Current legislation provides that where shareholders wish to pass a resolution of the company they may be passed either:
- at a general meeting of the shareholders; or
- where the articles of association allow, by written resolution signed by all of the shareholders entitled to vote at the general meeting.
The Companies Bill 2012 (the Bill) provides for the introduction of significant changes to the way written resolutions can be passed by the shareholders of a company removing the requirement for unanimity and enabling the passing of such resolutions by majority.
The Bill sets out the requirements in relation to the requisite majorities required to pass various types of resolutions and the time-frame that must be observed before the relevant resolution becomes effective. In the case of:
- an ordinary resolution a simple majority is needed but the company must wait seven days from the date the last required signature is received before the resolution takes effect;
- a special resolution three quarters majority is needed but in this case the company must wait twenty-one days from the date the last required signature is received before the resolution takes effect; and
- unanimous resolutions all of the shareholders entitled to attend and vote at general meetings are required to sign and the resolution becomes effective from the date the last shareholder signs.
The Bill states that the officers of the company may face criminal penalties if they do not notify every member of the fact that the resolution was signed by the requested majority and of the date the resolution will be deemed to be passed, within three days of the required signatures being received.
This change is a welcome development and recognises the modern business landscape, where physical meetings are often neither practical nor desirable, and the shareholders may be based in diverse locations.