All changes to the articles require a special resolution. There is no exemption from this. Don't get confused between special business and a special resolution - they are not connected. The dividends are certainly illegal if the company has net losses and not just losses in particular years.

What is the difference between "losses" and "net losses".

What precisely is "special business". I am so confused about this term.

Thanks

Merlin wrote:
Hi Sue

Changes to the Articles require a Special Resolution (s9 Companies Act 1985). This can be 75% of those attending (either in person or by proxy) and voting at a meeting of the members as oppposed to 75% of the total votes available.

Alternatively it can be done by written resolution which, following the Companies Act 2006 changes, requires the same majority as at a meeting only difference being that it is 75% of the total votes available that have to sign the resolution.

Once passed a copy of the resolution and a copy of the revised Articles have to be filed at Companies House within 14 days of the date of the resolution.

If the transfer provisions are contained in the current articles they cannot be changed by an Ordinary Resolution.

Thank You Merlin this was just the information I was looking for. You really know your stuff. Anyway thanks alot.

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Thank You Merlin this was just the information I was looking for. You really know your stuff. Anyway thanks alot.
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The company say they have taken legal advice and said that the resolution could go through as an ordinary resolution because the directors already had the power to change the way the shares were allocated and it was therefore deemed not to require a special resolution.

The Articles of Association say that all General Meetings other than Annual General Meetings shall be called Extraordinary General Meetings. Also all business shall be deemed SPECIAL that is transacted at an Extraordinary General Meeting [with certain exceptions e.g. salaries]
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