Read more on giving notice of general meetings.

Voting

Who can vote

Every member usually has one vote. This includes the chairperson if they are a member too. The number of votes for each member can be changed in a corporation’s rule book. 

The chairperson should advise members how voting will be carried out at a general meeting or AGM: will votes be carried on a show of hands, or will members need to cast secret ballots? Generally, a resolution put to the vote at a general meeting or AGM is decided on a show of hands.

Before a vote takes place, the chairperson must also inform the meeting if there are proxy votes and how they will be cast. 

An objection or challenge to a right to vote can only be made at a meeting. The chairperson must rule on it and their decision is final. 

The chairperson may have a casting vote if a vote on a resolution is drawn or tied. 

Polls

A poll (a formal count of votes) can be requested by: 

• at least five members entitled to vote on the resolution
• members with at least five per cent of the votes that can be cast on the resolution
• the chairperson. 

A corporation’s rule book can provide for a lower number of members to demand a poll. A poll can be demanded at any time before, during or immediately after a vote on a show of hands is declared. The chairperson decides how the poll will be taken, unless the rule book specifies a process. 

How to count the votes

No matter what voting method you use, the chair of the meeting declares if the resolution is passed or not.

It's the votes for and against a resolution that are counted. You do not count the number of members at the meeting who didn’t vote. If your corporation allows proxy votes, those need to be counted too.

For a vote by show of hands, there’s no need to count every single vote if the outcome is clear. The chair decides if the required number of votes was reached.

For a poll vote, every single vote is accurately counted to work out if the required number of votes was reached.

Proxies

A corporation member who is entitled to attend and vote at general meetings may be able to give another person the power to vote or attend meetings on their behalf. The process is called appointing a proxy.

Proxies must be in writing and be signed by the member giving the proxy. The proxy form must contain the following information: 

• the member’s name and address
• the corporation’s name
• the proxy holder’s name or the name of the office held by the proxy holder
• meetings at which the proxy holder will vote. 

There is usually a proxy form in the back of a corporation’s rule book, if proxies are allowed. 

A corporation must receive a completed proxy form 48 hours before a general meeting or AGM takes place. 

A person can be a proxy for a maximum of three members.