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Making Decisions—Resolutions for Proprietary Limited Companies

Section 251A of the Corporations Act 2001 sets out the requirements regarding the preparation and signing of minutes of meetings and resolutions of both directors and shareholders. Among other things, it is required that all proceedings and resolutions of shareholders and directors are recorded in the company’s minute books within one month.

Minutes of a meeting must be signed within a reasonable time after the meeting by either the chair of that meeting or the chair of the next meeting. Note: The terms “shareholder” and “member” can be used interchangeably.

Directors’ Resolutions

The directors are responsible for managing the business and affairs of the company subject to any rights or powers reserved to the shareholders.

Decisions of the directors are made by resolutions which can be passed either by holding a meeting (subject to quorum and other procedural matters) or by the director/s of a company entitled to vote signing a circulated resolution without an actual meeting being held. Where there is more than one director, a circulated written resolution is effective when the last director signs the resolution.

The following two templates can be used for any resolutions to be passed by directors:

Circulating resolution of companies with more than one director

Section 248A of the Corporations Act 2001 allows the directors of a company to pass a resolution without a directors’ meeting being held if all the directors entitled to vote on the resolution sign a document containing a statement that they are in favour of the resolution set out in the document. The resolution is passed when the last director signs.

Resolution of a single director company

Section 248B of the Corporations Act 2001 allows the sole director of a proprietary company to pass a resolution by recording it and signing the record.

Email us now for templates of common resolutions passed by directors. Note: these templates assume an actual meeting is held but the text of the resolutions can also be used if no meeting is to be held using the format above for a circulating resolution.

Standard template for minutes of a Directors’ meeting.
Appointment/Resignation of Director.
Appointment/Resignation of Secretary.
Approval of registered office.
Approval to Transfer Shares.
Solvency Resolution

Section 347A(1) of the Corporations Act 2001 requires that the directors of a company must pass a solvency resolution within 2 months after each annual review date for the company.

Note: You may need to advise ASIC of some of the above resolutions. There may be a deadline and late fees may apply.

Shareholders’ Resolutions

There are two types of Company resolutions that can be made by a meeting of the company’s shareholders or members. These are commonly called ordinary and special resolutions.

Ordinary Resolutions

The Corporations Act 2001 does not specifically define the requirements for an ordinary resolution, but it is generally understood to be a majority of the shareholders entitled to vote (i.e. more than 50%) and present at a meeting to pass the resolution. Unless the Corporations Act, the Constitution or a shareholders’ agreement specifies that a matter requires more than a bare majority to pass a resolution, an ordinary resolution would be sufficient to decide the matter.

Special Resolutions

A special resolution is a resolution of which notice of the resolution has been given to the members and has been passed by at least 75% of the votes cast by members entitled to vote on the resolution. Decisions of a company that require a special resolution are usually prescribed in the Corporations Act 2001 and may also be set out in a company’s Constitution or a shareholders’ agreement.

Email us now for templates that can be used for resolutions to be passed by shareholders:

Circulating written resolution of proprietary limited company with more than one shareholder.

Section 249A(1) of the Corporations Act 2001 allows a company to pass a resolution without a general meeting being held if all the members entitled to vote on the resolution sign a document containing a statement that they are in favour of the resolution set out in the document. Each member of a joint membership must sign. The resolution is passed when the last member signs.

Resolution of single shareholder company

Section 249B(1) of the Corporations Act 2001 allows a company that has only one member to pass a resolution by the member recording it and signing the record.

The following templates available from Pym's Technology Lawyers are for common resolutions passed by shareholders. Note: these templates assume an actual meeting is held but the text of the resolutions can also be used if no meeting is to be held using the format above for a circulating resolution.

Appointment of a representative for a body corporate.
To remove a director and appoint a new director.

The following templates are for shareholders’ resolutions which must be passed as a special resolution. These templates assume a meeting is held but the text of the resolutions can also be used if no meeting is to be held using the format above for a circulating resolution.

To adopt, replace or amend the Company’s Constitution.

Section 136 of the Corporations Act 2001 requires that a company may adopt a constitution or modify or repeal its constitution, or a provision of its constitution, by special resolution.

To change the name of the Company.

Section 157(1) of the Corporations Act 2001 requires that if a company wants to change its name, it must pass a special resolution adopting a new name. An application must also be lodged with ASIC in the prescribed form. A copy of the special resolution must be lodged with ASIC within 14 days after it is passed.

Email us now for any of the Resolution Templates described here, return to Doing Business Basics main page, or select a contract template below.

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