A Written Resolution is a resolution agreed upon by the majority of a company’s members, signifying their consensus on specific matters without the need for a formal meeting. Under the Companies Act 2006, such resolutions are considered legally binding if certain conditions are met, simplifying the decision-making process for companies.
Historical Context
The concept of written resolutions has evolved over time. Historically, under previous legislation, unanimous approval from all members was necessary. However, the Companies Act 2006 modernized this process, allowing majority approval for ordinary resolutions and a 75% majority for special resolutions.
Types of Written Resolutions
- Ordinary Resolution: Requires a simple majority (over 50%) to pass.
- Special Resolution: Requires a supermajority (75% or more) to pass.
Key Events
- Companies Act 2006: Introduced changes allowing written resolutions with majority consent, enhancing flexibility for private companies.
- Amendments and Cases: Subsequent amendments and legal cases have clarified and refined the implementation of written resolutions.
Detailed Explanations
Requirements for Written Resolutions
- Circulation: Must be sent to all eligible members.
- Consent: Ordinary resolutions need more than 50% approval; special resolutions require at least 75%.
- Timeframe: Specific time limits are provided for responses.
Sample Written Resolution Text
Resolution: To approve the annual budget for the financial year 2024-2025.
Ordinary Resolution: 70% approval received. Resolution passed.
Mermaid Diagram: Process Flow
graph TB
A[Proposal of Resolution] --> B[Circulation to Members]
B --> C[Member Votes]
C --> D{Does it meet required threshold?}
D -- Yes --> E[Resolution Passed]
D -- No --> F[Resolution Failed]
Importance and Applicability
- Efficiency: Bypasses the need for physical meetings.
- Flexibility: Can be enacted at any time.
- Cost-effective: Reduces administrative expenses associated with meetings.
Examples
- Approving Financial Statements: Many companies use written resolutions for routine approvals.
- Amending Articles: Special resolutions often involve changes to the company’s articles of association.
Considerations
- Compliance: Ensure adherence to legal requirements.
- Member Notification: Effective communication is crucial.
Related Terms
- Company Meeting: A formal gathering of company members.
- Proxy Voting: Voting on behalf of a member not present.
Comparisons
- Physical Meeting vs. Written Resolution: Meetings offer discussion; written resolutions offer speed and convenience.
Interesting Facts
- The shift to written resolutions has significantly reduced the number of company meetings held annually.
Inspirational Stories
- Innovative Solutions: Many startups successfully leverage written resolutions to make swift decisions and stay competitive.
Famous Quotes
- “In every deliberation, we must consider the impact on the seventh generation.” – Great Law of the Iroquois.
Proverbs and Clichés
- “Time is money.”
Expressions, Jargon, and Slang
- Quorum: The minimum number of members required to hold a valid meeting.
- Circulate: Sending the resolution to all members for approval.
FAQs
What is a written resolution?
How many votes are needed for a written resolution to pass?
Can public companies use written resolutions?
References
- Companies Act 2006
- Legal texts on corporate governance
Summary
Written resolutions under the Companies Act 2006 offer a streamlined approach to corporate decision-making, allowing companies to bypass the logistical challenges of physical meetings. By understanding their requirements, advantages, and practical applications, companies can effectively use written resolutions to maintain operational efficiency and compliance.
