Amending Share Capital (Shareholder Resolution)
This document is a template with guidance notes for shareholder resolutions relating to changes in a company’s share capital, setting out when ordinary or special resolutions are typically required under UK company law. It provides example resolution wording for common share capital actions and explains how multiple resolutions and amended articles are often used together in a single transaction.
Change to Share Capital
See suggestions below for where special vs ordinary resolutions are generally required, subject to the articles and shareholders' agreement, etc.. Choose the appropriate change and amend if necessary.
Amended articles are usually required for changes such as a creation of a new class of shares, variation of class rights, or a change in share capital structure that affects shareholder rights. Draft amended articles should be prepared and circulated to shareholders before the resolution is passed.
Many transactions require multiple resolutions together, for example:
Special resolution, used to create a new share class and amend articles
Ordinary resolution, used to authorise directors to allot those shares
Special resolution, used to disapply pre-emption rights
Companies House filings are usually required after such resolutions are passed. These may include:
copies of the resolutions,
updated articles of association, and
forms reflecting the new share capital.
Failure to file on time can invalidate the change or result in penalties.
IT IS RESOLVED THAT:
Reduction in Share Capital
Special resolution required. Reductions must follow the statutory procedure (including solvency statement or court approval, depending on the method).
Subject to and in accordance with sections 641 to 644 of the Companies Act 2006, the issued share capital of the Company be reduced from [described reduction].
New Class of Shares
Special resolution required, alongside an amendment to the Articles setting out the new class rights.
A new class of shares designated as [name of new class of shares] be created with the rights and restrictions set out in the amended articles of association produced to the meeting, and that the share capital of the Company be increased accordingly.
Variation of Class Rights
Special resolution required, alongside approval of the affected class (often by special resolution of that class).
Subject to the consent of the holders of the [type of shares being varied] Shares in accordance with the Articles and section 630 of the Companies Act 2006, the rights attaching to the [type of shares being varied] Shares be varied as follows: [description of share variation], and that the Articles be amended accordingly.
Consolidation of Shares
Ordinary resolution (unless Articles say otherwise). Use, for example, where 10 shares of £0.10 become 1 share of £1.00.
The issued ordinary shares of the Company be consolidated on the basis that [describe consolidation], and that the directors be authorised to make such arrangements as they consider necessary to deal with fractional entitlements.
Subdivision of Shares
Ordinary resolution (unless Articles say otherwise). Use. for example, where 1 share of £1.00 becomes 10 shares of £0.10.
Each issued [description of subdivision], such shares having the same rights and being subject to the same restrictions as the existing ordinary shares.
Cancellation of Shares
Ordinary resolution. This does not reduce issued share capital, only authorised/unissued capital (if relevant under older articles).
The shares in the capital of the Company which have not been taken or agreed to be taken be cancelled, and that the share capital of the Company be reduced by the nominal amount of the shares so cancelled.
Increase of Share Capital
Ordinary resolution, where still relevant. Note: “authorised share capital” is no longer mandatory, but older articles may still require this.
The share capital of the Company be increased from [describe increase].
Authority to Allot Shares
Ordinary resolution. Does not itself change capital. Often paired with a special resolution to disapply pre-emption rights.
Pursuant to section 551 of the Companies Act 2006, the directors be generally and unconditionally authorised to allot shares in the Company up to an aggregate nominal amount of £[amount of shares directors have authority to allot], such authority to expire on [date of expiration of direction authority] unless renewed earlier.
General Authority
The Articles of the Company be hereby amended as necessary to reflect this change, and the directors be authorised to take all actions and file all documents necessary to give effect to this resolution.
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This version is drafted for England & Wales. Scotland and Northern Ireland differ on some points — for example notice periods and tribunal procedure. Tell GitLaw where you hire and it adjusts the draft.
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