Shareholders’ Ordinary Resolution – Removal of Authorised Share Capital
Authorised share capital (ASC) as a concept existed under the Companies Act 1985. ASC was abolished under the Companies Act 2006. Therefore, a company incorporated under the Companies Act 2006 will have no such concept in their articles and will be able to allot and issue unlimited shares, unless the company has actively included a restriction in their articles of association.
Under the Companies Act 1985, the ASC was set out as a restriction in a company’s memorandum of association. Following the introduction of the Companies Act 2006, this provision was notionally transferred to a company’s articles (by virtue of section 28 Companies Act 2006), as the memorandum became a historic document of incorporation only.
From 1 October 2009, any restriction contained in the memorandum on ASC in a company incorporated under the Companies Act 1985 may be removed by an ordinary resolution in accordance with paragraph 42(2)(b), Schedule 2, Companies Act 2006 (Commencement No.8 Transitional Provisions and Savings) Order 2008.
This template relates to this situation only. This ordinary resolution may be passed at either a general meeting or by a written resolution of the members. This template is only suitable for a private company. This resolution must be filed with Companies House within 15 days after it is passed.
Our template to pass a resolution by the written resolution procedure can be accessed here .
For a company incorporated under the Companies Act 2006 with such a restriction included in their articles now looking to remove the restriction, this is a change to their articles and like any other change to the articles, will require a special resolution.
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