A company resolution is an official record of the decision of the directors or members of a company.
Once a resolution is passed, the company is bound by it. If a majority is not reached, then a resolution has not been made.
Under the Companies Act, there are two categories to which resolutions can be assigned
The first centres on fixed issues that cannot be altered, such as the requirements for appointing a director or matters to be recorded at Companies House, among others.
The second revolves around issues that can be changed and which are generally accepted as suggestions, rather than hard facts.
These can deal with topics including ideas for how directors and shareholders run the company.
While the resolutions set out under the first category are subject to the Companies Act, those set out in the second category are merely enforced under the company's own rules.
Recording company resolutions in minutes is a positive way of sharing company procedure across the board and ensuring everyone is working towards the same goal.
The company's articles of association set out the way a vote on a resolution is conducted during a general meeting or a meeting of class members.
Typically a vote is taken by a show of hands, but any member can demand a poll unless company policy states otherwise.
Although the vote is not counted, the resolution is only passed when the chairman declares a majority vote in favour of the resolution.
Company members, and where relevant auditors, must be given notice of the intention to propose a resolution.
Company resolutions must be submitted to Companies House in print form, or via an approved Companies House form, within 15 days of being passed.
There is a number of different kinds of company resolutions which include:
Any companies wishing to save time making resolutions should consider downloading Lawpack's Ready-Made Company Minutes & Company Resolutions ebook, which includes all the templates a limited company needs.
This book of templates has been updated to include reforms made to the Companies Act 2006.
Published on: September 27, 2011