Conducting Company Resolutions Correctly: Part 2 – Ordinary Resolutions

Jul 1, 2021

The decision-making rules and procedures that companies must follow are set out in the CA 2006 as well as in the company’s articles of association. Some companies also set out additional or clarify procedures in a shareholders’ agreement therefore, it is important to refer to all relevant documentation to ensure compliance. This article (the second in a series) will focus on Ordinary resolutions, of a company’s members.

Ordinary resolution of the members

An ordinary members resolution is a formal decision requiring approval by more than 50% of the voting shareholders and is usually used for more routine matters that require approval by company members.

The types of decisions that normally require an ordinary resolution of the members include:

  • Appointing a director where required under the articles or ratifying a director appointment
  • Approving the Annual Accounts
  • Approving a final dividend declaration
  • Increasing the authorised share capital (if one has been set)
  • Allotting shares (depending on the authorisation in place).

Additionally, copies of the following ordinary resolutions should be filed at Companies House:

  • Granting authority to the directors to allot shares
  • Renewing, varying, or revoking directors’ authority to allot shares
  • Authorising the company to purchase its own shares
  • Renewing, varying, or revoking authority of the company to purchase its own shares
  • The redenomination of shares

Ordinary resolutions are either voted on at general meetings such as an AGM (Annual General Meeting), at a General Meeting of the members or passed by written resolution. Where a resolution is proposed at a meeting of the members, they will conduct their votes on a show of hands, unless the articles state by proxy where each shareholder has one vote, or a proxy is called whereby the number of shares held will come into play. An ordinary resolution is passed when more than 50% of all votes are cast in favour of the motion, unless a higher majority is required pursuant to the company’s articles.

It is important to note that two decisions that can be made through an ordinary resolution, include additional requirements pursuant to the CA 2006:

  • The removal of a director before the end of their term of appointment; and
  • The removal of an auditor before the end of their term of appointment

For information relating to resolutions passed by way of written resolution – keep a lookout for our upcoming article. The next article will discuss the rules and requirements surrounding special resolutions.

For further information regarding company secretarial matters or corporate governance aspects of your company, please feel free to contact Michelle.Lamberth@herrington-carmichael.com

This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to your own particular matter before action is taken.

Michelle Lamberth

Michelle Lamberth

Senior Paralegal, Corporate and Commercial Law

Senior Paralegal, Corporate and Commercial Law
t:
 0118 989 9706
e: michelle.lamberth@herrington-carmichael.com

Sign up

Enter your email address for legal updates on Corporate and Commercial law.

Please see our privacy policy regarding use of your data.


Latest Articles

Podcasts

The Legal Room UK Podcast features a diverse range of specialists offering expertise on a variety of topics. 
Subscribe on whatever podcast platform you use.

Top Legal Insights

 

Contract Law

Material Breach of Contract

What is a ‘material’ breach of contract by a party to a commercial contract? This is a critical issue regularly considered by the courts. What constitutes a material breach and what are the remedies?

Property Law

Commercial Lease: The Financial impact on Landlord and Tenant

Coronavirus (COVID-19) and the restrictions now in place to control its spread, are having a significant effect on many business sectors.

Divorce and Family Law

Divorce in Lockdown: Can I get some discreet legal advice?

We have spoken to clients who are unfortunately experiencing some family issues, and would like to obtain expert legal advice, yet don’t know how...

Land & Property Dispute

Restrictive Covenants – The Price of Modification

Having identified that your land is burdened by a restrictive covenant and for the purposes of this article the covenant in question will be that only one residential building can be erected on the land. What do you do next?

Wills, Trusts and Probate

Why is having a will so important?

It is entirely up to you if and when you want to create a Will, but it is important to be aware of the consequences of not having a Will.

Award winning legal advice

Herrington Carmichael offers legal advice to UK and International businesses as well as individuals and families. Rated as a ‘Leading Firm 2024’ by the legal directory Legal 500 and listed in The Times ‘Best Law Firms 2023 & 2024’. Herrington Carmichael has offices in London, Farnborough, Reading, and Ascot.

+44 (0)1276 686 222

Email: info@herrington-carmichael.com

Farnborough
Brennan House, Farnborough Aerospace Centre Business Park, Farnborough, GU14 6XR

Reading (Appointment only)
The Abbey, Abbey Gardens, Abbey Street, Reading RG1 3BA

Ascot (Appointment only)
102, Berkshire House, 39-51 High Street, Ascot, Berkshire SL5 7HY

London (Appointment only)
60 St Martins Lane, Covent Garden, London WC2N 4JS

Privacy Policy   |   Legal Notices, T&Cs, Complaints Resolution   |   Cookies  |   Client Feedback   |  Diversity Data

 

 

Our Services

Corporate Lawyers
Commercial Lawyers
Commercial Property Lawyers
Conveyancing Solicitors
Dispute Resolution Lawyers
Divorce & Family Lawyers
Employment Lawyers
Immigration Law Services
Private Wealth & Inheritance Lawyers
Startups & New Business Lawyers

Pay Online >

Please be aware that we have no plans to change our bank details. If you receive any indication that any of our bank details have changed please contact us before sending us any funds. We take no responsibility for monies you transfer into the wrong bank account.

© 2024 Herrington Carmichael LLP. Registered in England and Wales company number OC322293.

Herrington Carmichael LLP is authorised and regulated by the Solicitors Regulation Authority with registration number 446245.