Template Shareholders’ Ordinary Resolution – share splits & reverse share splits

Shareholders’ Ordinary Resolution – consolidation & sub-division

CO.SCSD.03
The consolidation & sub-division of share capital are the means by which a company may consolidate or sub-divide all or any part of its share capital in accordance with section 618 of the Companies Act 2006. Further details about what consolidation & sub-division are, why they may be undertaken and the procedure to be undertaken is available in our Guidance Note.

This Shareholders’ Ordinary Resolution – consolidation & sub-division is the shareholder resolution required in order to approve a share consolidation or sub-division following its recommendation at a board meeting. For most companies, including those with model articles, a share consolidation or sub-division requires the approval of shareholders by ordinary resolution only. This is because the Companies Act 2006 does not specify the type of resolution required therefore unless the company’s articles require a higher majority or prevent it, an ordinary resolution is sufficient. You must check the company’s articles of association before considering this procedure.

This ordinary resolution has been drafted on the basis that:

• It is for use by a private company with only one class of shares where all the shares are fully paid up;
• There are no restrictions in the company’s articles preventing or restricting a consolidation or sub-division;
• There are no conditions attached to the consolidation or sub-division; and
• The proposed consolidation or sub-division will not result in any fractional entitlements.

This resolution can be passed either as a written resolution or at a general meeting of the shareholders.

This Shareholders’ Ordinary Resolution is in open format. The requisite details should be inserted into the highlighted fields or the wording can be adjusted to suit your purposes. Wording in square brackets is optional. If it is required, then the brackets should be deleted and the wording within them retained. If the wording is not required, then it can be deleted.

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