Corporate shareholders and corporate representatives

A company that owns shares in another company cannot turn up to a meeting itself, so its board passes a resolution under section 323 of the Companies Act 2006 authorising one or more individuals to act as its corporate representative. The representative can exercise the same powers the corporate shareholder could exercise if it were an individual member, whereas a proxy is appointed under section 324 to exercise only the member’s rights to attend, speak and vote, through a proxy notice governed by the articles.

Which shareholders can appoint a corporate representative?

Section 323(1) applies to any corporation that is a member of a company, “whether or not a company within the meaning of this Act”. That covers a UK holding company, an overseas company and a limited liability partnership, which section 1(2) of the Limited Liability Partnerships Act 2000 makes a body corporate. It does not cover individuals, trustees holding shares in their own names or an ordinary partnership in England and Wales, because none of those is a corporation. Those shareholders attend in person or appoint a proxy.

The rules apply to class meetings as well as general meetings, because section 334(1) applies the meetings chapter of the Act, including section 323, to meetings of holders of a class of shares with the necessary modifications.

How does a company appoint its representative?

Section 323(1) says the corporation may authorise a person or persons “by resolution of its directors or other governing body”. The authority therefore comes from the shareholder’s own board, not from any form issued by the company holding the meeting. In practice the board minute names the individual, identifies the company and the meeting (or says the authority covers all meetings until revoked) and states how many shares the representative is to act for if more than one person is appointed.

A company with a single director that uses the model articles for private companies can make the decision without a board meeting, because article 7(2) lets a sole director take decisions without regard to the articles on directors’ decision making. A company with several directors should hold a meeting or use a unanimous decision in writing; see board decisions without a meeting.

Section 323 prescribes no form and no deadline for producing the authority. The company holding the meeting will usually ask to see a certified copy of the board resolution or a letter of representation signed by a director so that the chairman can satisfy himself that the person is entitled to vote. Under model article 43, any objection to a person’s qualification to vote must be raised at the meeting at which the vote is tendered and referred to the chairman of the meeting, whose decision is final.

What can a corporate representative do at the meeting?

Section 323(2) gives the representative “the same powers as the corporation could exercise if it were an individual member of the company”. In a private company using the model articles that means the representative can:

• attend, speak and vote on a show of hands and on a poll;
• demand a poll under model article 44, which allows two or more persons with the right to vote, or persons holding at least one tenth of the total voting rights, to demand one;
• count towards the quorum, because section 318(3)(b) treats a person authorised under section 323 as a qualifying person.

One limit on the quorum: under section 318(2)(a), two people do not make a quorum if each qualifies only as a representative of the same corporation. A meeting attended only by two representatives of one parent company is inquorate unless the articles say otherwise or the company has only one member, in which case section 318(1) makes one qualifying person a quorum.

What if more than one representative is appointed?

Section 323 allows a corporation to authorise several people. On a show of hands, section 323(3) gives each authorised person the same voting rights the corporation would have. On a poll, and for any other power, section 323(4) deals with the risk of conflict:

• if the representatives exercise a power over the same shares in the same way, it is treated as exercised in that way;
• if they exercise it differently, it is treated as not exercised at all.

The practical answer is to allocate shares. A pension trustee company or nominee that needs to vote part of a holding for and part against should give each representative authority over a specified block of shares, so that no two people act for the same shares.

How is a corporate representative different from a proxy?

