Additionally, copies of the following ordinary resolutions should also be filed at Companies House:. Copies of other documentation may also need to be filed alongside the company resolutions, such as altered articles of association. This also applies to copies of written resolutions. He has attained considerable experience in the field after working in client-facing roles for leading international providers of corporate services.
In his spare time, Nicholas enjoys writing, painting and aviation, and is also a fair-weather supporter of Derby County. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Post comment. Skip to content. The QCF blog. Search blog: Search:. Company resolutions — the different types explained 15 Mar Table of Contents. Previous Previous post: How to check the public company record Next Next post: Self Assessment guidance for company directors and shareholders.
Related posts. How is a Limited Liability Partnership formed? Let us try to understand why such board resolutions are important and how to create them. A company director is vested with significant power to run the business. Though appointed by the shareholders, the Board of Directors as a collective is powerful enough to become a risk to the shareholders if they become reckless in their decision making or act out of personal interest.
Bad decisions will directly impact the business and in turn, affect the share value. Thus to protect the interest of shareholders , director duties are created in such a way that they are legally binding, with a board resolution being one such legally binding structures.
It is a formal document that identifies the roles of all corporate officers and their votes over a particular decision concerning the welfare of a company.
It is used to pen down every minute detail of the board meeting. It is usually certified by the appointed chairperson and duly signed by all board members present at the meeting.
It is maintained along with the Board meeting minutes and is a legally binding decision of every S Corporation or C Corporation. Here is how a typical board resolution looks:. Board resolutions percolate down the company hierarchy and are implemented by the respective business units. Hence board meetings are not a casual, daily affair. There is no mandate to submit board resolutions to a government agency or any other supervising entity. It is maintained for self-assessment within the company or in case any of the important shareholders want to verify the actions which the board of directors have taken on their behalf.
Some companies may have a separate board for directors and shareholders , but the board of most corporations comprises a combination of large shareholders, equity partners, directors, and other senior officers. The extent of their voting rights is laid out in their respective agreements. In such cases, board resolutions are alternatively known as company resolutions. This can be done by a show of hands, chits, or by electronic means. However, based on the criticality of a proposal, a percentage of the majority required to pass a resolution may vary.
Here are three types of resolutions:. When a board resolution is passed by a simple majority , it is called an ordinary resolution. This type of resolution can be passed with a show of hands at a meeting.
Some decisions which require ordinary resolutions are:. Special resolutions - also known as 'extraordinary resolutions' - are needed for more important decisions or those decisions affecting the constitution of a company.
Unlike ordinary resolutions, votes are determined by the number of shares given to each shareholder as opposed to the number of shareholders. Types of special resolution include:.
Although general meetings for shareholders or board meetings for directors are normally required to pass resolutions, some decisions can be passed in writing without the need for a meeting. Resolutions that are passed in a meeting should be accurately recorded in the minutes of the meeting. Minutes serve as evidence of meeting proceedings and must be kept at the company's registered office or Single Alternative Inspection Location SAIL for at least 10 years.
Furthermore, all shareholders must receive written notification of any resolutions. If records are not kept, then an offence will have been committed. The company must make all records or decisions available for inspection and keep them at the company's registered office or other specified location.
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