Company Resolution

Definition (What is Company Resolution?)

A company resolution is a formal decision of the company made at meetings of the board of directors or at meetings of the shareholders.

Adopting a Resolution Mean

In law, resolution is a written motion adopted by a deliberative body. The substance of the resolution can be anything that can normally be proposed as a motion. An alternate term for a resolution is a resolve. Resolutions are commonly used in corporations and Companies Act.

Types of resolutions available for a company

Whenever there is a formal decision to be made then company resolutions are needed.

Determination of type of resolutions

The kind of resolution needed whether special or ordinary and by whom whether the board of directors to pass them or shareholders to pass them, is determined by the Companies Act in Singapore and Constitution of the company.

Passing the Resolutions in the company

Company resolutions can be passed by two (2) groups of people:

Shareholders (Members)
Board of directors

Members (Shareholders) Resolution:	When shareholders make a formal decision, it is known as a shareholder resolution.
Directors (Board) Resolution:	When the board of directors makes a formal decision, it is known as a board resolution.
Sole Shareholder cum Director:	In a company which has only one shareholder, a resolution is passed by the shareholder recording the resolution and signing the record.

Board Resolutions (Directors Resolutions)

The board of directors of a company manage the business of the company, and section 157A of the Companies Act provide that directors make all decisions for the company, except those the Companies Act or the Constitution of the Company (fka: memorandum and article of association of the company) require the shareholders to make.
The board of directors make formal decisions of the company by passing board resolutions. Board resolutions are needed for decisions of the company, where the Companies Act or the company constitution specifies that they are needed, or where external parties request for them.
For example, banks may require a board resolution to prove that an employee has the authority to take a loan for the company. Board resolutions are passed by a simple majority, unless otherwise stated in the company constitution.
Examples of decisions where the company can pass a board resolution, in accordance with the Companies Act:

Opening a bank account and authorising employees for transactions
To appoint an audit committee

The Directors are commonly facing the following issues which are subject to the requirement of passing resolutions:

The following list is not exhaustive as they are subject to vary across different companies based on the nature of structures and/or businesses:

Resolution to be passed for

Appointment of Auditor
Appointment of CEO
Appointment of Directors
Appointment of Secretary
Approval of mergers and acquisitions
Bank account opening for the corporation
Borrowing of Loans
Dividend Declaration (Interim)
Mortgaging the company properties
Sale of company properties
Share Capital Reduction
Share Allotment
Share Transfer

Note:

The above list is including the requirements for both Ordinary and Special Resolutions.

Certified Board Resolution

Everything You Need to Know. A certified board resolution is a written document that provides an explanation of the actions of a company’s board of directors that has been verified by the secretary of the organization and approved by the board’s president.

Members Resolutions (Shareholders Resolutions)

Shareholders can make two types of resolutions:

Special Resolutions
Ordinary Resolutions

Special resolutions

A special resolution is a formal decision passed by at least 75% majority of the votes cast at a meeting. Generally for public companies, 21 days’ written notice must be given for the meeting. For private companies, 14 days’ written notice must be given. However, the meeting can be held at shorter notice if members who hold at least 95% of the voting rights agree. In addition, the company must lodge a copy of all special resolutions with ACRA.
Typically, special resolutions are needed when the decision to be made is especially important. Examples of decisions where the company must pass a special shareholder resolution, in accordance with the Companies Act, include decisions to:

Change any provision in its constitution
Change the company’s name
Reduction of Share Capital

Ordinary Resolutions

An ordinary resolution is a formal decision passed by at least 50% majority of the votes cast at a meeting. 14 days’ written notice must be given for the meeting. However, the meeting can be held at shorter notice if members who hold at least 95% of the voting rights agree.
Examples of decisions where the company has to pass an ordinary resolution, in accordance with the Companies Act, to:

Appoint or re-appoint a director who is above 70 years of age
Decide that a general meeting is the annual general meeting of the company
Removal of a director before the expiration of his contract

Key difference between Ordinary Resolution and Special Resolution

An ordinary resolution is refers to a resolution, passed by the members of the company by a bare majority. A special resolution, on the other hand, is the resolution, that is affirmed by the members of the company by three-fourth majority.

Passing a Company Resolution

Means of Resolutions	Details
At physical meetings	Traditionally, resolutions are passed at physical meetings of the company’s shareholders or board of directors. Board resolutions may be made at a meeting of the board of directors, while shareholders’ resolutions may be made at a general meeting of shareholders.
By written means	It may not always be convenient to hold physical meetings with the relevant parties physically present. A company can choose to pass a resolution by written means instead.
Note: If a significant number of voters disagrees with passing the resolution through written means, Section 184D of the Companies Act provides that holders of 5% of the voting rights can require that a physical meeting be convened instead of proceeding with the written resolution.

First Board Meeting (FBM) Resolution of a Pte Ltd Co. (Private Limited Company) in Singapore

The first board meeting should be held within the first month from the date of incorporation. Commonly, it’s being held immediately upon incorporation.

At this meeting, generally the following matters will be confirmed and passed as resolutions at the First Board Meeting:

Contents of First Board Meeting

Certificate of Incorporation
Constitution of the Company
Appointment of the first directors
Appointment of first Secretaries
Appointment of first Auditor (if mandatory under Acts)
Address of Registered Office
Place where the Members Index being kept
First Financial Year End (FYE)
Subsequent Financial Year End (FYE)
Details of Allotment and Issuance of Shares
Common Seal (no longer required for Share Certificates in Singapore)

Note:

This resolution is titled the First Board Meeting (FBM) resolution.

Purpose of Resolution Minutes

A resolution is written documentation describing an action authorized by the board of directors of a corporation. The minutes are a written document that describes items discussed by the directors during a board meeting, including actions taken and resolutions passed.

Difference between a resolution and minutes

A resolution is a written document that describes the actions taken by the board of directors of a corporation. The minutes are a written document that describes actions taken and resolutions passed by the directors during a regular board meeting.

Difference between a Board Resolution and a Motion

A motion is a proposal from a member of the meeting whereas a resolution reflects the general opinion of the board. Generally speaking, a motion can be put forward verbally whereas a resolution is written down and recorded.

LLC Corporate Resolution

An LLC corporate resolution is a record of a decision made through a vote by the board of directors or LLC members. Limited liability companies (LLCs) enjoy specific tax and legal benefits modeled after a corporate structure, although they are not corporations.

Signing the Resolutions by the Board Members

A resolution is considered an official board action and it requires a quorum. Board directors must document all official board actions, including resolutions, in their meeting minutes. Before voting on a resolution, they need to be aware of any requirements for a quorum as specified in the Constitution of the Company.

Signed Resolution

A resolution signed by all directors is as valid as if the resolution had been passed at a meeting. A written resolution must be signed by all directors. By signing written resolutions directors forgo their ability to discuss matters physically.

Seeking professional service provider for preparation of Company Resolutions

Whenever your existing Private Limited Company requires any types of corporate formal decisions to be made then you are obligated to check whether any resolution is to be passed which you could dedicate the tasks to ACHI for seamless transactions. Many shareholders and directors in private companies prefer to engage a Corporate Service Provider (CSP) like ACHI to assist with handling the matters related to Resolutions and for various other matters which may arise in the course of the transactions.

Resolutions For Cos.