SQE1 shareholder decisions: what you must know and how it is tested

SQE1 shareholder decisions and resolutions questions test which majority a company needs, whether a meeting or a written resolution is allowed, and what notice is required. Know the two kinds of resolution and the special rules for removing a director. Read it with the wider Business Law and Practice guide.

SubjectBusiness Law and Practice (FLK1)

Key lawCompanies Act 2006, Part 13

Question typeSingle best answer, five options

The rules to apply

An ordinary resolution needs a simple majority of more than 50%. A special resolution needs at least 75%. At a meeting the percentages are of votes cast, so members who do not vote or attend do not count. On a show of hands each member has one vote. On a poll, votes follow shares, unless the articles say otherwise.

A private company may pass any resolution as a written resolution, except to remove a director or auditor (s288(2)). A written resolution is passed when the required majority of all eligible votes has agreed, not of votes cast, so silence counts against it. The company circulates the proposal to every eligible member.

Notice of a general meeting of a private company must be at least 14 days (s307). Shorter notice is valid if members holding at least 90% in nominal value of the voting shares agree. Quorum is two qualifying persons unless the company has one member (s318). Members may appoint a proxy (s324) and can demand a poll.

Common matters. Ordinary: remove a director under s168 (with special notice to the company, 28 days before the meeting), authorise the directors to allot shares (s551). Special: amend the articles (s21), change the company name, and reduce share capital. Class rights are varied under s630 or the articles. A member can complain of unfairly prejudicial conduct under s994.

Traps examiners use

Using 75% of votes cast when the question concerns a written resolution (which is 75% of eligible votes).
Allowing a director to be removed by written resolution. The meeting route is required.
Counting absent members as votes against at a meeting. They are ignored.
Forgetting that a member can demand a poll, so the show of hands is not final.
Using an ordinary resolution to alter the articles.
Missing that short notice needs a high level of agreement, not a simple majority.

Worked question 1

Dunmore Ltd is a private company with 100 shares of one class, each with one vote. A holds 40, B holds 35 and C holds 25. A general meeting is called on proper notice to amend the articles. A and C attend. A votes in favour and C votes against. B does not attend. The vote is taken on a poll. Which statement is correct?

A. The resolution is passed because A holds the most shares.
B. The resolution is passed, because absent members are treated as agreeing.
C. The special resolution fails, because only 61.5% of the votes cast were in favour.
D. The resolution is passed as an ordinary resolution, which is enough to amend articles.
E. The resolution fails because a quorum was not present.

Answer: C. Altering the articles needs a special resolution. At a meeting the 75% is of votes cast. A cast 40 for and C cast 25 against, so 40 of 65 is about 61.5%. Absent B does not count. D is wrong about the type of resolution. E is wrong because two members attended.

Worked question 2

Pennine Ltd is a private company. Shareholder Raj holds 55% of the votes and wants to remove a director quickly by circulating a written resolution. Which statement is correct?

A. He can do so, because 55% is an ordinary majority.
B. He can do so only if 75% agree in writing.
C. He cannot use a written resolution to remove a director and must use a general meeting with special notice.
D. He can do so if the director consents in writing.
E. He must apply to court under s994, because only the court can remove a director.

Answer: C. Section 288(2) excludes the removal of a director and of an auditor from the written resolution procedure. The route is s168: an ordinary resolution at a general meeting after special notice. A and B ignore the exclusion. D is a trap, as consent does not change the route, and E is wrong because s168 does not need a court.

Checklist before you move on

What majority is needed: ordinary (over 50%) or special (75% or more)?
Is it a meeting (votes cast) or a written resolution (eligible votes)?
Is the matter one that cannot be done by written resolution?
Check notice period and quorum.
Is special notice needed (director removal)?

Test yourself on more original questions in our SQE1 practice questions.

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Questions

What majority removes a director?

An ordinary resolution at a general meeting, after special notice to the company under s168 of the Companies Act 2006.

What is the notice period for a general meeting of a private company?

At least 14 days under s307, or shorter if members holding at least 90% in nominal value of the voting shares agree.

Can a company pass a special resolution in writing?

A private company can, if the proposal is circulated and members holding at least 75% of eligible votes agree. The written route cannot be used to remove a director or auditor.

Sources: SRA: SQE1 Assessment Specification (from 1 September 2026); Companies Act 2006; Companies House: running a company. Checked 10 November 2026.