What are the powers of shareholders?

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Powers of shareholders:

Shareholders are the owners of a company and have certain powers and rights. The powers of shareholders are set out in the Companies Act 2006 and are designed to enable shareholders to participate in the management of the company and protect their interests.

Power to appoint and remove directors

Shareholders have the power to appoint and remove directors of the company. This includes making decisions about the appointment of executive and non-executive directors, as well as the appointment of company secretaries and other officers.

Power to approve the company’s articles of association

Shareholders have the power to approve the company’s articles of association. This is the document that sets out the rules for the internal management of the company and the rights and responsibilities of shareholders.

Power to amend the company’s articles of association

Shareholders have the power to amend the company’s articles of association. This includes making changes to the rules for the internal management of the company and the rights and responsibilities of shareholders.

Power to ask questions on matters in accounts

Company accounts are approved by the Board of Directors. Shareholders are merely provided with a copy of accounts. However, they may ask questions on matters in accounts. There may be additional matters, that require a vote. 

Power to approve final dividends

The decision to pay dividends must be made by the directors and recorded in the company’s minutes. Final dividends require shareholder approval; interim dividends do not. The company must have sufficient distributable reserves to pay the dividends.

Power to pass resolutions

Shareholders have the power to pass resolutions. This includes making decisions about the management and direction of the company, such as changes to the company’s name, the issue of new shares, and the appointment of auditors.

Power to vote

Shareholders have the power to vote on matters affecting the company. This includes voting on resolutions at general meetings, such as the appointment of directors, changes to the company’s articles of association, and the approval of the annual accounts.

Power to sell shares

Shareholders have the power to sell their shares in the company. This includes making decisions about the price of the shares and the terms and conditions of the sale.

Conclusion

In summary, the powers of shareholders in the UK are wide-ranging and designed to enable shareholders to participate in the management of the company and protect their interests. Shareholders have the power to appoint and remove directors, approve the company’s articles of association, amend the company’s articles of association, approve the company’s annual accounts, declare dividends, pass resolutions, vote on matters affecting the company, and sell their shares. By exercising these powers responsibly and in the best interests of the company, shareholders can help to ensure the long-term success of the company.

Powers of shareholders

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