Shareholder resolutions: template written resolutions
Template written shareholder resolutions of a private limited company.
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When do I use this document?
- for written shareholder resolutions of a private limited company
- when resolutions will be approved in writing rather passed at a shareholder meeting
What are the key features?
- template forms of written resolution that can be adapted based on the proposed resolutions
- alternative forms, accommodating either multiple resolutions or a single resolution
- alternative forms depending on whether the company has multiple members or a sole member
- required statements under the Companies Act 2006 to accompany written shareholder resolutions
What else do I need to know?
A private limited company may pass shareholder resolutions in writing without needing to call and hold a shareholder meeting. However, the Companies Act 2006 specifies that certain resolutions must be passed at a meeting and cannot be passed in writing:
- a resolution to remove a director before the end of their period of office pursuant to Section 168 Companies Act 2006
- a resolution to remove an auditor before the end of their term of office pursuant to Section 510 Companies Act 2006
Written shareholder resolutions are usually proposed by the directors. They can also be proposed by shareholders. The proposed resolutions must be sent to all eligible members at the same time (so far as reasonably practicable). An eligible member is one who would have been entitled to vote on the written resolutions on their circulation date. The resolutions can be sent electronically.
The circulation date of written resolutions is the date on which copies are sent or submitted to members (if on different dates, the earliest of those dates).
The resolutions must include a statement informing members:
- how to signify their agreement to the resolutions
- that the resolutions will lapse if not approved within 28 days commencing with the circulation date (or a different period if specified in the Articles of Association)
A written resolution is passed when the required majority of eligible members have indicated their agreement and the company has received the document indicating their agreement. This document can be sent to the company either in hard copy form or in electronic form.
Once a member has signified their agreement to a written resolution, it cannot be revoked.
What other documents are available?
Specific shareholder written resolutions based on these template written resolutions include:
When do I use this document?
- as an advance subscription agreement between the company and a single investor
- where the conversion price will be calculated as a percentage discount to the issue price for shares in the qualified investment round
- if agreed, where there is an agreed valuation cap on the company’s valuation
What are the key features?
- advance subscription terms and payment
- conversion on the occurrence of defined events, including a qualifying financing round, the sale of the company or on a longstop date
- conversion price on a qualified financing round to be at an agreed percentage discount to the qualified financing round share price
- if agreed, a cap on the valuation of the company for the purpose of calculating the conversion price
- warranties regarding the investor’s compliance with Financial Services and Markets Act 2000 regime regarding financial promotions
What else do I need to know?
For detailed discussion regarding the purpose of advance subscription agreements and their benefits and disadvantages for investors and the company, click here.
Negotiating points
Prior to entering into this ASA, the parties will need to consider and agree:
- discount rate: the discounted price per share (expressed as a percentage) at which the ASA investor will receive shares in the qualified financing round
- valuation cap: if agreed, the cap on the valuation of the company for the purpose of calculating the price at which the advance subscription will convert into shares on a qualified investment round
- default valuation: the default valuation of the company which will be used to calculate the conversion price of the advance subscription in circumstances where conversion occurs on the agreed longstop date or the company’s insolvency
- longstop date: the longstop date on which (and in the absence of a prior qualifying financing round) the ASA will automatically convert into shares
- qualified financing round: the minimum amount of funding which the company must raise before that funding round will count as the qualified financing round under the ASA which results in the conversion of the advance subscription into shares
- subscription amount: the amount of the investor’s advance subscription
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Updated by a lawyer on 04/11/2025
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