Shareholders’ Ordinary Resolution – Deletion of Authorised Share Capital

PLEASE BE AWARE THAT THE ECONOMIC CRIME & CORPORATE TRANSPARENCY ACT 2023 IS BEING IMPLEMENTED IN PHASES AND MAY CHANGE THIS TEMPLATE. 

This Shareholders’ Ordinary Resolution – Deletion of Authorised Share Capital should be used by companies that wish to amend their articles to remove all reference to an authorised share capital.

At a glance

• Use this only where the company has a legacy authorised share capital restriction and wants to delete it.
• An ordinary resolution is sufficient for this change (unless the articles require a higher majority).
• A copy must be filed with Companies House within 15 days of being passed.

When an authorised share capital restriction may apply

Any company incorporated since 1 October 2009 will have no restriction on its ability to issue and allot shares unless it decides to actively include one.

For companies incorporated before this date, unless the provision has already been removed, it will remain and act as a restriction on the company’s ability to freely issue and allot shares.

Ordinary resolution to remove the legacy provision

To remove this provision (which by virtue of section 28 of the Companies Act 2006 is automatically deemed to form part of the company’s articles of association rather than its memorandum), the company must pass an ordinary resolution of the shareholders.

Normally a special resolution is required to change a provision of the articles of association, so this is an exception to that rule.

This shareholders’ ordinary resolution deletes the relevant paragraph of the articles of association dealing with authorised share capital.

Passing the resolution and using the right format

• At a general meeting: an ordinary resolution requires the votes of over 50% of members present in person or by proxy, who are entitled to vote and do vote at the meeting.
• Notice: the meeting must have had at least 14 days notice, unless a shorter period has been agreed by a majority in number of members holding at least 90% of the shares (95% in the case of public companies).
• Written resolution: the resolution will be passed if approved by shareholders representing not less than 50% of the total voting rights of the shareholders entitled to vote on the written resolution on the day it is circulated.

If it is to be passed at a general meeting, it should be used in conjunction with “Shareholders’ resolutions – General Meeting Format”.

If it is to be passed as a written resolution, it should be used in conjunction with “Shareholders’ Written Ordinary Resolution”.

Companies House filing and when to use something else

A copy of the resolution will need to be filed with Companies House within 15 days of the date of the resolution.

This resolution is only suitable for a company with this legacy provision wishing to delete the restriction on authorised share capital and does not intend to remove other provisions of the memorandum (which are also deemed to form part of the articles by virtue of section 28, such as the objects clause).

If you are looking for a shareholders’ special resolution to make other amendments to the memorandum, please refer to:

Special Resolution for Amendment of Memorandum of Association.

If you need to adopt entirely new articles, please refer to:

Shareholders’ Special Resolution – Adoption of New Articles Of Association.

Shareholders’ Ordinary Resolution – Deletion of Authorised Share Capital is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.