written resolutions

what is a written resolution?

under the companies act 2006, private limited companies can pass certain resolutions in writing as opposed to at a general meeting. company resolutions are company decisions reached by the shareholders. a written resolution is the document used to pass such resolutions in writing. 2022世界杯32强抽签时间 ’s shareholder resolution can be used to pass a written resolution.

if the articles of association of a private limited company prevent a resolution from being passed as a written resolution, any such provisions are void.

public companies cannot pass written resolutions (even if their articles allow this) as all company resolutions must be passed at a meeting of shareholders.

when can a written resolution be used?

written resolutions can be used to pass most types of company resolutions. examples of resolutions that can be passed in writing include: 

• appointing a new company director 

• amending the company’s articles of association 

• making changes to a director’s contract of service 

• approving the company loaning money to a director

however, written resolutions cannot be used to remove: 

• a company director before the end of their contract of service 

• an auditor before the end of their term of office 

both of these decisions require the shareholders to hold a general meeting and trigger special notice provisions. for more information on these notice provisions, ask a lawyer.

how is a written resolution requested?

a written resolution can be requested in a similar manner to a general meeting, either if:

• proposed by the board of directors, or

• requested by shareholders holding at least 5% of the total voting rights of the company (this percentage may be lower as specified in the articles of association)

what are the total voting rights?

private limited companies can set out which company shares have voting rights attached to them. some shares may have full voting rights (ie shareholders holding them can always vote), others may have partial voting rights or voting rights in specified circumstances and others may have no voting rights at all. the types of voting rights attached to different shares should be set out in the company’s articles. for more information, read types of shares.

shareholders who own shares that carry voting rights are allowed to vote on shareholder resolutions.

for example, standard ordinary shares, which are issued by most private limited companies, carry one vote per share. shareholders who own at least one ordinary share are entitled to vote on company resolutions and will have one vote per ordinary share they own. 

the total voting rights of the company are all shares owned by shareholders that confer such voting rights.

how is a written resolution passed?

a resolution set out in a written resolution is passed when the requisite percentage of total voting rights vote in favour of it. the percentage depends on the type of resolution being passed:

• an ordinary resolution passes if shareholders holding a simple majority (ie more than 50%) of the company’s total voting rights approve the resolution (ie vote in its favour)

• a special resolution passes if shareholders holding at least 75% of the company’s total voting rights approve the resolution 

as a company’s articles may stipulate a higher percentage for special resolutions, it is important to check the articles before asking shareholders to vote on a written resolution. 

note that if certain resolutions are passed (eg a special resolution), companies house must be notified within 15 days.

for more information, read company resolutions. 

what about multiple resolutions?

a written resolution may set out multiple resolutions (including multiple ordinary and special resolutions) in one document. where this is the case, the voting process needs to be considered.

typically, a written resolution will provide shareholders with only one voting option. this means that a shareholder can either accept or reject all resolutions. 2022世界杯32强抽签时间 ’s shareholder resolution provides shareholders with only one voting option.

however, this can cause difficulties as resolutions proposed in a written resolution can be passed when the relevant percentage of agreement is reached. for example, if a written resolution proposes both an ordinary and a special resolution, the ordinary resolution may receive the necessary approval percentage, while the special resolution does not. if this causes issues, alternatives may need to be considered, including: 

• making the passing of the ordinary resolution conditional on the passing of the special resolution

• circulating separate written resolutions for the ordinary and special resolutions

alternatively, it may be best for shareholders to be able to vote separately on each resolution.

how is a written resolution circulated?

a copy of the written resolution must be made available (ie circulated) to all shareholders entitled to vote on the proposed resolution(s) at the times of circulation (known as ‘eligible shareholders’ or ‘eligible members’). copies of the written resolution should be distributed: 

• at the same time (so far as reasonably practical) 

• by submitting the same copy to each shareholder in turn, provided that there is no undue delay, or

• by submitting copies to groups of shareholders in turn, provided that there is no undue delay 

the written resolution can be distributed:

• in hard copy (eg in person or by post)

• electronically (eg by email or fax) - only if the shareholder has expressly consented to receive electronic communications of this type and has provided an electronic address (eg an email address or fax number)

• through the company’s website (eg publishing the written resolution on the company’s website) - only if the shareholder has agreed to receive documents via the website, the company notifies the shareholder that the document has been published on the website, and the resolution is made available on the website from the circulation date until it lapses (ie becomes invalid)

• a mix of the above 

the circulation date is the date the written resolution is first made available to the shareholders. 

what are the explanatory notes?

the written resolution must be accompanied by certain explanatory notes, setting out: 

• how shareholders can signify their agreement to the proposed resolution(s), and 

• the date on or before which sufficient agreement must be received for the resolution(s) to pass (this is the ‘lapse date’) 

while failure to include such explanatory notes does not invalidate the written resolution it may result in the officers calling the meeting (ie the directors or company secretary) being subject to a fine.

how do shareholders vote?

shareholders vote on the proposed resolution(s) by signing the written resolution and returning it to the company. 

for a vote to count, the company must receive the signed written resolution on or before the lapse date. under the law, the lapse period (ie the period for which a written resolution remains valid) is 28 days from the circulation date. however, the company’s articles may set out a different period. any agreement to a resolution received after the lapse date is deemed ineffective and is not counted.

any shareholders who do not want to vote in favour of the proposed resolution(s), don’t need to sign the written resolution and return it to the company.

how can signed written resolutions be returned?

the explanatory notes should set out how shareholders can return the signed written resolution. written resolutions may be returned: 

• by hand (ie in person) - by delivering the signed copy to the company at the address specified in the explanatory notes (eg the company’s registered address or main office)

• by post - by mailing a signed copy to the company at the address specified in the explanatory notes

• by email - by attaching a scanned copy of the signed document to an email and emailing it to the company or by sending an email to the company setting out the agreement to the resolution(s) in the text of the email

• by fax - by faxing the signed copy to the company’s fax number

note that a company can only be sent the signed written resolution electronically (ie by email or fax) if the company either: 

• has expressly agreed to receive electronic communication of this type and has provided an electronic address, or

• is deemed to have so agreed (this is the case if electronic contact details are included in the resolution or the accompanying documents unless an instruction to the contrary is provided)

if a company does not wish to accept written resolutions by electronic means, this should be set out in the explanatory notes.