Supermajority

Definition and Significance of the Supermajority

The term Supermajority (English: qualified majority, enhanced majority, or special majority) refers in legal science and corporate law to a voting majority that exceeds a simple majority. While a simple majority means achieving more than 50% of the votes cast, a supermajority requires a higher percentage, for example, a two-thirds majority or a three-quarters majority.

Supermajority provisions are applied worldwide in numerous areas of law—particularly in corporate law, constitutional law, association law, and the conclusion of international treaties. The aim of the supermajority is to secure broader consensus and better protect minority rights in particularly far-reaching or fundamental decisions.

Areas of Application of the Supermajority

Corporate Law

In corporate law, the supermajority clause serves to protect the shareholders or partners against fundamental structural decisions that may have significant impacts on the company or its ownership structure.Examples:

• Amendments to the Articles: For amendments to the articles of association of a stock corporation (AG) or a limited liability company (GmbH), many jurisdictions require a supermajority, typically a three-quarters majority of the votes cast (§ 179 (2) AktG, § 53 (2) GmbHG).
• Capital measures: For capital increases or reductions, numerous national corporate laws also require a qualified majority of the shareholders’ or stockholders’ votes.
• Merger, demerger, and conversions: For company mergers, demergers, or conversions, a supermajority is often required to ensure that fundamental changes are not decided by a narrow majority alone.

Association Law

Associations and other legal entities under private law often stipulate that certain decisions—such as amendments to the articles or dissolution of the association—can only be adopted with a qualified majority. This prevents fundamental changes to the purposes or structures of the association being made hastily by a temporary majority.

Constitutional Law and Parliamentary Procedures

In constitutional law, the supermajority is used to attach particularly high hurdles to constitutional amendments. In Germany, for example, an amendment to the Basic Law requires a two-thirds majority of the members of the Bundestag and the Bundesrat (Art. 79 (2) GG).

Many parliaments worldwide also require supermajorities for particularly significant resolutions (e.g., impeachments, approval of certain treaties).

International Law and Supranational Organizations

For international treaties or decisions of supranational bodies (such as within the EU or the UN), qualified majorities are used to place important decisions on a broader foundation and to protect individual states from being outvoted by a relative majority.

Forms and Variations of the Supermajority

Voting Quorums and Thresholds

The specific design of the supermajority can vary considerably. Common quorums are:

• Two-thirds majority (66.67% of the votes),
• Three-quarters majority (75% of the votes),
• Another specified qualified quota (e.g., 70%, 80%, etc.).

The specific quorums are set by law, the articles of association, the partnership agreement, or rules of procedure.

Application to Attending Versus Eligible Members

It is also essential whether the supermajority requirement applies to those present, to those entitled to vote, or to the total membership (i.e., all members regardless of attendance). Usually, the quorum refers to the valid votes cast, unless there are differing regulations.

Relationship to Other Majority Requirements

The supermajority must be distinguished from the simple and absolute majority. An absolute majority requires more than half of all possible votes, whereas a simple majority only requires more ‘yes’ votes than ‘no’ votes among votes cast. The supermajority significantly exceeds both values.

Aims and Purpose of the Supermajority

The legal requirement of a qualified majority primarily serves the following purposes:

• Stability and continuity: Far-reaching or irreversible changes should not be made based on a narrow majority.
• Protection of minorities: Minority interests are better protected against arbitrary resolutions.
• Promotion of consensus: The necessity of a supermajority can lead to more intensive deliberation and more sustainable consensus.
• Increase in legitimacy: Decisions of fundamental importance gain legitimacy through broad support.

Criticism and Limits

Points of Criticism

• Potential for blockage: A hurdle that is too high can impede or block necessary reforms when there is not a sufficient majority.
• Loss of capacity to act: In crisis situations, high majority requirements may result in organizational paralysis.
• Minority protection vs. majority principle: Strong minority protection can overemphasize individual minority positions.

Practical Limits

Many legal systems provide exceptions to the supermajority requirement, particularly when certain minimum quorums cannot be reached or minorities abuse their rights. Judicial review of resolutions, e.g., for resolutions violating the articles despite the quorum not being met, is an additional element of minority protection.

Supermajority in Case Law

Courts have frequently dealt with disputes regarding the interpretation, validity, and application of supermajority clauses. Notably, they consider:

• The requirements for the proper counting of votes,
• the impact of abstentions on achieving the quorum,
• the compatibility of individual supermajority clauses with higher-ranking law,
• as well as the possibility of subsequently amending supermajority requirements by majority resolution.

