Company Approvals

Question 1

Appointment of directors - approval required

Answer 1

• Ordinary resolution by shareholders (MA 17)
• Decision by the board (MA 17)

Question 2

Approval required for removal of directors

Answer 2

• Ordinary resolution by shareholders
• Exceptions: director can vote as a shareholder on their removal

Question 3

Approval required for granting long-term service contracts

Answer 3

• Ordinary resolution by shareholders for contracts > 2 years
• Exception: approval not required for wholly-owned subsidiaries

Question 4

Approval required for substantial property transactions

Answer 4

• Ordinary resolution by shareholders

Exceptions:
-approval not required if transaction is under £5,000 or if asset is less than 10% of net assets
- wholly-owned subsidiaries exempt from approval

Question 5

Approval required for loans to directors

Answer 5

• Ordinary resolution by shareholders

Exceptions:
- expenditure on company business < £50,000
- loans for defending proceedings/regulatory actions

Question 6

Approval required for quasi-loans and credit transactions (public companies or companies associated with public companies)

Answer 6

Ordinary resolution by shareholders

Exceptions:
- minor transactions: loans up to £10,000, credit transactions up to £15,000
- intra-group transactions

Question 7

Approval required for guarantees or security for director loans

Answer 7

Ordinary resolution by shareholders

Exceptions:
- money lending companies are exempt if loan is part of ordinary business
- wholly-owned subsidiaries exempt

Question 8

Approval required for changing company name

Answer 8

Special resolution by shareholders (unless articles state otherwise)
- board may decide if the articles allow

Question 9

Approval for amendment of articles of association

Answer 9

Special resolution by shareholders

Question 10

Shareholder approval for a conflict of interest

Answer 10

Ordinary resolution by shareholders
- Exception: cannot approve unlawful acts

Question 11

Approval for director disqualification

Answer 11

Court decision under Company Directors Disqualification Act

Question 12

Approval for director retirement by rotation

Answer 12

Shareholders’ annual re-election required for listed companies

Question 13

Delegation of authority to other directors or committees

Answer 13

Decision by the board

Question 14

Transactions with connected persons (public companies)

Answer 14

Ordinary resolution by shareholders
- Exemptions for small transactions and intra-group transactions

Question 15

Approval of directors’ service contracts

Answer 15

Ordinary resolution by shareholders
- Approval not required if company is a wholly-owned subsidiary

Question 16

Disclosure of directors’ interests in transactions

Answer 16

No approval needed, but must disclose interest
- director does not need to declare if other directors are already aware