Companies Act 1985

125 Variation of class rights. E+W+S

(1) This section is concerned with the variation of the rights attached to any class of shares in a company whose share capital is divided into shares of different classes.

(2) Where the rights are attached to a class of shares otherwise than by the company’s memorandum, and the company’s articles do not contain provision with respect to the variation of the rights, those rights may be varied if, but only if—

(a) the holders of three-quarters in nominal value of the issued shares of that class [F1 (excluding any shares of that class held as treasury shares)] consent in writing to the variation; or

(b) [F2 a special resolution] passed at a separate general meeting of the holders of that class sanctions the variation;

and any requirement (howsoever imposed) in relation to the variation of those rights is complied with to the extent that it is not comprised in paragraphs (a) and (b) above.

(3) Where—

(a) the rights are attached to a class of shares by the memorandum or otherwise;

(b) the memorandum or articles contain provision for the variation of those rights; and

(c) the variation of those rights is connected with the giving, variation, revocation or renewal of an authority for allotment under section 80 or with a reduction of the company’s share capital under section 135;

those rights shall not be varied unless—

(i) the condition mentioned in subsection (2)(a) or (b) above is satisfied; and

(ii) any requirement of the memorandum or articles in relation to the variation of rights of that class is complied with to the extent that it is not comprised in that condition.

(4) If the rights are attached to a class of shares in the company by the memorandum or otherwise and—

(a) where they are so attached by the memorandum, the articles contain provision with respect to their variation which had been included in the articles at the time of the company’s original incorporation; or

(b) where they are so attached otherwise, the articles contain such provision (whenever first so included),

and in either case the variation is not connected as mentioned in subsection (3)(c), those rights may only be varied in accordance with that provision of the articles.

(5) If the rights are attached to a class of shares by the memorandum, and the memorandum and articles do not contain provision with respect to the variation of those rights, those rights may be varied if all the members of the company [F3 (excluding any member holding shares as treasury shares)] agree to the variation.

(6) F4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) Any alteration of a provision contained in a company’s articles for the variation of the rights attached to a class of shares, or the insertion of any such provision into the articles, is itself to be treated as a variation of those rights.

(8) In this section and (except where the context otherwise requires) in any provision for the variation of the rights attached to a class of shares contained in a company’s memorandum or articles, references to the variation of those rights are to be read as including references to their abrogation.

Textual Amendments

F1 Words in s. 125(2)(a) inserted (1.12.2003) by The Companies (Acquisition of Own Shares)(Treasury Shares) Regulations 2003 (S.I. 2003/1116), reg. 4, {Sch. para. 8(2)}

F2 Words in s. 125(2) substituted (1.10.2007 with application in accordance with Sch. 4 para. 2(2) of the amending S.I.) by The Companies Act 2006 (Commencement No. 3, Consequential Amendments, Transitional Provisions and Savings) Order 2007 (S.I. 2007/2194), art. 10(1), Sch. 4 para. 2(1) (with art. 12)

F3 Words in s. 125(5) inserted (1.12.2003) by The Companies (Acquisition of Own Shares)(Treasury Shares) Regulations 2003 (S.I. 2003/1116), reg. 4, {Sch. para. 8(3)}

F4 S. 125(6) repealed (1.10.2007) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/2194, art. 8, Sch. 2 Pt. 1 (with art. 12)