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Special Resolution

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  • 01-12-2020 10:49am
    #1
    IrishZeus
    Registered Users Posts: 1,887 ✭✭✭


    Hi folks,

    Looking for advice or a link to a source.

    I’m currently in equity discussions in my own company. I’m MD and looking to increase my equity from current 20% to (eventually) an equal 33% standing.

    In relation to protecting myself/my decision making power within the company, I believe I need to at least move to 25% shareholding so that no major changes can take place through a special resolution, without my vote being considered.

    My question is - do I need 25% or 25.1% in this instance? Can a special resolution be passed with an exact 75% vote or must it be more than 75%?

    Many thanks for any guidance! I’m aware I need to discuss this with a solicitor which I intend to do - I just want to inform myself a bit more first.


Comments

  • Options
    #2
    ohnonotgmail
    Registered Users Posts: 40,126 ✭✭✭✭ohnonotgmail


    my reading is that holding 25% would not be enough to stop a special resolution.

    http://www.irishstatutebook.ie/eli/2014/act/38/section/191/enacted/en/html#sec191
    The condition referred to in subsection (2)(b) is that the resolution is passed by not less than 75 per cent of the votes cast by such members of the company concerned as, being entitled to do so, vote in person or by proxy at a general meeting of it.


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    #3
    antoinolachtnai
    Registered Users Posts: 9,773 ✭✭✭antoinolachtnai


    As a matter of practicality I would not rely on this as a means of avoiding adverse outcomes. The main problem is that it may not provide protection against dilution resulting from the issue of new shares.

    There are also tax issues with adjusting shareholding like this.

    The best way to deal with these issues is through a shareholders' agreement. Your solicitor will be able to advise on this.


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