Resolutions

Resolutions at Meetings

The shareholders act by resolutions passed at general meetings. Details of the proposed business should be given in the notice of the meeting. In the case of special resolutions, the precise wording of the resolution should be given. This also desirable where a non-routine ordinary resolution is proposed.

Ordinary resolutions require more than 50% of the votes of those entitled to vote. Special resolutions require at least 75% of the votes of those entitled to vote. Where a class meeting of shareholders is required, the requisite majority is that of the particular class of shareholders.

21 days’ notice of an annual general meeting or an extraordinary general meeting at which a special resolution is proposed, is usually required. 7 days’ notice is required of other extraordinary general meetings. The constitution may provide for longer periods of notice.

28 days’ notice of a resolution to remove a director or not to reappoint the auditor must be given to the company, which must then give 21 days notice to the members.

A resolution signed by all of the shareholders entitled to attend and vote is valid notwithstanding that no meeting is held. This facility was available to private companies under standard articles.  In the case of a single-member company, a record in writing of the matters decided by the single shareholder is sufficient. The 2014 Act allows for a written resolution by the majority, subject to compliance with conditions.


Passing the Resolution

An ordinary resolution is passed by a simple majority (in value) of the votes of the members of the company entitled to vote in person or by proxy. A special resolution is passed by not less than 75% (in value) of the votes of the members entitled to vote, in person or by proxy.

21 days’ notice of a meeting to pass a special resolution is usually required. A resolution may be proposed and passed as a special resolution at a meeting of which at least 21 days’ notice has been given if it this is agreed by a majority of the members having the right to attend and vote at such a meeting. The majority must either together hold not less than 90% in nominal value of the shares having that right or must together represent not less than 90% of the total voting rights at that meeting of all the members.

A special resolution may be passed at a meeting with less than 21 days’ notice with the agreement of all members entitle to attend and vote (and if applicable, the statutory auditors).

The terms of a resolution (whether ordinary or special) before a general meeting may be amended by an ordinary resolution moved at the meeting, provided that the terms of the resolution as amended is still such that adequate notice of it has been given.

Where a resolution is passed at an adjourned general meeting, it shall for all purposes be treated as having been passed on the day it was in fact passed and not any earlier date.


Unanimous Written Resolutions

Private limited companies may pass written resolutions unanimously.  This is so regardless of what their constitution provides. A resolution in writing, signed by all members for the time being entitled to attend and vote on such resolution at a general meeting, is valid and effective for all purposes as if it had been passed at a general meeting of the company duly convened and held. If described as a special resolution, it is deemed a special resolution.

A resolution passed in the above manner may consist of several documents in like form, each signed by one or more of the members. It is deemed to be passed on the date on which it was signed by the last member. Where the resolution bears a date of signature by any member, the statement is presumptive evidence that it was signed by him or her on that date.

The provisions do not apply to a resolution to remove a director; or a statutory auditor. It does not affect any rule of law as to things done otherwise than by passing a resolution, the circumstances in which a resolution is deemed as passed or not passed or cases in which a person is precluded from alleging that a resolution has not been passed.


Procedural Requirements for Unanimous Written Resolution

The signatories shall, within 14 days of the unanimous written resolution being passed, procure delivery to the company of the documents constituting the written resolution. This is without prejudice to the use of the other means of delivery allowed under the Companies Act. Delivery may be by electronic mail or the use of facsimile machine.

If the resolution is not contemporaneously signed, the company must notify the members within 21 days after the date of delivery to it or the documents constituting the written resolution, of the fact that it has been passed.

The company shall retain the documents as if they constituted minutes of the proceedings of a general meeting. The terms of the resolutions concerned shall be entered in books kept for that purpose. Non-compliance with the above procedural requirements on the part of the member or of the company does not invalidate the resolution.

If a signatory fails to take all reasonable steps to procure the delivery of the resolution, he is guilty of a category 4 offence. If the company fails to give notice of the resolution to the members where required, the company and persons in default are guilty of category 4 offences.


Majority Written Resolutions

The 2014 Act allows for majority written resolutions for the first time. A resolution described as being an ordinary resolution, signed by the requisite majority of the members concerned, in relation to which the below-mentioned conditions have been satisfied, is deemed as valid and effective as a resolution passed at a general meeting of the company duly held and convened. The resolution may consist of several documents in like form, each signed by one or more members.

It is a condition for a valid majority written resolution that all members entitled to attend and vote on the resolution, have been circulated by the directors or other person proposing the resolution, with the proposed text of the resolution and an explanation of its purpose.

The requisite majority for an ordinary resolution comprises a member or members who alone or together, at the time of the signing of the resolution, represent more than 50% of the total voting rights of the members who would have been entitled to attend and vote at the general meeting. In the case of a special resolution, the requisite majority is at least 75% of the total voting rights of all members who, at that time, would have the right to attend and vote at the meeting.


Procedural Requirements for Majority Written Resolutions I

The majority written resolution is deemed to be passed, at a meeting held seven days after it was signed by the last member, in the case of an ordinary resolution and twenty days after that date, in the case of special resolution. Where the resolution states a date as being the date of signature, this is presumptive evidence that it was signed by the signatory on that date.

If a date earlier than the above effective date is specified in the resolution as the date on which the resolution was passed (not being earlier that the date of the last signature) and all members of the company  entitled to attend and vote on that resolution may by written waiver, vary the deemed date on which it is passed. The written waiver is also delivered to the company with the resolution. The resolution is deemed to be passed on the date specified in it. A written waiver may consist of several documents signed by each member.


