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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:
- to amend the duration
of the authority of directors to allot
securities;
- to dispense with
the holding of annual general meetings;
- to dispense with
the laying of accounts and reports before the members in
general meeting;
- to allow the majority
required to authorise short notice of a meeting and notice
of a resolution to be reduced from 95% to a lower figure
but not less than 90%;
- to dispense with
the annual appointment of auditors.
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.
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CHAPTER 3
Further information
1. Is there a
standard form for resolutions?
No, but the Registrar
does have a standard format available for:
- dormant companies
wishing to exempt themselves from the requirements to appoint
auditors in respect of accounts covering a financial year
ending before 26 July 2000; and
- companies wishing
to change their name.
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 post, by hand (personally or by courier)
or, by the Hays Document Exchange service.
If you send documents
by post, you should address them to:
For companies
registered in
England & Wales: |
For companies
registered 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 |
During office hours
you can deliver documents by hand (personally or by courier)
to Companies House in Cardiff, London, Manchester, Birmingham
and Leeds for English and Welsh companies. Documents for Scottish
companies should be delivered to the Registrar in Edinburgh.
Outside office hours, (including Bank Holidays and weekends)
documents can be delivered by hand to Cardiff, London or Edinburgh.
| Please
note: Companies House does not accept accounts or any
other statutory documents by fax. |
Companies House will
only acknowledge the receipt of documents if you provide a
stamped addressed envelope.
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.
Forms can also be
obtained from legal stationers, accountants, solicitors and
company formation agents - addresses in business phone books.
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