Companies Act 2014 section 974

Alteration of objects clause by special resolution

Section 974 sets out the procedure by which a Designated Activity Company (DAC) may alter the objects clause in its memorandum of association by special resolution, and the rights of dissenting shareholders and debenture holders to challenge such alterations in court.

• A DAC may abandon, restrict, amend or adopt new objects by passing a special resolution, and any such change has the same standing as if it had been included from the outset.
• Holders of at least 15 per cent of the DAC's issued share capital (or any class of it), or at least 15 per cent of its debentures carrying objection rights, may apply to court within 21 days to have the alteration cancelled — provided they did not consent to or vote in favour of it.
• The court may cancel or confirm the alteration in whole or in part, on whatever terms it considers appropriate, and may adjourn proceedings to facilitate a buyout arrangement for dissenting members' interests.
• A court order may require the DAC to purchase the shares of dissenting members, with a corresponding reduction in company capital, even where the general restrictions on a company acquiring its own shares under section 102 would otherwise apply.