Section 33 of the Companies Act 1997 governs every change to a company’s constitution, including deciding to have one at all.
Section 33(1) — adopting a constitution
The shareholders of a company that does not have a constitution may, by special resolution, adopt a constitution for the company.
A company incorporated without a constitution — which section 27 permits — is not stuck with the Act’s default rules. The shareholders may adopt one at any time. Under the section 2 definition, a special resolution requires a majority of 75%, or a higher majority if the constitution so provides, of the votes of shareholders entitled to vote and voting.
Section 33(2) — altering or revoking
Without limiting section 98 or section 152, but subject to section 55, the shareholders of a company may, by special resolution, alter or revoke the constitution.
- Section 98 — alteration of shareholder rights. Where an alteration affects the rights attached to a class, the interest group machinery applies, and under section 99 a shareholder in that group may require the company to purchase their shares.
- Section 152 — the prejudiced shareholder remedy. An alteration passed by the majority may still be attacked as oppressive, unfairly discriminatory or unfairly prejudicial, and section 153 deals expressly with the Court’s power in relation to alteration to the constitution.
- Section 55 — a reduction of shareholder liability is treated as a distribution, so an alteration having that effect must satisfy the solvency test machinery.
Add section 83: a shareholder is not required to acquire shares by reason of an alteration made after they became a shareholder, unless they agree in writing.
Under section 24(2), subject to its constitution, an application to change the name is not an amendment of the constitution. It still needs a special resolution — but under section 24(1)(c), not section 33 — and it does not require a section 33(3) notice.
Sections 33(3) and (4) — the one-month notice
Within one month of the adoption, alteration or revocation, the board shall ensure that a notice in the prescribed form is submitted to the Registrar for registration.
Where the board fails to comply, every director commits an offence and is liable on conviction to the penalty in section 414(2).
Note that the obligation is on the board collectively and the offence falls on every director individually — not only on the director who was supposed to attend to the filing. The same pattern appears in section 34(6).
The procedure, step by step
- Draft the change and check it against section 31 and section 32(2) — a clause inconsistent with any Act has no effect.
- Check whether class rights are affected. If so, run the section 98 process and be ready for section 99 buy-out claims.
- Call the meeting. Notice under section 102 and Schedule 2, or use a written resolution under section 103, or unanimous assent under section 89.
- Pass the special resolution — 75% or higher if the constitution requires it.
- File within one month in the prescribed form.
- Update the records. The constitution is one of the company records required by section 164 to be kept at the registered office.
- Consider consolidating under section 34 if amendments have accumulated.
Section 34 — the single consolidated document
(1) A company may from time to time submit a single document incorporating the constitution and all amendments to it.
(2) The Registrar may require it by written notice where, by reason of the number of amendments, a single document would be desirable.
(3) The board shall ensure the document is submitted within one month of receiving that notice.
(4) It shall be accompanied by a certificate signed by a director that the document complies.
(5) The Registrar shall register it and give written advice of the registration.
(6) Failure to comply with subsection (3) or (4) is an offence by every director, penalty as in section 414(2).
A consolidated document becomes the constitution under section 30(c). For a long-established company this is worth doing voluntarily — a constitution that can only be understood by reading a founding document plus ten amending resolutions is a standing source of dispute.
If you are on the losing side of the vote
| Remedy | Section |
|---|---|
| Object through the interest group process where class rights are affected | ss 97, 98 |
| Require the company to purchase your shares | s 99 |
| Apply as a prejudiced shareholder | s 152 |
| Seek orders in relation to the alteration to constitution itself | s 153 |
| Seek an injunction restraining conduct contravening the Act or constitution | s 142 |
| Rely on section 83 — you cannot be made to take more shares | s 83 |
And where the ordinary procedure is unworkable — a deadlocked company, a shareholder who cannot be found, a class that will not meet — a director or shareholder may apply under section 35 for the Court to alter the constitution.
Sources
- Companies Act 1997 — ss 24, 27–35, 55, 83, 88, 89, 97–99, 102, 103, 142, 152, 153, 164, 414
Before relying on anything here, read the current text of the Companies Act 1997 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.