Why written resolutions matter for your company

Companies make decisions in two ways: the directors decide day-to-day matters, and the shareholders (also called members) decide bigger matters. For a private limited company, the easiest way for shareholders to decide is often a written resolution. This guide explains what it is and why it matters.

What is a written resolution?

A written resolution is a formal shareholder decision made in writing, without a general meeting. The resolution is sent to every eligible shareholder, who can agree by signing and returning it, often by email if the company allows.

Written resolutions are available to private companies under the Companies Act 2006. Public companies (PLCs) generally must hold meetings.

Why it matters

• It saves time. Shareholders in different countries do not need to meet.
• It creates a clear record. A signed resolution shows exactly what was agreed and when.
• Banks, lawyers and Companies House may ask for it. For example, when you change the company name, adopt new articles or allot new shares in some cases.
• It protects directors. Acting without proper approval can leave a decision open to challenge.

Ordinary and special resolutions

• Ordinary resolution - passed by a simple majority (more than 50%) of eligible members' votes. Used for things like appointing a director by shareholders or giving directors authority to allot shares.
• Special resolution - passed by at least 75%. Used for bigger changes, such as changing the company name (unless the articles allow another method), changing the articles of association, or reducing share capital.

For a written resolution, the majority is counted against all eligible members, not just those who reply.

What a written resolution cannot do

Two decisions cannot be made by written resolution:

• Removing a director before the end of their term (under section 168).
• Removing an auditor before the end of their term.

These need a general meeting, because the person being removed has a right to be heard.

How the process works

1. The directors (or members) propose the resolution. It must be clearly worded.
2. Circulate it to every eligible member at the same time, with a statement explaining how to agree and the date by which it must be passed.
3. Members sign and return it. Each member indicates agreement.
4. It passes as soon as the required majority agrees. If not enough members agree within the period, it lapses. The period is 28 days from circulation unless the articles say otherwise.
5. File it if required. Special resolutions, and some other resolutions that affect the company's constitution, must be sent to Companies House within 15 days of being passed.
6. Keep a record. Companies must keep copies of resolutions, usually for at least 10 years.

Board resolutions are different

Directors also pass resolutions, called board resolutions, often recorded in board minutes. These cover management decisions such as opening a bank account or approving accounts. They are not the same as shareholder written resolutions, but both should be properly recorded.

Common mistakes

• Not sending the resolution to all eligible members.
• Using the wrong majority.
• Forgetting the 15-day filing deadline for special resolutions.
• Not keeping signed copies with the company records.
• Using a template that does not match your articles of association.

Every company's articles can add their own rules, so check yours or ask a solicitor if the decision is important.

How Form My Company can help

We prepare written resolutions and board minutes for common decisions, such as name changes, share issues and director changes – see our Resolutions and Minutes service. If your resolution is for a new name or new shares, we handle the filing too, through our Name Change and Share Issue and Transfer services.

Frequently asked questions