Make changes to your private limited company
Get agreement from your company
You usually need to get directors or entitled shareholders to vote (known as ‘passing a resolution’) on whether or not to make some changes.
Things that usually need a resolution include:
- changing your company name
- removing a director
- changing your company’s constitution and articles of association - how your company is run
- changing your company’s share structure
Most resolutions simply need more shareholders to agree than disagree (called an ‘ordinary resolution’). They may be simply done by a show of hands at a meeting. Ordinary resolutions are used for most routine changes, for example, increasing a company’s share capital.
Some decisions, for example changing your articles, might require a 75% or even 95% majority (called a ‘special resolution’ or ‘extraordinary resolution’).
Your company articles will usually tell you if you need a resolution, and what type it should be.
You must let your shareholders (and auditors if relevant) know when there’s going to be a vote on a resolution.
You must file special or extraordinary resolutions with Companies House within 15 days of passing them.
Shareholder voting for special and extraordinary resolutions
When you’re working out the majority in special or extraordinary resolutions you count the number of shares that give the owner the right to vote, rather than the number of shareholders.
Example
A company has 100 shares and 3 shareholders. One shareholder owns 60 shares while the others own 20 shares each. Whatever the shareholder with 60 shares agrees will have a 60% majority.
How to hold a resolution
You do not always need to have a meeting to pass a resolution. If enough shareholders or directors have told you they agree, you can usually confirm the resolution in writing.
You must write to all shareholders letting them know about the outcome of a resolution.