What's a proposed written special resolution: issue shares, remove restrictions & disapply pre-emption rights and when do you need it?
This document is a written resolution of the shareholders’ of the company. It covers various decisions (‘resolutions’) that shareholders may have to take in relation to an allotment of shares. It is usually the directors who will propose the resolutions by circulating this document to the company’s shareholders and asking them to consider and then sign it, to indicate their agreement.
(This document will not be suitable for public companies, who cannot use the written resolution procedure (and who are subject to additional rules when it comes to the allotment of shares).)
A copy of the resolutions 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 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. The decisions set out in this resolution fall into that bracket. Shareholder resolutions are passed at a general meeting of the shareholders or they can be passed by way of written resolution instead. This template assumes you will be using the written resolution procedure as it is generally easier and is less of an administrative burden than holding a general meeting.
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).
In the template here, the resolutions on removal of restrictions on authorised share capital and providing the directors with authority to allot shares, can be passed as ordinary resolutions. Resolutions introducing new articles and/or dis-applying existing shareholder pre-emption rights must be passed as a special resolution.
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 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 resolutions to be passed.
If sufficient agreement is reached, then a director will need to sign a ‘print’ of the resolutions and file it at Companies House within 15 days of the resolutions being passed.