Company formation Registration - HOME

Directors and secretaries
Change of registered office
Company records
Resolutions
Change of company name
Change of constitution
Share capital
Re-registration of a company
Charges & mortgages (England and Wales, Northern Ireland)
Charges and mortgages (Scotland)
Quality of documents
Further information


Resolutions


1. What is a resolution?

A resolution is an agreement or decision made by the members, a class of members, or the directors of a company to carry out certain changes. This could include resolving to change the name of the company, to alter its share capital or to change its articles.

2. How do companies pass resolutions?

The company’s members vote on whether to pass or reject a proposed course of action. Each member’s voting power will usually depend on the number of shares he or she owns. In most cases, a member who owns one share has one vote. The resolution is passed when the pre determined majority required for the passing of the resolution is reached (e.g. 75% of the members for a special resolution changing the company’s name). If the necessary majority is not obtained, then the proposed resolution fails.

3. Who can vote?

The company’s articles of association may state the conditions on members’ voting rights, but generally a member will have one vote for each share he or she holds on a written resolution or one vote on a show of hands at a general meeting unless a poll is called. If someone validly calls for a poll at a general meeting, then each member has one vote for each share that he or she holds.

If a member is unable to be present at the meeting, he or she may appoint a proxy to vote for them. In the case of joint holders of shares it is the vote of the holder named first in the register of members that will be counted, unless the company’s articles say something different.

4. Who must receive copies of the resolution before and after approval?

The company must circulate notice of the intention to propose a resolution to its members. If a company has auditors, it must send copies or otherwise notify them of the contents of all proposed resolutions. The Companies Act requires that you deliver certain resolutions (for example any special resolution) to Companies House within 15 days of passing them.

5. Private Companies and the passing of resolutions

Private companies can pass resolutions:

by a written resolution, which they must circulate to every eligible member electronically or by hard copy, or
by taking a vote at a meeting of members.
The Companies Act has the effect that private companies no longer have to hold Annual General Meetings (AGMs). New provisions regarding written resolutions enable private companies to dispense with general meetings altogether, except for two limited purposes (see question 6 below).

6. Written resolutions and private companies

Private companies can pass almost all resolutions as written resolutions, e.g. a resolution that has been circulated, either on paper or electronically, to the members without the need for a meeting.

Exceptions to this are:
a resolution to remove a director: and
a resolution to remove an auditor.
These resolutions need to be passed at a general meeting.

7. Public companies and the passing of resolutions

Public companies have to hold AGMs within 6 months of their financial year ends in addition to any other meetings held during that period. A public company can only pass a resolution by taking a vote at a meeting of the members, which may be the AGM. It cannot pass a written resolution.

8. What records of resolutions and meetings does the company need to keep?

The company must keep minutes of all proceedings at general meetings or decisions made by a sole member. They must also keep copies of all resolutions of members passed other than at general meetings. They must keep these records for 10 years and make them available for inspection by members on request.

9. Resolutions and meetings

The vote on a resolution in a general meeting is by a show of hands unless the members call for a poll. A poll is a vote based on the number of shares held by people rather than on a show of hands. 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, but this does not apply if the members call for a poll. You do not have to count the number of votes for or against on a show of hands.

A private company must give a minimum notice of 14 days of a general meeting. A public company must give a minimum of 21 days notice of its AGM unless the company’s articles specify a longer period of notice. A company may call a general meeting at shorter notice, with a majority of 90% of the voting rights in the case of a private company and 95% in the case of a public company. This does not apply to AGMs of a public company, where all members must agree. Notices for public companies’ AGMs must state that the meeting is an AGM.

Companies may give notice of a meeting:

by electronic form;
in hard copy form;
by means of a website; or
a combination of any of the above.
The notice must state the time, date and location of the meeting and any resolutions to be agreed.

10. Further information on resolutions

You can find further information on resolutions and meetings in the Companies Act 2006 Part 13.