• Skip to main content
  • Skip to footer

Cheyney Goulding

Cheyney Goulding Solicitors

t: 01483 56 76 76   e: legal@cheyneygoulding.co.uk

alt-text

  • Home
  • About
  • Business Services
  • Wealth Management
  • Team
  • Contact
  • Insights

Shareholder decision-making

04/02/2021 by Joel Wish

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

Shareholder decision-making

 

The day-to-day management of a company is typically carried out by the appointed directors.  These individuals exercise all powers of the company and make decisions at meetings of the board of the directors. 

Shareholders do not necessarily have any direct say in the day-to-day management of the company; however, the interests of the members are safeguarded by the Company Act 2006.  Certain corporate decisions are reserved and require approval from the shareholders.  It should be noted that these provisions must always be read alongside the company’s own articles of association which may prescribe a different procedure, such as approval from a higher majority or unanimity of eligible shareholders.  

Shareholder approval is sought by either of two types of resolution:

  1. Ordinary Resolution – passed by a simple majority (i.e over 50%) of the members voting in favour; and
  2. Special Resolution – passed by a majority of not less than 75% of votes.

Below, are a selection of matters the Companies Act 2006 require a private company limited by shares to pass an Ordinary or Special Resolution:

ORDINARY RESOLUTIONS

  • Approval of a director’s long-term service contract, i.e a contract which guarantees a director’s employment for more than 2 years.
  • Approval of loans to directors.
  • Ratifying a director’s breach of fiduciary duty, except where the acts were dishonest or where the relevant act was unlawful or unauthorised.
  • Removal of directors from office against their will.
  • Approval of payments compensating directors for loss of office.
  • Approval of ‘substantial property transactions’.  This is when a director, or someone connected to them) buys from or sells to the company a non-cash asset, the value of which is either more than £100,000; or more than 10% of the company’s net assets and the asset’s value is more than £5,000.
  • Authorise directors to allot shares (unless the company’s articles already empower directors to do so).
  • Approving the company to buy-back its own shares.

SPECIAL RESOLUTIONS

  • Amend the company’s articles of association.
  • Change the company’s name.
  • Disapply pre-emption rights, i.e the obligation for shareholders selling/transferring their shares to initially offer to all other existing shareholders.
  • Reduce the company’s share capital.
  • Approve the purchase of the company’s own shares using the company’s own capital, as opposed to distributable profits.  The Directors will also need to provide a statement that the company will remain solvent for 12 months following the purchase.

Please note, this guide is for general information only and does not constitute legal advice.  If you would like to discuss anything in this article, please get in touch. 

 

Filed Under: General

Footer Widget Header

 

Footer

Site map

  • Home
  • About
  • Team
  • Insights
  • Careers

© 2025 Cheyney Goulding LLP

Business Services

Business services

  • Commercial Agreements
  • Commercial Property
  • Corporate & M&A
  • Data Protection & Privacy
  • Dispute Resolution & Litigation
  • Employment
  • Finance, Lending & Security
  • Information Technology
  • Intellectual Property

Wealth Management Services

Wealth management

  • Inheritance Tax Planning
  • Later Life Planning & Care Home Fees
  • Powers of Attorney
  • Probate & Estate Administration
  • Trusts
  • Wills
  • Residential Property
  • Contentious Probate & Will/Inheritance Disputes
  • Court of Protection Advice & Applications

Contact

Phone Number:   01483 56 76 76

Fax Number:   +44(0)1483 30 05 38

Email:   legal@cheyneygoulding.co.uk

More

More

  • Complaints handling policy
  • Prices & services information
  • Privacy policy
  • Privacy notice
  • Cookie policy

Cheyney Goulding LLP is a limited liability partnership registered in England and Wales with registered number OC329864 and VAT number 641411771. The registered office and principal place of business is at Ward House, 6 Ward Street, Guildford, GU1  4LH. The members are G.R. Young and T.M. Marshall.

Cheyney Goulding LLP is authorised and regulated by the Solicitors Regulation Authority and our professional code of conduct can be accessed here.

Brand and Website by Supafrank. Photography by Matt Wreford