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Ordinary resolutions—checklist

Ordinary resolutions—checklist This checklist presents three key tables: • Resolutions specified as ordinary resolutions under CA 2006 • Resolutions which are commonly passed as ordinary resolutions, and • Ordinary resolutions which must be filed with Companies House Ordinary resolutions The Companies Act 2006 (CA 2006) specifies certain matters that must be effected by ordinary resolution (ie simple majority) passed by the members of a company, eg the removal of a director. CA 2006 also specifies certain matters which must be effected by special resolution of the company or where the relevant threshold for effecting a matter is 75%. Where CA 2006 states that something must be done by passing a resolution but does not specify what type of resolution, an ordinary resolution will be adequate (unless the articles of association specify any higher majority or unanimity). Note that: • anything done by ordinary resolution may also be done by special resolution, and • in addition to complying with the requirements of CA 2006 and the company's articles of association (which...

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Subsidiary companies—audit exemption

STOP PRESS: A significant restructuring of the UK listing regime came into effect on 29 July 2024 which included the removal of the premium and standard listing segments and the creation of a single listing category for equity shares in commercial companies. The commercial companies category is heavily disclosure-based and sits alongside other listing categories such as the shell companies, secondary listing and closed ended investment fund categories. A new UK Listing Rules sourcebook came into force to implement the changes and the previous Listing Rules sourcebook was revoked. For further information, see Practice Note: Reform of the UK listing regime—fundamentals. This Practice Note reflects the listing regime as it was prior to 29 July 2024.If a company prepares annual accounts for a financial year, they must be audited, unless the company is exempt from audit.Qualifying subsidiary exemption from the requirement to audit accountsIf a subsidiary company satisfies certain conditions, it may benefit from an exemption from the requirement to audit individual accounts for a financial year.The relevant conditions are...

Corporate liability for environmental offences—parent company liability for subsidiary actions

A parent company is not responsible for the acts or omissions of its subsidiary simply by virtue of its status as parent. Each subsidiary has separate corporate responsibility and any intention to pierce the corporate veil must be clearly and unequivocally expressed in the statute.However, a parent company can be fixed with liability if its knowledge of, and ability to, intervene in the affairs of the subsidiary are sufficient to create a duty of care towards any person suffering damage or injury due to the subsidiary's acts or omissions. Crucially, if a parent company has 'superior knowledge' about the nature and management of particular risks, and is aware of a 'systemic failure' on the part of its subsidiary, then the court may be willing to find a duty of care. It is more likely to do so if the subsidiary:•has been dissolved•has limited financial strength, and/or•does not have insurance cover in relation to the relevant type of damage or injurySuch circumstances may arise where the parent company:•has taken direct responsibility...

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Written resolution—completion of investment agreement—members—newco

Written resolution—completion of investment agreement—members—newco Company number: [insert number] The companies act 2006 Private company limited by SHARES Written resolutions OF [insert company name] Limited (the Company) Circulated on [insert circulation date] Pursuant to Chapter 2 of Part 13 of the Companies Act 2006 (CA 2006), the directors of the Company propose that Resolution 1 [and] [[insert number(s) of any additional proposed ordinary resolutions]] below be passed as [an] ordinary resolution[s] and that Resolutions 2 [ [and OR ,] 3 [insert number(s) of any additional proposed special resolutions]] below be passed as [a] special resolution[s]. ordinary resolution[S] 1 THAT subject to and conditional on the passage of Resolution 2, the directors are generally and unconditionally authorised, for the purpose of section 551 of the Companies Act 2006 and generally, to exercise all and any powers of the Company to allot shares and to grant rights to subscribe for, or to convert any security into, shares in the Company to any person, at...

Board minutes—intra-group reorganisation—share purchase—seller

Board minutes—intra-group reorganisation—share purchase—seller Company number: [insert company number] [insert company name] [Limited OR plc] Minutes of a meeting of the board of directors (the Meeting) of [insert company name] [Limited OR plc] (the Company) Held at [insert place of meeting] Held on [insert day, month and year of meeting] at [insert time of meeting][am OR pm] Present: [Insert names of the director(s) physically present][[Insert names of any directors present by telephone as permitted by the Company’s articles of association] (by telephone)] [[Insert names of any directors present by other means permitted by the Company’s articles of association] (by [insert other means]] [ In attendance: ] [[Insert name of anyone in attendance, who does not count towards the quorum for the Meeting (eg the company secretary, any legal advisers)]] [ Apologies: ] [[Insert names of any directors who are unable to attend the Meeting]] 1 Chair, notice and quorum [Insert name] was appointed Chair of the Meeting. The Chair reported that due...

