Shareholders' OR - Approve a Substantial Property Transaction

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

This Shareholders’ Ordinary Resolution to Approve a Substantial Property Transaction is for use when a director (or one of his connected persons) sells or buys a substantial non-cash asset to or from the company.

The Companies Act 2006 restricts transfers of substantial assets, unless the transfer is approved by an ordinary resolution of the shareholders. Shareholder approval is required where the value of the asset being transferred is either:

- more than £100,000, or 
- more than 10% of the company’s net assets (by reference to the last set of company accounts), AND the value is more than £5,000.

Transactions beneath these limits do not require shareholders’ approval.

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 was 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 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 Shareholders’ Ordinary Resolution to Approve Substantial Property Transaction in Which a Director has an Interest 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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