Which type of resolution is needed for the change of articles of association unless entrenched?

Study for the ICAEW ACA Certificate Level - Law Test. Dive into multiple choice questions and detailed explanations to prepare effectively. Get ready for your exam!

The correct answer is the special resolution because changing the articles of association of a company typically requires a higher level of agreement from the shareholders than an ordinary resolution. This requirement is in place to ensure that significant changes, which can affect the governance structure and the rights of shareholders, receive adequate support.

A special resolution requires at least a three-quarters majority of votes cast, reflecting a stronger consensus among shareholders about the changes being proposed. This threshold is designed to prevent a small minority from imposing changes that could detrimentally impact the collective interests of all shareholders.

In contrast, an ordinary resolution, which only requires a simple majority, is sufficient for most routine business decisions but not for fundamental changes such as altering the articles. Majority resolutions and unanimous resolutions lack the specific legal context that a special resolution provides in this scenario, as neither aligns with the statutory requirements for amending articles of association unless they have been entrenched, which would require even stricter measures.

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