Director and Member Proposed Versions

August 2020

The Corporate Insolvency and Governance Act 2020 has temporarily introduced greater flexibility for companies as to how they should conduct general meetings due to social distancing requirements. For many private companies however, they will be able to pass shareholder resolutions by the written resolution procedure and will not need to hold general meetings except in certain limited circumstances.

In light of this focus on how shareholder resolutions are passed, our template written resolutions have been refreshed, modernised and made more user friendly.

Updates have been made to our standard written ordinary and special resolution templates by creating a standard written resolution for a single resolution, either ordinary or special and a standard written resolution for multiple resolutions, either ordinary, special or a mixture of both. These written resolutions are all proposed by the directors of the company.

In accordance with Part 2, Chapter 13 of the Companies Act 2006, written resolutions can be proposed by either the directors or the members of a company. In practice, most resolutions will be proposed by the directors who run and manage the company. However, there will be situations where the members (or a certain proportion of them), will want to propose a written resolution. This will usually only be the case where the directors will not propose a resolution and the members wish to force a resolution through against the directors’ wishes.

Sections 292-295 of the Companies Act 2006 set out the procedure for circulating written resolutions proposed by the members and must be strictly followed.

Additional single and multiple resolutions proposed by the members, for use in this limited circumstance, have also been created. In addition, a template statement on the subject matter of the relevant resolution, that the members can require the company to circulate with the written resolution, has been added to the portfolio of documents.

These new and updated templates will be of interest to company directors, secretaries and administrators.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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