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Following the merger of two companies, where there are concerns about the performance of a director of one of the subsidiaries, is it possible for the directors of the holding company to instigate the introduction of new service agreements and key performance indicators for the directors of both subsidiary companies, to include the right to terminate contracts based on performance?

Following the merger of two companies, where there are concerns about the performance of a director of one of the subsidiaries, is it possible for the directors of the holding company to instigate the introduction of new service agreements and key performance indicators for the directors of both subsidiary companies, to include the right to terminate contracts based on performance? Where an employer is seeking to introduce new service agreements for existing directors, as for any employment contract, this will amount to a change in the terms and conditions of employment for those directors. Like any other contract, an employment contract or service agreement may be amended at any time either: • in accordance with the terms of the contract itself • with the agreement of the parties to the contract For information on the legal and practical considerations that arise when changing terms and conditions of employment, see: • Practice Note: Changing terms and conditions of employment • Checklist—changing terms and conditions of...

What is the difference between a holding or subsidiary company and a parent or subsidiary undertaking?

What is the difference between a holding or subsidiary company and a parent or subsidiary undertaking? Two distinct statutory concepts govern holding and subsidiary company relationships. The definition of 'parent and subsidiary undertaking' is the basis for consolidated accounts for groups of companies. This is to be distinguished from the general definition of holding and subsidiary company used elsewhere in the Companies Acts, other legislation, and in contracts. Holding and subsidiary companies The term 'company' in the Companies Act 2006 (CA 2006), s 1159 (ie both as to holding and subsidiary companies) includes any body corporate (CA 2006, s 1159(4)). It does not, therefore, have the wide reach of the term 'undertaking'. It does, however, include sub-subsidiaries. CA 2006, s 1159(1) defines a company as a ‘subsidiary’ of another company, its ‘holding company’, if that other company: • holds a majority of the voting rights in it, or • is a member of it and has the right to appoint or remove a majority of its...

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Employment weekly highlights—8 May 2025

This edition of Employment weekly highlights includes: (1) an EAT decision under the pre-IP completion day Brussels Regulation on the employment tribunal’s jurisdiction to hear claims brought by a British citizen employed by a company domiciled in Georgia, USA under an employment contract governed by the law of that State, (2) the launch by the Low Pay Commission (LPC) of a consultation on 2026 national minimum wage (NMW) and national living wage (NLW) rates, (3) an update to the HMRC Check Employment Status for Tax (CEST) tool, (4) a Court of Appeal decision to strike out whistleblowing detriment claims against external HR consultants, (5) confirmation from the Court of Appeal that, in the context of an indirect age discrimination claim relating to changes made by a parent company to the rules of a long term incentive plan (LTIP), the parent company was not the agent of the subsidiary employer, (6) a High Court decision that the alleged vicarious liability of a transferor employer does not transfer under TUPE, (7) the...

Court of Appeal considers whether third parties may take the benefit of arbitration awards (Vale v Steinmetz)

Arbitration analysis: The Court of Appeal has handed down judgment in an appeal in which a novel question of law (whether a third party to an arbitration could take the benefit of findings in the arbitration award) was at the centre of the dispute. The appellants applied for summary judgment with respect to part of the claimants’ claim on the basis that an arbitral tribunal had already determined that the claimants could not pursue the same claim against another company (which had been party to the arbitration, but was not party to the English proceedings). The Court of Appeal held that an arbitration award between A and B could not have binding effect on proceedings between A and C. In any case, there was no wider principle by which a third party to an arbitration could take the benefit of the tribunal’s award. The claimants’ claim was therefore permitted to proceed to trial. Written by Mark Wassouf, barrister at 3 Verulam Buildings.

View the latest UK Parliament Acts documents on Subsidiary company

1159 Meaning of “subsidiary” etc

(1)     A company is a “subsidiary” of another company, its “holding company”, if that other company— (a)     holds a majority of the voting rights in it, or(b)     is a member of it and has the right to appoint or remove a majority of its board of directors, or(c)     is a member of it and controls alone, pursuant to an agreement with other members, a majority of the voting rights in it,or if it is a subsidiary of a company that is itself a subsidiary of that other company.(2)

SCHEDULE 6 Meaning of “Subsidiary” etc: Supplementary Provisions

The provisions of this Part of this Schedule explain expressions used in section 1159 (meaning of “subsidiary” etc) and otherwise supplement that section.