BioPharma PLC wishes to alter its Articles of Association to restrict the borrowing powers of its directors. Under the Companies Act 2006, what is the minimum requirement to validly alter the Articles of Association?

Answer options:

An ordinary resolution passed by a simple majority (over 50%) of the votes cast by shareholders.

A special resolution passed by at least 75% of the votes cast by shareholders.

A unanimous resolution passed by 100% of the shareholders.

A board resolution passed by a majority of the directors.

How to approach this question

Recall the statutory requirement under Section 21 of the Companies Act 2006 for altering a company's constitution.

Full Answer

B.A special resolution passed by at least 75% of the votes cast by shareholders.✓ Correct

Under Section 21 of the Companies Act 2006, a company may amend its Articles of Association by passing a special resolution. A special resolution requires a majority of not less than 75% of the votes cast by shareholders entitled to vote.

Common mistakes

Confusing ordinary resolutions (50%+) with special resolutions (75%+).

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