This is particularly useful when there are difficulties in arranging a shareholders meeting.
The Act also introduced majority written resolutions. To recap: resolutions may be ordinary (passed by the holders of at least 50% of the shares) or special (requiring the approval of the holders of 75% of the shares). Under the Act it is now possible to pass an ordinary resolution or a special resolution in writing if the requisite majority approves. Although this is welcome, there are certain procedural difficulties which may make them difficult to use in practice.
Procedure
The text of the resolution and an explanation of its main purpose must be circulated to all members entitled to attend meetings and vote. A majority ordinary written resolution takes effect seven days after the last signature. A majority special resolution takes effect 21 days after the last signature. These time limits can be waived where a date earlier is specified in the resolution itself or where all shareholders sign a written waiver. It is not possible for a shareholder to waive generally, so the waiver must be obtained in respect of each specific resolution.
The signed written resolution must be delivered by the signatories to the company – the resolution will have no effect until this is done. Upon receipt of the resolution, the company is required to notify all the shareholders of its passing and its date.
A written resolution, either unanimous or majority, cannot be used to remove an auditor or director as this must still be done at a meeting. Majority written resolutions are available for LTDs and DAC’s (unless its constitution provides otherwise), but not for PLC’s, Companies Limited by Guarantee or Unlimited Companies.
Given the delay in effectiveness without a written waiver, in practice majority written resolutions may only be used where it is not possible to obtain a unanimous written resolution.