Board Minutes & Shareholder Resolution to Consolidate Share Capital

In order for a company to consolidate its share capital, there are a number of procedural requirements that the company must first comply with. The relevant steps for consolidating sub-dividing the share capital are set out below.

1. The company will need to convene a meeting of its board of directors at which the directors resolve to approve the consolidation of the share capital of the company subject to shareholder approval.

2. Once the board has approved the consolidation of the share capital, the meeting of the board of directors will be adjourned temporarily to allow the shareholders to consider the resolution put to them by the board in relation to the consolidation of the share capital. Assuming that the shareholders are happy with the resolution they will be asked to sign it and thereby approve the consolidation of the share capital.

The written resolution must be signed by all shareholders entitled to attend and vote at general meetings of the shareholders.

If all shareholders are not willing to sign the resolution or if the articles of association of the company do not allow for the passing of written resolutions (and the vast majority do), then the Company may still pass the resolution by convening an extraordinary general meeting (“EGM”) of the shareholders. As the resolution required to consolidate the company’s share capital is a special resolution, the resolution at the EGM will need to be approved by in excess of 75% of the votes cast at the meeting (note this is 75%+ of the votes cast at the meeting not 75%+ of the shareholders or 75% of the total number of votes which could have been cast at the meeting had all shareholders voted).

Documents necessary to convene an EGM of a company can be downloaded from www.docudraft.co.uk.

Once the shareholders have approved the resolution to consolidate the share capital of the company, the board of directors will reconvene its meeting and take note of that fact.

3. The directors will instruct the secretary to make the appropriate filings in the Companies Registration Office.

Details of all required filings are set out in this pack.

The documents in this pack have been drafted by solicitors and are easy to complete. They come complete with easy to understand guidance notes and instructions on completing them.

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