There are circumstances in which it is not possible to hold a meeting of the board of directors of a company, in which case the directors may act using a written resolution by unanimous decision. However, it is advisable to use the services of a corporate lawyer to find out in which cases such solutions are possible.
Unanimous written resolution
By the law, with the unanimous decision of the remaining directors, it is possible not to notify those directors absent from the state at the time of the meeting. However, suppose you are interested in corporate governance assistance. In that case, it is worth noting that such a written decision procedure will only have legal effect if it is approved by national law.
This procedure gives directors greater flexibility in making decisions, as they are not required to attend a traditional board meeting. Also, preparing a written resolution for directors is convenient in cases where the transactions are purely formal, and the directors will agree to the proposed actions.
Requirements
Decisions of the directors, taken under a written resolution, must be unanimous so that all eligible directors (having the right to vote on the relevant issue) have the same opinion on one topic. Thus, unlike a company board meeting, the chairman does not have a second or final vote on any proposed action.
A written resolution may consist of several documents of the same form, each of which must be signed by one or more directors and becomes effective from the moment it is signed by the last director. This procedure is intended to facilitate the adoption of written resolutions when one or more directors cannot sign the same piece of paper. The signed document may be distributed electronically for signature, but the company must retain the original along with the minutes of the board in the manner prescribed by law.
Quorum
As a general rule, the company’s articles of incorporation establish any quorum deemed necessary for the directors’ decision. It is important to understand that even if each director has the opportunity to sign a contract, no transaction can be concluded if the number of directors involved is less than the established quorum; however, such a quorum meeting/writing is permitted if the company’s articles of association provide that the directors may act regardless of any number.
Can all company directors use written resolutions?
Under this law, the written resolution procedure may be applied to both private and public companies. However, given that the management of private companies can sometimes be less formal, written resolutions are more inherent in private entities.
Corporate lawyers in England point out that holding a traditional meeting of directors is necessary in cases where the transaction is controversial or if, for any reason, it is expected that the decision will not be supported unanimously. Also, the directors must always meet when they declare the company’s solvency as part of the summary approval procedure for limited activities. However, if the company’s charter provides such a possibility, then an audio or video conference of directors may be held.