What is a special resolution of shareholders and when is one required in Ontario?

Under the Ontario Business Corporations Act, a special resolution is a resolution passed by at least two-thirds of the votes cast at a meeting of shareholders — or signed in writing by all shareholders entitled to vote. This higher threshold distinguishes it from an ordinary resolution, which requires only a simple majority.

Special resolutions are required for significant constitutional or structural changes, including: amending the articles of incorporation, changing the corporate name, altering the authorized share structure, reducing the stated capital, dissolving the corporation voluntarily, and certain amalgamations. The requirement for a two-thirds majority (rather than fifty-one percent) is meant to protect minority shareholders from having fundamental changes imposed on them by a bare majority.

In a corporation with shareholders holding different percentages, the vote requirement matters enormously. If one shareholder holds thirty-five percent, they can block any special resolution by voting against it — this is called a blocking position. Shareholders who understand these voting thresholds can use them strategically during negotiations. When planning any significant change to the corporation's structure, confirming whether it requires a special resolution or an ordinary resolution helps you plan the shareholder approval process and timeline correctly.