Proposed written special resolution

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What's a proposed written special resolution and when do you need it?

This document is a written special resolution. It is usually the directors who will propose a special resolution by circulating this document to the company’s shareholders and asking them to consider and then sign it, to indicate their agreement.

A copy of the resolution must be sent to all shareholders who are entitled to vote and at the same time, to the auditors of the company (if there are any).

Under UK company law, while the directors of the company are generally able to take all most day to day decisions in running the company, certain decisions cannot be taken by the directors and must be taken by the shareholders passing a “resolution” instead. A shareholder resolution is passed at a general meeting of the shareholders or it can be passed by way of written resolution instead.

A resolution can be:

– ‘ordinary’ (requiring a simple majority of votes – in order words, votes by shareholders representing more than 50% of the total voting rights or

– ‘special’ (requiring at least 75% of the total voting rights)

Assuming they agree with what is proposed by the directors, shareholders must sign the document to officially record their agreement to it and return it to the company.

If they don’t agree to pass it, they do not sign and return it and after 28 days, their non-reply is formally treated as lack of consent.

The board of directors must obtain the requisite number of shareholder consents for the proposed special resolution to be passed.

If sufficient agreement is reached, then a director will then need to sign a ‘print’ of the resolution and file it at Companies House within 15 days of the resolution being passed.