Procedural Requirements for Majority Written Resolutions II

The signatories to a resolution shall procure delivery to the company of the documents constituting that written resolution. Without prejudice to other means of delivery, the delivery may be electronic or by facsimile. The company shall retain the documents as if they constituted minutes of a general meeting. They are to be entered in books kept for that purpose

Within three days of the date of delivery to it of the documents comprising the resolution, the company shall notify every member of the fact that the resolution has been signed by the requisite majority of members and the date on which it is deemed to be passed. If the company fails to give notice as above, the company and every person in default are guilty of a category 4 offence.

The requirement to deliver the documents comprising the resolution to the company is a condition of the validity of the resolution.  However, the failure to file minutes or deliver notice of the resolution to the members does not invalidate it.


Single Member Resolutions

Special provisions apply to single-member companies. A single-member company is a company that is specifically designated as a single-member company or a company in respect of which, there is in fact, a single member.

All the powers exercisable by a company in general meeting are exercisable by the sole member without the need to hold a general meeting for that purpose. This includes the power to remove a director. The requirements regarding notice to the director or making of representations by the director shall not apply in the case of a single-member company. However, this does not limit the requirements of procedural fairness in the exercise of the power of removal of a director by the sole member.

The sole member may not remove the statutory auditor, or not continue the statutory auditor in office, without holding the requisite meeting provided for in that regard.

Any provision in the Companies Act which enables or requires any matter to be done or decided by the company in general meeting, or requires any matter to be decided by a resolution of the company, is deemed satisfied, in the case of a single-member company, by a decision of the member which is drawn up in writing and notified to the company in accordance with the below procedural requirements.


Procedural Requirements for Single Member Resolutions

Where the sole member takes any decision, which is to have the effect as a resolution, the member shall provide the company with a written record of the decision, unless the decision is taken by way of written resolution which the member has already forwarded to the company.

Where the sole member notifies the company of the decision by a written resolution, a written record of a decision shall be recorded and retained by the company in its books or by other suitable means maintained for the purpose, equivalent to minute books.

Where the sole member of a single-member company exercises or discharges, any power, right or obligation, which involves or consists of the passing of a resolution, which is required to be registered in the CRO, it must be so registered in within 15 days by the company.

If the sole member fails to comply with the obligation to notify the company or the company fails to comply with the obligation to enter the resolution in minute books, or where applicable, file the resolution with the CRO, the company and the officer in default is guilty of a category 4 offence. The failure by the sole member to provide the company with a written record of the decision does not invalidate the decision.


Filing of Resolutions in CRO

The following categories of resolution must be filed in the CRO within 15 days of being passed. They must be accompanied by the requisite fee. A copy of every such resolution or agreement for the time being in force shall be embodied in, or annexed to, any copy of the constitution of the company, where relevant.

The categories of resolutions are

  • resolutions required by the Companies Act to be special resolutions;
  • resolutions or agreements which have been agreed to by all the members but which if they were not so agreed, would not be effective unless they had been passed as a special resolution;
  • resolutions or agreements which have been agreed to by all the members or a class of shareholders but which if they were not so agreed, would not be effective unless they had been passed by a particular majority or otherwise in a particular manner,;
  • resolutions or agreements which effectively bind all members of any class of shareholders, although not agreed to by those members;
  • resolutions increasing or decreasing authorised share capital;
  • resolutions conferring authority for the allotment of shares;
  • resolutions that the company be wound up voluntarily;
  • resolution attaching rights or restrictions to shares;
  • resolutions varying any such rights or restriction;
  • resolutions classifying any unclassified shares;
  • resolutions converting share capital into stock or stock into share capital.

Failure to do any of the above (registration, payment of fees or annexation to the constitution) is an offence for which a company and an officer in default is guilty of a category 4 offence.


References and Sources

Primary References

 

Companies Act 2014 (Irish Statute Book)

Companies Act 2014: An Annotation (2015) Conroy

Law of Companies 4th Ed.  (2016)  Ch.14  Courtney

Keane on Company Law 5th Ed. (2016) Ch.25 Hutchinson

Other Irish Sources

Tables of Origins & Destinations Companies Act 2014 (2016) Bloomsbury

Introduction to Irish Company Law    4th Ed. (2015) Callanan

Bloomsbury’s Guide to the Companies Act 2015      Courtney & Ors

Company Law in Ireland 2nd Ed. (2015) Thuillier

Pre-2014 Legislation Editions

Modern Irish Company Law   2nd Ed. (2001) Ellis

Cases & Materials Company Law 2nd Ed. (1998) Forde

Company Law 4th Ed. (2008)  Forde & Kennedy

Corporations & Partnerships in Ireland (2010) Lynch-Fannon & Cuddihy

Companies Acts 1963-2012   (2012)  MacCann & Courtney

Constitutional Rights of Companies   (2007)  O’Neill

Court Applications Under the Companies Act (2013) Samad

Shorter Guides

Company Law – Nutshell 3rd Ed. (2013) McConville

Questions & Answers on Company Law (2008)        McGrath, N & Murphy

Make That Grade Irish Company Law 5th Ed. (2015) Murphy

Company Law BELR Series (2015)   O’Mahony

UK Sources

Companies Act 2006 (UK) (Legilsation.gov.uk)

Statute books Blackstone’s statutes on company law (OUP)

Gower Principles of Modern Company Law 10th Ed. (2016) P. and S. Worthington

Company Law in Context 2nd Ed. (2012) D Kershaw

Company Law (9th Ed.) OUP (2016) J Lowry and A Dignam

Cases and Materials in Company law 11th Ed (2016) Sealy and Worthington

 

UK Practitioners Services

Tolley’s Company Law Handbook

Palmer’s Company Law