Differences with Blocking Minority and Other Special Forms

The supermajority must be distinguished from the blocking minority (blocking minority), where a certain minority can block decisions by reaching a specified number of votes. Also to be distinguished are special rights of individual group members, such as veto rights.

Significance in International Legal Orders

While supermajority requirements are especially common in corporate, association, and constitutional law in Germany and continental Europe, they are also of central importance in common law—as in the USA for constitutional amendments. International treaties and supranational organizations frequently use supermajority requirements to ensure a fair balance of interests among different states.

Summary

Die Supermajority is, as a qualified majority, an important legal instrument that occurs with various quorums in numerous areas of law. It protects fundamental organizational structures from arbitrary resolutions, ensures protection of minorities, and increases the legitimacy of far-reaching decisions. Through its various forms and judicial review, it constitutes a central element of modern legal systems that maintains the balance between capacity to act and responsibility toward minorities.

Further Topics:

• Blocking minority
• Amendment to the articles
• Co-determination rights in corporations
• Procedures for constitutional amendments

Frequently Asked Questions

What legal provisions govern supermajority clauses in partnership agreements?

Supermajority clauses in corporate law are structured by specific provisions of the respective national legislator, for example under the German GmbH Act (GmbHG) or the Stock Corporation Act (AktG). The legislator determines whether and to what extent the majority requirements under the law may be deviated from, and how a qualified majority—compared to a simple majority—can be regulated. In practice, the law already requires enhanced majorities for particularly significant resolutions, such as amendments or capital measures, from which deviation to the detriment of minorities is frequently not permitted. In addition, such clauses must be clearly and unequivocally defined in the partnership agreement in order to be legally effective. Beyond that, further supermajority provisions for additional decisions may be included in the agreement, provided they do not violate mandatory law or impermissibly curtail minority rights.

What are the legal consequences of including a supermajority clause in a partnership agreement?

Providing for a supermajority clause means that certain company-related decisions, such as mergers, dissolutions, or extraordinary investments, can only be made with an enhanced majority of those entitled to vote. This strengthens protection of minorities against being overruled by a mere majority, but on the other hand, increases consensus requirements and may slow down or block decision-making processes. Legally, compliance with the supermajority is an essential condition for the effectiveness of the respective resolution; a resolution that does not reach the specified qualified majority is void or contestable. Case law especially examines whether the clause was lawfully introduced and unambiguously formulated, and whether it unfairly disadvantages minorities.

Are there statutory limits for determining the majority requirement?

Yes, establishing a supermajority requirement is subject to legal limits. On one hand, the partnership agreement may not generally require majorities that would actually block the ability of the company to pass resolutions—for example, unanimity in a shareholders’ meeting with many members—unless the law expressly provides for this or allows corresponding flexibility. On the other hand, there are minimum majority requirements for certain resolutions—such as amendments to the articles under § 53 (2) GmbHG—which may not be undercut to ensure minority protection. The creation of supermajority clauses exceeding statutory requirements must therefore be reviewed for their appropriateness and compatibility with mandatory law.

How do supermajority clauses affect decision-making capacity and contestability?

If a supermajority requirement is stipulated in a partnership agreement, it is essential for the effectiveness of a relevant resolution that the required qualified majority is achieved. Otherwise, the resolution under § 241 No. 1 AktG or the corresponding provisions in the GmbHG or Cooperative Law is void and may be challenged in court. Compliance with this clause is reviewed by courts in actions to contest resolutions; if the necessary majority is missing, the resolution is annulled. In relevant cases, the minutes of the meeting must therefore document the majority decision precisely.

Can supermajority clauses be amended or repealed retrospectively, and what must be considered?

An amendment or repeal of a supermajority clause generally constitutes an amendment to the articles and therefore requires compliance with the existing majority requirement, i.e., the qualified majority stipulated in the agreement. Practically, this means that a self-imposed supermajority clause remains binding until it is amended or repealed with the required majority. In addition, any statutory provisions protecting minorities must be observed; a reduction in the majority requirement to the detriment of a particular shareholder group may be legally inadmissible.

What special considerations apply to supermajority clauses in an international context?

In an international context, it must be noted that the legal requirements for supermajority clauses can vary significantly depending on the applicable company law jurisdiction. For instance, British company law and US corporate law have their own majority requirements as well as specific stipulations regarding formulation and enforceability. In addition, cross-border legal transactions may involve conflict-of-law rules that affect the recognition and contestability of such clauses. Related corporate law provisions should therefore be structured with regard both to the respective legal system and the applicable law (governing law).