Can a Shareholder Vote on Company Decisions?

Yes. A shareholder in a UK limited company can usually vote on important company decisions if their shares carry voting rights.

The number of votes available depends on the share class, the company’s Articles of Association and the terms on which the shares were issued.

What decisions can shareholders vote on?

Shareholders may vote on matters such as:

• Appointing or removing directors
• Changing the company’s Articles
• Changing the company name
• Approving certain share issues
• Disapplying pre-emption rights
• Approving a company purchase of its own shares
• Changing share class rights
• Winding up the company
• Approving certain transactions involving directors

Routine business decisions are normally made by the directors rather than the shareholders.

Does every share provide a vote?

No. Ordinary shares commonly carry one vote per share, but companies can issue shares with different rights.

A share may provide:

• One vote per share
• Multiple votes per share
• No voting rights
• Votes only on certain decisions
• Voting rights triggered by a particular event

Shareholders should check the company’s Articles and statement of capital to confirm their rights.

How do shareholders vote?

Shareholders can usually vote:

• At a general meeting
• Through a written resolution
• By appointing a proxy to vote for them
• Electronically, if the company’s procedures allow it

The company must follow the notice, eligibility and voting procedures in the Companies Act and its Articles.

What is an ordinary resolution?

An ordinary resolution is generally passed when it receives more than 50% of the eligible votes cast.

It may be used for decisions such as appointing a director or approving certain routine shareholder matters.

What is a special resolution?

A special resolution normally requires at least 75% of the eligible votes cast.

It is required for significant decisions such as:

• Amending the Articles of Association
• Changing the company’s registered name
• Disapplying certain pre-emption rights
• Reducing share capital
• Voluntarily winding up the company

The company may need to file a copy of the resolution with Companies House.

Can a minority shareholder vote?

Yes. A minority shareholder can vote if their shares carry voting rights.

However, they may not have enough votes to determine the result independently. The Articles or a shareholders’ agreement may provide additional protections by requiring their consent for certain important decisions.

Can non-voting shareholders participate?

A non-voting shareholder normally cannot vote on general company decisions.

However, they may still have rights to receive dividends, obtain certain company information and receive capital when the company is wound up. They may also have a right to vote when a proposal affects the rights attached to their particular share class.

Can a shareholder vote if they are also a director?

Yes. A person can vote as a shareholder and also participate in board decisions as a director.

These are separate roles. Their shareholder vote is based on the rights attached to their shares, while their director authority comes from their position on the board.

Final answer

A shareholder can vote on UK company decisions when their shares carry voting rights. Ordinary shares commonly provide one vote per share, but non-voting, conditional and enhanced-voting shares are also possible.

The company’s Articles, statement of capital and share terms should always be checked before calculating voting power or passing a resolution.

This article provides general information and does not constitute legal or financial advice.

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