Local Companies » Resolutions And Voting

A company resolution is a formal decision made at

1. Meetings of the board of directors or at
2. Meetings of the shareholders.

Where resolutions are passed by the

1. Shareholders, the resolutions are known as shareholder resolutions.
2. Board of directors, the resolutions are known as board resolutions.

Board resolutions

Board resolutions are passed by the board of directors for decisions of the company when it is required by the Companies Act (“CA”) or by the Constitution of the company or by external parties.

Examples of board resolutions that are passed by the Board of directors may include:

1. Opening of a corporate bank account
2. Appointment of company officers such as a director, a secretary, auditors
3. Change in bank signatories
4. Sales of company assets above a certain limit
5. Issue of shares
6. Approve mergers and acquisitions
7. Appointment of an audit committee
8. Authority given to the employees to sign a loan on behalf of the company
9. Issue of power of attorney to an executive of the company

The above list is not exhaustive and differs between companies.

Shareholder resolutions

Shareholders can pass/approve two (2) types of resolutions:

1. Ordinary resolutions – passed by a simple majority of members present and voting.
2. Special resolutions – passed only by at least 75% of members present and voting at a meeting.

At the shareholder meetings, voting may be by a show of hands or by a poll.

On a poll, the general rule is that each share carries one vote unless the Articles of Association provides otherwise.

Examples or ordinary resolutions that are passed by the shareholders may include:

1. The approval of the annual accounts of the company laid before the shareholders;
2. The appointment of new directors under S149B of CA;
3. The retirement and re-election of the directors (if applicable);
4. The removal of directors of a public company under S152 of CA
5. Approval of the Director’s fees;
6. Approval of final dividends to be declared and paid.
7. The re-appointment of auditors and their remuneration fixed;
8. Redenomination of shares by converting the share capital of the company from one currency to another currency under S73(1) of the CA.

Examples of special resolutions that are passed by the shareholders may include:

1. Alteration or addition made to the Constitution required under S26 of CA
2. Change of company name required under S28 of CA
3. Change from public to private company and vice versa required under S31(1) of CA
4. Alterations of objects in the Constitution of the company required under S33(1) of CA
5. Reduction of share capital by private company (S78B of CA) or by public company (S78C of CA)
6. Reduction of share capital subject by order of the Court (S78G of CA)
7. Issue of shares with different voting rights by public company required under S64A(3) of CA.
8. Conversion of shares from one class to another by public company provided approved by its Constitution under S74A of CA.
9. Approval required from shareholders for the issue of shares by directors under S161 of CA.

The list is non-exhaustive and will vary among different companies.

Registration and copies of certain resolutions

According to S186(1) of the CA, a copy of 

1. every special resolution; and
2. every resolution, including any resolution passed under S175A(1)(a) when all the members of a private company has passed the resolution to dispense with the holding of an annual general meeting (“AGM”), which effectively binds the shareholders whether agreed by all the members of that class or not

has to be lodged with ACRA within 14 days except where otherwise expressly provided by the CA.

Examples of resolutions that are required to be lodged with ACRA are”

1. All special resolutions
2. All ordinary resolutions which effectively binds the shareholders
3. Special resolution for change of name
4. Special resolution for reduction of capital
5. Alteration of Constitution under S26(2) of the CA
6. Alteration of objects in Constitution under S33 of the CA
7. Notice of resolution for voluntary winding up of the company
8. Resolution under S768(9) of the CA

S186(3) states that if the above obligations are not complied with, the company and every officer of the company shall be liable on conviction to a fine of up to $1,000 and also to a default penalty.

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