Shareholders’ Ordinary Resolution – consolidation & sub-division

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.

Use this ordinary resolution to approve a consolidation or sub-division

This Shareholders’ Ordinary Resolution – consolidation & sub-division is the shareholder resolution required to approve a share consolidation or sub-division following its recommendation at a board meeting.

Type of resolution and articles check

• For most companies, including those with model articles, shareholder approval is by ordinary resolution only.
• The Companies Act 2006 does not specify the type of resolution required, so (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.

Assumptions this template is drafted on

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

How the resolution can be passed

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

Shareholders’ Ordinary Resolution – consolidation & sub-division is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.