Shareholders’ Ordinary Resolution – Deletion of Authorised Share Capital

IN LIGHT OF THE ECONOMIC CRIME & CORPORATE TRANSPARENCY ACT 2023, THIS TEMPLATE IS CURRENTLY UNDER REVIEW. 

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

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. However for companies incorporated before this date, unless this provision has already been removed, it will remain and act as a restriction so on its ability to freely issue and allot shares.

In order 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. Note that 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. Remember that a copy 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 s.28 as described above, 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 Resolutions require the votes of over 50% of members present in person or by proxy, who are entitled to vote and do vote at the meeting. The meeting at which the resolution is proposed 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).

Alternatively, the written resolution procedure can be used, and 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.

This document sets out the required wording of the shareholders’ ordinary resolution. 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”.

This template is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.

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