Shareholder resolutions

The following Corporate practice note provides comprehensive and up to date legal information covering:

  • Shareholder resolutions
  • Proposing a shareholders' resolution
  • Passing shareholder resolutions
  • Ordinary resolutions
  • Ordinary resolutions requiring special notice
  • Special resolutions
  • Articles of association
  • Informal consent or assent—the Duomatic principle
  • Sole members
  • Amending resolutions at the general meeting (or AGM)
  • More...

Shareholder resolutions

The agreement of the members of a company is required to make certain changes to a company, such as amending its constitution, name or share capital, or for the company to carry out certain actions, such as entering into a substantial property transaction with a director or making a political donation. In this way, the Companies Act 2006 (CA 2006) safeguards the interests of the members (the owners of the company) by ensuring that the directors (the management of the company) seek the members' authorisation before making such changes and actions.

The members of a company will give their agreement or authorisation by passing what is known as a 'shareholder resolution'. The statutory provisions regarding shareholder resolutions are contained in CA 2006, Pt 13.

There are two main types of shareholder resolution: 'ordinary' and 'special'. There are specific ordinary resolutions which require 'special notice'. It is also possible for a company's articles of association to require that certain resolutions are passed with a specific majority or unanimity. A company's members are also able to make decisions by way of informal unanimous consent or assent (also known as the Duomatic principle). Each of these types of resolution are considered in detail in this Practice Note.

Proposing a shareholders' resolution

Generally, a company's directors will propose resolutions to be passed by the shareholders, whether in a meeting or by

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