Shareholders and Company Governance

1. 01

   Build the company's real rulebook

   Start with the company's actual documents, not only the shareholding percentages shown at Companies House.

   • Three layers of rules. The Companies Act sets mandatory rules, the articles form the company's constitution, and a shareholders agreement creates contractual rights between its parties.
   • Extra controls. Class rights, accession deeds, earlier resolutions and side letters may add further controls on top of the main documents.
   • One decision matrix. Build a single matrix covering director appointments, reserved matters, voting thresholds, quorum, pre-emption, transfers, leavers and deadlock.
   • Reconcile the records. Confirm the company signed the shareholders agreement, that later shareholders joined it, and that the register of members agrees with the cap table and share certificates.

   A shareholders agreement does not simply override the articles or the Act. Read the documents together before relying on any percentage or veto.

   Checks to make

   • Retrieve every current version of the articles, shareholders agreement and accession deeds.
   • Reconcile the register of members, cap table and share certificates.
   • Record each consent, veto, class right and decision threshold in one matrix.
2. 02

   Identify who must approve the decision

   Classify the proposed action before preparing a resolution. Who approves it depends on what the decision actually is.

   • Directors or shareholders. Day-to-day management usually belongs to directors. Legislation, the articles or reserved matters may require shareholder or class approval instead.
   • Voting thresholds. An ordinary resolution generally needs a simple majority of votes cast. A special resolution generally needs at least 75%. Custom documents can require more.
   • Written resolutions. Private companies can pass many decisions by written resolution, but the statutory procedures for removing a director or auditor cannot use that route.
   • Pin down the process. Identify the specific power, eligible voters, quorum, notice period and approval threshold before anything is circulated.

   Check whether a director's interest affects their right to vote or count in quorum under the company's articles.

   Checks to make

   • Describe the proposed action precisely and identify its authorising provision.
   • Confirm who can attend, vote and count towards quorum.
   • Check whether board, shareholder or separate class approval is required.
3. 03

   Run a defensible process

   A sensible decision can still be challenged if the process behind it is defective.

   • Meeting mechanics. Check who may call the meeting, the required notice, agenda, quorum, voting eligibility, proxy rules and any separate class vote.
   • Directors' duties. Directors must act within their powers, exercise independent judgement, promote the company's success and manage conflicts. The articles determine whether an interested director may vote or count in quorum.
   • Removing a director. Removal under section 168 of the Companies Act requires a meeting, an ordinary resolution and special notice. The director has statutory rights to receive notice and make representations.
   • Honest records. Record disclosed interests and dissent accurately in the minutes.

   Do not backfill minutes or rely on informal agreement unless the applicable route permits it.

   Checks to make

   • Issue compliant notice with the agenda and supporting papers.
   • Document conflicts before discussion or voting begins.
   • Preserve signed minutes, resolutions, proxies and written consents.
4. 04

   Implement the decision and contain disputes

   Finish the legal act, not only the vote. Registers, filings and identity checks all carry deadlines.

   • Registers and filings. Update the register of members and share certificates where relevant, notify Companies House of director and PSC changes, and file resolutions or amended articles within the applicable deadlines.
   • Keep records. Companies must keep records of shareholder resolutions and meetings for at least ten years.
   • New appointments. New directors must verify before incorporation or appointment and provide their code in that filing. A PSC added after 18 November 2025 may provide the code when added or within 14 days.
   • Existing roles. Existing directors provide their code through the next confirmation statement. Existing PSCs use the PSC verification service in their role-specific 14-day window. A person who is both director and PSC submits separately for each role.
   • If a dispute emerges. Preserve board papers and communications, avoid unnecessary value transfers, follow the agreed deadlock or exit process, and obtain advice before issuing shares, removing people or moving assets.

   Checks to make

   • Create a dated completion, register and filing checklist.
   • Check the identity verification deadline for every director and PSC role.
   • Preserve evidence and activate the agreed dispute process before taking irreversible action.

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