Contents
Back to top
Introduction
This guide is about
different types
of company resolution.
It explains what
they are and the
differences between
them. It also tells
you which resolutions
need to be filed
at Companies House.
This is one of a
series of Companies
House guides which
provides a simple
guide to the Companies
Act and other related
legislation.
Please note that
this is only intended
as a brief introduction
to the subject,
so you should read
it in conjunction
with the relevant
law.
You will find the
relevant law in
the Companies Act
1985 (as amended
in 1989 and later).
Back to top
CHAPTER
1
Resolutions - the
basics
1. What
is a resolution?
A resolution
is an agreement
or decision made
by the directors
or members (or a
class of members)
of a company. When
a resolution is
passed, the company
is bound by it.
A proposed
resolution
is a motion. If
the necessary majority
is not obtained,
then the proposed
resolution fails.
2. How is
a vote taken?
The vote on a resolution
in a general meeting
(or in a meeting
of a class of members)
is taken according
to the rules in
the company's articles
of association.
Generally it is
by a show of hands.
But any member may
demand a poll unless
the company's articles
say otherwise. A
declaration by the
chairman that the
resolution is carried
on a show of hands
is all that is required
for a resolution
to be passed. The
number of votes
for or against need
not be counted.
3. Who must
receive copies of
a resolution before
and after approval?
Notice of the intention
to propose a resolution
must be sent to
company members.
If a company has
auditors, they must
also be sent copies
- or otherwise notified
of the contents
- of all proposed
statutory written
resolutions ( see
chapter 2).
Companies House
must be sent a copy
of any resolution
listed in question
4 below. The resolution
must be:
- in printed form
(or in another
form approved
by Companies House);
and
- delivered to
Companies House
within 15 days
of the date it
was made or passed
by the company.
4.
What resolutions
need to be sent
to Companies House?
A copy of every
resolution or agreement
listed below must
reach Companies
House within 15
days after it has
been passed. Some
of the resolutions
are described more
fully in chapter
2.
-
Special
resolutions
and extraordinary
resolutions.
Also, resolutions
or agreements
passed by unanimous
agreement of
all the members
but which would
otherwise have
needed to be
passed as special
resolutions
or as extraordinary
resolutions.
- Elective resolutions.
Also, resolutions
revoking elective
resolutions.
-
Class
resolutions
passed by unanimous
agreement of
all the members
of a class of
shareholders
but which would
otherwise have
needed to be
passed by a
specific majority
or in another
manner. Also,
all resolutions
or agreements
that effectively
bind all the
members of any
class of shareholders
though they
have not been
agreed by all
those members.
- Directors' resolutions
as listed in question
1 of chapter 2.
- Ordinary resolutions
as listed in question
2 of chapter 2.
-
Resolutions
for voluntary
winding-up.
(See our guide,
'Liquidation
and Insolvency'
or 'Liquidation
and Insolvency
(Scotland)'
for more information
on this.)
Back to top
CHAPTER
2
Resolutions - different
types
There are
eight types of resolution
1. Directors'
resolutions
These are only used
by directors at
board meetings.
The following directors'
resolutions must
be filed at Companies
House:
-
a
resolution to
change the company's
name in response
to a direction
from the Secretary
of State under
section 31(2)
of the Companies
Act 1985;
-
a
resolution to
alter the memorandum
of association
of a company
ceasing to be
a public company
following the
acquisition
of its own shares;
- a resolution
by the directors
of an old public
company to re-register
as a plc;
-
a
resolution to
allow title
(meaning the
right to benefit
from ownership)
to be evidenced
and transferred
without a written
document.
2.
Ordinary resolutions
These are used for
all matters unless
the Companies Act
or the company's
articles of association
require another
type of resolution.
They are passed
by a simple majority
of members who are
entitled to vote
at a meeting, notice
of which has been
properly given.
Voting may also
be allowed by a
member's substitute
known as a proxy.
The length of notice
required for an
ordinary resolution
depends on the kind
of meeting at which
the resolution is
to be discussed.
An ordinary resolution
may be passed at
short notice using
the same arrangements
as apply to special
resolutions - see
question 4 below.
The following ordinary
resolutions need
to be filed at Companies
House:
- a resolution
to give, vary,
revoke or renew
an authority to
the directors
to allot shares;
-
a
resolution to
give, vary,
revoke or renew
an authority
to the company
to make a market
purchase of
its own shares;
-
a
resolution to
prevent or reverse
a directors'
resolution to
allow title
of shares to
be evidenced
or transferred
without a written
document;
-
a
resolution to
authorise an
increase of
share capital.
This type of
resolution must
be sent with
Form 123 (notice
of increase
in nominal capital).
3.
Extraordinary resolutions
These are required
for certain matters,
for example modifying
the rights of classes
of shareholders
or winding-up. They
are passed by at
least 75% of the
members who vote
on the motion, in
person or by proxy
(where allowed)
at a general meeting.
The length of notice
required for an
extraordinary resolution
will depend on several
factors, including
the type of meeting
to be held. They
may be passed at
short notice under
the same arrangements
as for special resolutions
- see question 4
below.
4. Special
resolutions
These are passed
at a general meeting
of which at least
21 days' notice
specifying the intention
to propose a resolution
as a special resolution
has been given.