Point	Corporate representative	Proxy
Source of authority	Resolution of the corporation’s directors or governing body, section 323(1)	Appointment by the member under section 324, by proxy notice under the articles (model article 45)
Who can use it	Corporate members only	Any member, individual or corporate
Scope	Same powers as an individual member, section 323(2)	Rights to attend, speak and vote, section 324(1), plus the right to demand a poll, section 329
Deadline	None in the Act	Articles may require the proxy notice in advance, but not earlier than 48 hours before the meeting, ignoring non working days, section 327
Show of hands	Each representative has the voting rights the corporation would have, section 323(3)	One vote, or one for and one against where appointed by several members with opposing instructions, section 285
Several appointees	Conflicting votes on the same shares are treated as not cast, section 323(4)	Each proxy must be appointed for different shares, section 324(2)
Ending the authority	A further board resolution	Notice of termination under section 330 and the articles; model article 46(3) requires it before the meeting starts

A corporate member can choose either route. It can appoint a proxy instead of, or as well as, a representative, but must then keep the two authorities from overlapping on the same shares. The detail of proxy appointments, polls and revocation is covered in proxies and voting at general meetings.

Notices of meeting only have to explain proxy rights. Section 325 requires every notice calling a meeting to state, with reasonable prominence, the member’s right to appoint a proxy. There is no equivalent statement for corporate representatives, so a corporate shareholder’s company secretary needs to know the route exists. The wider rules on notices are in general meeting notice.

Do corporate representatives sign written resolutions?

No. Section 323 authorises representatives “at any meeting of the company”. A written resolution of a private company is not a meeting. Under section 296(1), a member agrees to a written resolution when the company receives from the member, or someone acting on its behalf, an authenticated document identifying the resolution and indicating agreement. For a corporate member, a director or other authorised signatory signs on the company’s behalf.

Section 1146(2) treats a hard copy document as authenticated if it is signed by the sender, and section 1146(3) sets the test for electronic documents. Where one person acts for another, section 1146(4) preserves any provision in the articles allowing the company to require reasonable evidence of that person’s authority. Once given, agreement cannot be revoked, under section 296(3). See written resolutions for the full procedure.

How does this work in a parent and subsidiary?

Illustration only. Holdco Ltd owns 60 of the 100 ordinary shares in Opco Ltd and Jane owns the other 40. Opco calls a general meeting to consider an ordinary resolution. Holdco’s board resolves that its finance director, Sam, will act as its representative.

• Quorum: Sam and Jane are two qualifying persons under section 318, so the meeting is quorate.
• Show of hands: Sam and Jane have one vote each. Sam votes for and Jane against, so the result is tied and Sam demands a poll.
• Poll: under section 284(3) each share carries one vote, so the resolution passes by 60 votes to 40.

Had the resolution been a special resolution, it would have failed, because section 283 requires a majority of not less than 75%. Had Holdco sent two representatives who voted its 60 shares in opposite directions, section 323(4) would have treated Holdco’s votes as not exercised, and Jane’s 40 votes would have decided the matter.

What mistakes come up most often?

• No board resolution. A letter from a director with no underlying decision of the board is not authority under section 323. Keep a minute.
• Treating a representative as a proxy. Completing a proxy form for the person who was meant to be the representative applies the proxy rules, including any advance deadline in the articles.
• Overlapping authorities. Two representatives, or a representative and a proxy, acting for the same shares in different ways can cancel the corporation’s vote.
• Two representatives of one shareholder as the quorum. Section 318(2)(a) does not count them as two. Check attendance before business starts.
• No record in the minutes. The minutes should note who attended as representative and for which corporation; see minutes of general meetings.

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Related Accountapedia entries

• Shareholders’ agreements
• Quorum at general meetings
• The corporate interest restriction
• Virtual and hybrid company meetings
• Can an LLP have a corporate member

Sources

• legislation.gov.uk: Act 2006 c. 46, section 323
• legislation.gov.uk: Act 2000 c. 12, section 1
• legislation.gov.uk: Act 2006 c. 46, section 334
• legislation.gov.uk: Act 2006 c. 46, section 318
• legislation.gov.uk: Act 2006 c. 46, section 324
• legislation.gov.uk: Act 2006 c. 46, section 325
• legislation.gov.uk: Act 2006 c. 46, section 327
• legislation.gov.uk: Act 2006 c. 46, section 329
• legislation.gov.uk: Act 2006 c. 46, section 330
• legislation.gov.uk: Act 2006 c. 46, section 285

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.