Company meetings and resolutions – explained

Meetings and resolutions are part and parcel of running a limited company. Whilst optional for private companies, you may find it necessary or beneficial to arrange board and general meetings throughout the life of your business. Doing so will be especially important if your company has more than one director and shareholder.

At these meetings, you will convene to discuss important business affairs and make critical decisions (by passing resolutions) about matters relating to the company. Whenever any such formal meetings and decision-making occur, you must be sure to follow the rules and procedures set out in company law, the articles of association, and any shareholders’ agreement that may exist.

In this post, we discuss company meetings and resolutions in detail. We cover general meetings of members, board meetings of directors, and the different types of company resolutions you may need to pass when making certain decisions.

What is a general meeting in a limited company?

Any formal meeting of limited company members (the shareholders or guarantors) is called a general meeting. The conduct of these meetings is governed by the Companies Act 2006, the articles of association, and any shareholders’ agreement that has been drawn up.

Directors usually call a general meeting when there is a need for members to discuss and make formal decisions on the following types of matters:

• The appointment of directors or the removal of directors
• Changing the directors’ powers
• Altering the articles of association
• Altering the shareholders’ agreement
• The appointment and removal of auditors
• Reviewing annual accounts
• Approving significant financial transactions
• Changing the name or structure of the company
• Altering the company’s objects (its purpose and aims)
• Approving the issue or transfer of shares where the directors are not authorised to do so
• Altering the company’s share capital
• Approving the creation of new share classes
• Dissolving the company

Members themselves also have the power to request a general meeting if they represent at least 5% of the company’s paid-up share capital or voting rights.

Private limited companies are no longer required by law to hold general meetings unless explicitly required under the company’s articles. However, best practice dictates that, at the very least, an Annual General Meeting of the members should be held. 

Providing notice of a general meeting

If a general meeting is called, statutory rules require that a notice period of at least 14 days is given to every member. However, the company’s articles may stipulate a longer notice period. In some instances, a general meeting can be held on short notice with the consent of a majority of members holding at least 90% of the company’s voting rights.

The notice should contain the following information:

• date, time, and location of the meeting
• type of general meeting
• general nature of the business to be conducted
• intention to propose a special resolution (if applicable) and the specific wording of the resolution
• a statement declaring that every shareholder has the right to appoint a proxy
• date the notice is issued
• name of the individual(s) calling the meeting

The company must send notice to every member, the directors, and any person who is entitled to shares upon the death or bankruptcy of a shareholder.

Shareholder decisions at general meetings

Any decisions taken by shareholders at a general meeting are formalised by ‘passing a resolution’. Once passed, these decisions are legally binding. Copies of certain resolutions must be filed with Companies House within 15 days. We discuss different types of resolutions later in the post. 

Minutes of general meetings

Minutes must be taken to officially record the proceedings, the names of all persons present, and any formal decisions that are taken. The company should keep copies of all minutes and resolutions at its registered office or Single Alternative Inspection Location (SAIL address).

What is a limited company board meeting?

A board meeting is a formal meeting of limited company directors. Board meetings are required when directors need to make important decisions, present proposals, raise concerns, review the financial position of the business, and discuss strategies.

By law, there is no requirement for private companies to hold board meetings. However, where a company has two or more directors and members, it is beneficial to hold board meetings at least once a quarter. 

First board meeting of directors

The purpose of the first board meeting of directors is to provide an opportunity for directors to collectively discuss the formalities of the new business, such as:

• familiarising themselves with the company’s articles of association
• determining the duties and responsibilities of directors
• confirming the objectives, vision, and values of the company
• issuing share certificates
• appointing a chairperson of the board
• appointing a company secretary and assigning duties and responsibilities to them
• company accounting, record-keeping, and statutory filing requirements
• confirming the company’s accounting reference date (ARD) and statutory deadlines for filing annual accounts, confirmation statements, and tax returns
• appointing an accountant
• setting up a business bank account
• confirming each director’s remuneration
• hiring staff
• contracts and agreements with suppliers and service providers
• marketing strategies and other important business strategies

Statutory rules governing limited company board meetings require that minutes are taken to officially record the proceedings, even if the company has just one director.

