What Is a Special Resolution to Change the Articles?

A special resolution is a formal decision made by a company’s shareholders to approve changes to its Articles of Association. It normally requires at least 75% shareholder approval under the relevant voting procedure.

A UK company generally cannot amend or replace its Articles using an ordinary resolution or a directors’ decision alone.

Why Is a Special Resolution Required?

The Articles contain the company’s constitutional rules. They govern important matters such as:

• Directors’ powers
• Shareholder voting
• Company meetings
• Share transfers
• Share-class rights
• Dividends and distributions
• Appointment of directors

Because changes can significantly affect how the company is controlled, section 21 of the Companies Act 2006 generally requires shareholders to approve them by special resolution.

What Does 75% Approval Mean?

The approval calculation is based on voting rights, not necessarily the number of individual shareholders.

For example, suppose a company has 100 ordinary voting shares:

• Shareholder A owns 60 shares
• Shareholder B owns 25 shares
• Shareholder C owns 15 shares

If all shareholders vote, Shareholder A cannot pass the resolution alone because 60% is below the required 75%. However, Shareholders A and B together control 85% and could normally approve it.

The precise calculation depends on whether the resolution is passed at a meeting or as a written resolution.

How Can a Special Resolution Be Passed?

A private limited company can normally pass a special resolution in one of two ways.

At a general meeting

The company calls a shareholder meeting and gives the required notice. The notice must state that the proposal will be considered as a special resolution.

At least 75% of the votes cast by shareholders entitled to vote must normally support the resolution.

As a written resolution

A private company can circulate the special resolution to eligible shareholders without holding a meeting.

Shareholders representing at least 75% of the total voting rights of eligible members must normally approve it.

The company should keep evidence of each shareholder’s approval and the date on which the required majority was reached.

What Should the Resolution Contain?

The special resolution should clearly identify the proposed change.

It may state that the company will:

• Amend a specified clause
• Add a new clause
• Remove an existing provision
• Replace the existing Articles completely
• Adopt new customised Articles

A simple resolution may be worded as follows:

Special Resolution
That the Articles of Association attached to this resolution be adopted as the Articles of Association of the company in substitution for, and to the exclusion of, the company’s existing Articles.

This is only a general example. The wording should be adapted to the company’s circumstances and proposed amendments.

Do All Shareholders Need to Agree?

No. Unanimous approval is not usually required. The resolution can generally pass once the required 75% threshold is reached.

However, additional or unanimous approval may be required if:

• The existing Articles contain an entrenched provision
• A shareholders’ agreement requires a higher level of consent
• The amendment varies rights attached to a class of shares
• The change would increase a shareholder’s liability
• A court, regulator or specific law imposes additional conditions

The company should review its current Articles and shareholders’ agreement before circulating the resolution.

Can Directors Pass the Special Resolution?

No. A special resolution is a shareholder decision.

The directors may:

• Recommend the proposed changes
• Approve the draft for circulation
• Call a general meeting
• Send a written resolution
• Arrange the Companies House filings

However, the shareholders must provide the required approval.

Can a Sole Shareholder Pass a Special Resolution?

Yes. A company with one shareholder can normally pass a written special resolution.

The sole shareholder should formally approve the resolution, and the company must retain a copy with its records and complete the required Companies House filings.

What Happens After the Resolution Is Passed?

After shareholder approval, the company should:

1. Record the date and voting result.
2. Keep the resolution with its statutory records.
3. Produce a complete copy of the amended Articles.
4. File the resolution with Companies House.
5. File the amended Articles with Companies House.
6. Submit any additional forms required by the changes.
7. Update the company’s internal records and procedures.

According to Companies House guidance, the special resolution must normally be filed within 15 days after it is passed. The amended Articles must normally be filed within 15 days after taking effect.

When Do the Changes Take Effect?

The amendments normally take effect when the special resolution is passed unless:

• The resolution specifies a later date
• A court or regulatory approval is required
• A specific legal rule provides otherwise

The effective date should be clearly recorded.

Are Additional Forms Required?

Possibly. Additional Companies House filings may be required if the amended Articles:

• Create a new class of shares
• Change rights attached to existing shares
• Alter the company’s share capital
• Change the company’s objects
• Result from a court or regulatory order

Changing the Articles does not replace any separate filing obligations connected with the underlying transaction.

What If the Resolution Does Not Receive 75% Approval?

If the required threshold is not reached, the special resolution does not pass and the proposed amendments cannot normally take effect.

The company may revise the proposal and ask shareholders to vote again, provided it follows the correct notice and approval procedures.

Summary

A special resolution is the formal shareholder approval normally required to amend or replace a UK company’s Articles of Association. It generally requires at least 75% approval under the applicable voting procedure.

A private company can usually pass the resolution at a general meeting or in writing. After approval, the company must file the resolution and amended Articles with Companies House—normally within 15 days.

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

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