Association of Chartered Certified Accountants (ACCA) Certification Practice Test

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the ACCA Certification Exam with interactive quizzes and detailed explanations. Get a head start on your success with our comprehensive study tools.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What type of resolution is typically required for a company to wind up voluntarily?

Ordinary resolution
Special resolution
Unanimous resolution
Majority resolution

The correct answer is: Special resolution

A special resolution is required for a company to wind up voluntarily because it is a significant decision that typically requires a higher level of agreement among shareholders compared to ordinary resolutions. A special resolution usually necessitates a two-thirds or three-quarters majority, depending on the jurisdiction, signaling that the decision is of substantial importance for the company's stakeholders. In contexts involving corporate governance, a voluntary winding up indicates that the company has chosen to cease operations and liquidate its assets in an orderly fashion, often to settle debts and distribute any remaining assets to shareholders. The necessity for a special resolution ensures that all shareholders have had the opportunity to express their consent or dissent regarding this critical action, thereby providing a safeguard against hasty or unilateral decisions by a small group of investors.