Taking minutes of meetings

Aside from being a legal requirement, taking minutes is extremely beneficial because it provides a written record of everything that occurs in a meeting. This greatly reduces the risk of mistakes, miscommunication, and disagreements further down the line. 

Typically, minutes of general meetings and board meetings should contain the following details:

• company name and registered office address
• time, date, and location of the meeting
• name of every person in attendance
• apologies for absences
• any proxies present
• proposals put forth for consideration
• proposed resolutions (‘motions’) put to a vote at the meeting 
• decisions that were taken (any resolutions that were passed)
• names of persons who supported or opposed any proposed resolutions
• queries and objections raised
• any other matters raised or discussed during the course of the meeting
• signature of the director or company secretary

Limited companies must maintain copies of all minutes at their registered office or SAIL address for a minimum period of ten years after the date of the meeting. 

What are company resolutions?

A company resolution is a legally binding decision made by directors or shareholders. If a majority vote is achieved in favour of any proposed resolution, the resolution is ‘passed’ and legally binding.

Shareholders can pass ordinary resolutions or special resolutions at general meetings. Alternatively, certain resolutions can be passed in writing, without the need to call and attend a general meeting.

All types of collective decisions of directors are simply referred to as ‘resolutions’ or ‘board resolutions’. These decisions can be made at board meetings or in writing.

Ordinary resolutions

Ordinary resolutions are used for all types of shareholder decisions other than those requiring a special resolution under the Companies Act 2006, the articles of association, or a shareholders’ agreement.

The types of routine decisions made by ordinary resolution include: 

• appointing and removing directors
• appointing and removing company secretaries
• directors’ employment contracts
• amending the directors’ powers set out in the articles and shareholders’ agreement
• approving annual accounts
• authorising the transfer of shares
• approving shareholder dividends and directors’ loans

To pass an ordinary resolution, a simple majority (above 50%) of eligible shareholders’ votes must be cast in favour of the motion. Members cast their votes on a show of hands or a poll at a general meeting, or by written resolution if a meeting is not required.

Special resolutions

A special resolution is a motion or proposal that requires the approval of at least 75% of the eligible shareholders’ votes. This kind of resolution is reserved for the most important and exceptional decisions that cannot be passed by an ordinary resolution, such as:

• changing a company name
• reducing issued share capital
• issuing more shares
• creating different share classes
• altering the articles of association
• adding, removing, or altering pre-emption rights of shareholders
• re-registering a company
• changing a private company to a public company, or vice versa
• winding up a company by members’ voluntary liquidation

Members cast their votes on special resolutions at general meetings, either on a show of hands or a poll. Alternatively, they may be passed by written resolution, unless restricted under the company’s articles or shareholders’ agreement. 

Special resolutions must be delivered to Companies House by post within 15 days of being passed. A copy must also be given to all shareholders and the company auditor. Furthermore, the company must keep a copy of all resolutions at its registered office address or SAIL address for a minimum period of 10 years.

Written resolutions

Written resolutions are used when shareholders wish to make decisions without the need to call and attend a general meeting. They offer a practical solution where shareholders are unable to convene in person, for example, if they live in different places. 

Any written ordinary resolution must be passed by a simple majority of shareholders’ votes. Written special resolutions require a 75% majority vote. 

Shareholders cast their votes either by signing the written resolution (if it is distributed on paper) or indicating their decision electronically (if it is distributed by email or on a website).

Board resolutions

Board resolutions are formal decisions taken by the directors, either at board meetings or in writing. The types of decisions that company directors can make depend entirely on the powers they are granted by the shareholders. Their rights and powers are outlined in the articles of association and shareholders’ agreement.

Typically, a simple majority vote of the directors is all that is required to pass a board resolution. However, some companies amend their articles to include provisions specifying that a higher majority or unanimous agreement is required for some or all board resolutions.

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