(In Scotland, the
21 days may include
the day of the meeting.)
As with an extraordinary
resolution, a special
resolution requires
a 75% majority.
It is required for
important matters
such as alterations
to the memorandum
or articles of association,
a change of name,
or a reduction of
capital to be approved
by the court.
A meeting at which
a special resolution
(or an ordinary
or extraordinary
resolution) is to
be proposed may
be held at shorter
notice with the
agreement of the
members entitled
to attend and vote
at the meeting.
Agreement to short
notice of the meeting
and resolution must
be by:
-
the
majority of
members in number
who also hold
at least 95%
in nominal value
of the shares
giving voting
rights; or
-
in
the case of
a company without
share capital,
the majority
of members in
number who also
represent at
least 95% of
the total voting
rights; or
-
in
the case of
a meeting called
as the annual
general meeting,
all the members.
Private
companies may pass
an elective resolution
(see question 5
below) to reduce
the majority required
to authorise short
notice of a meeting
and notice of a
resolution, to not
less than 90%.
When a resolution
alters the memorandum
or articles of association
of a company, a
copy of the amended
document must also
be filed at Companies
House.
5. Elective
resolutions
These may be passed
by private companies
only and for five
specific purposes
- see below. 'Elective
resolutions' must
be passed by unanimous
agreement in general
meeting of the company
by all the members
entitled to attend
and vote at the
meeting in person
or by proxy. A period
of 21 days' notice
of the resolution(s)
must be given unless
all members entitled
to attend and vote
at the meeting agree
to a shorter period.
Elective resolutions
may be used for
the following purposes
only:
6.Written
resolution
A written resolution
signed by all the
members, or a resolution
of any class of
members, may be
passed by a private
company to resolve
anything which could
have been passed
by the company in
general meeting.
However, this power
cannot be used to
remove a director
or auditor before
the end of their
term of office.
To pass a written
resolution, a meeting
is not required
and no prior notice
is necessary. But
the resolution can
only be passed by
unanimous agreement
of all the members
who, at the date
of the resolution,
would be entitled
to attend and vote
at a meeting that
would otherwise
have been held to
pass it. The date
of a written resolution
is the date on which
the last member
signs. The signatures
of each member do
not need to be on
a single document.
A copy of the proposed
written resolution
must be sent to
the company's auditors
- or they must otherwise
be notified of its
contents - at or
before the time
the resolution is
supplied to the
members for signature.
A breach of this
requirement would
be a criminal offence
but would not affect
the validity of
the resolution.
This requirement
does not apply to
companies that do
not have auditors.
The statutory written
resolution procedure
is in addition to
anything the company's
articles say about
written resolutions.
7.Class
resolution
When a company proposes
to pass a resolution
that affects one
class of share only,
then it will usually
need to obtain the
consent of a majority
of the holders of
the class of share.
This can be obtained
in writing or by
passing an extraordinary
resolution at a
separate class meeting.
8 .Shareholder
resolution
A company has a
duty to circulate
resolutions proposed
by shareholders
and intended to
be moved at an annual
general meeting
if a certain number
of members request
it. The number of
members necessary
is:
- members having
5% of the voting
power of the company;
or
- 100 or more
shareholders whose
paid-up capital
averages at least
£100 each.
The
resolution may be
circulated at the
expense of the members
making the request,
unless the company
resolves otherwise.
Sections 376 and
377 of the Companies
Act also places
other conditions
on the circulation
of proposed shareholders'
resolutions. For
example, the time
within which the
request must be
deposited at the
company's registered
office before the
annual general meeting.
Shareholder resolutions
are voted on at
a company's annual
general meeting
in the same way
as other resolutions
- see
chapter 1.
Back
to top
CHAPTER 3
Further information
1. Is there
a standard form
for resolutions?
No, but the Registrar
does have a standard
format available
for: If
you need more information
about resolutions,
please write to
Companies House
at one of the addresses
given below.
2. How do
I send information
to the Registrar?
You may deliver
documents to the
Registrar by hand
(personally or by
courier), including
outside office hours,
bank holidays and
weekends to Cardiff,
London and Edinburgh.
You may also send
documents by post
or by the Hays Document
Exchange service
(DX). If you send
documents, please
address them to:
For
companies incorporated
in
England & Wales: |
For
companies incorporated
in
Scotland: |
The Registrar
of Companies
Companies House
Crown Way
Cardiff CF14
3UZ
DX33050 Cardiff
|
The Registrar
of Companies
Companies House
37 Castle Terrace
Edinburgh EH1
2EB
DX ED235 Edinburgh
1 |
We will only acknowledge
receipt of documents
at Companies if you
provide a stamped
addressed envelope.
| Please
note: Companies
House does not
accept accounts
or any other
statutory documents
by fax. |
3. Where
do I get forms and
guidance booklets?
This is one of a
series of Companies
House booklets which
provide a simple
guide to the Companies
Act.
Statutory forms
and guidance booklets
are available, free
of charge from Companies
House. The quickest
way to get them
is through this
website or by telephoning
0870 3333636.
If you prefer you
can write to our
stationery sections
in Cardiff or Edinburgh.
Forms can also be
obtained from legal
stationers, accountants,
solicitors and company
formation agents
- addresses in business
phone books.
 Back
to top
|
