Company Resolutions: What are They?
What is a Company Resolution?
A company resolution is a formal decision of the company made at meetings of the board of directors, or at meetings of the shareholders.
Who can Make Company Resolutions?
Company resolutions can be passed by 2 groups of people:
- Board of directors
When shareholders make a formal decision, it is known as a shareholder resolution. When the board of directors makes a formal decision, it is known as a board resolution. However, in a company which has only one shareholder, a resolution is passed by the shareholder recording the resolution and signing the record.
Types of Company Resolutions
Company resolutions are needed whenever there is a formal decision to be made. The kind of resolution needed (whether special or ordinary), and by whom (whether the board of directors or shareholders), is determined by the Companies Act and the company constitution.
The board of directors of a company manage the business of the company, and section 157A of the Companies Act provide that directors make all decisions for the company, except those the Companies Act or the memorandum and article of association of the company require the shareholders to make.
The board of directors make formal decisions of the company by passing board resolutions. Board resolutions are needed for decisions of the company, where the Companies Act or the company constitution specifies that they are needed, or where external parties request for them.
For example, banks may require a board resolution to prove that an employee has the authority to take a loan for the company. Board resolutions are passed by a simple majority (i.e. more than 50%), unless otherwise stated in the company constitution.
Examples of decisions where the company can pass a board resolution, in accordance with the Companies Act:
- Opening a corporate bank account and authorising employees for transactions
- To appoint an audit committee
For more information, read our article on board resolutions in Singapore.
On the other hand, shareholders can make two types of resolutions. The two types are special resolutions, and ordinary resolutions.
A special resolution is a formal decision passed by at least 75% majority of the votes cast at a meeting. Generally for public companies, 21 days’ written notice must be given for the meeting. For private companies, 14 days’ written notice must be given. However, the meeting can be held at shorter notice if members who hold at least 95% of the voting rights agree. In addition, the company must lodge a copy of all special resolutions at ACRA.
Typically, special resolutions are needed when the decision to be made is especially important. Examples of decisions where the company must pass a special shareholder resolution, in accordance with the Companies Act, include decisions to:
An ordinary resolution is a formal decision passed by a simple majority (i.e. more than 50%) of the votes cast at a meeting. 14 days’ written notice must be given for the meeting. However, the meeting can be held at shorter notice if members who hold at least 95% of the voting rights agree.
Examples of decisions where the company has to pass an ordinary resolution, in accordance with the Companies Act, to:
- Remove a director before the expiration of his period of office
- Appoint or re-appoint a director who is above 70 years of age
- Decide that a general meeting is the annual general meeting of the company
How to Pass a Company Resolution
At physical meetings
Traditionally, resolutions are passed at physical meetings of the company’s shareholders or board of directors. Board resolutions may be made at a meeting of the board of directors, while shareholders’ resolutions may be made at a general meeting of shareholders.
By written means
It may not always be convenient to hold physical meetings with the relevant parties physically present. A company can choose to pass a resolution by written means instead. In the event that a significant number of voters disagrees with passing the resolution through written means, Section 184D of the Companies Act provides that holders of 5% of the voting rights can require that a physical meeting be convened instead of proceeding with the written resolution.
If you need assistance preparing company resolutions, consider engaging a professional corporate secretarial firm.
This article was written by Averill Chow
- What are Annual General Meetings (AGMs) in Singapore?
- Anti-Money Laundering Regulations and Your Business: What You Need to Know
- Price-Fixing, Bid-Rigging and Other Anti-Competitive Practices to Avoid
- Dividend Payments Guide for Singapore Business Owners
- Company Audits in Singapore: Requirements and Exemptions
- Guide to Transferring Shares in a Singapore Private Company
- How to Hold Extraordinary General Meetings (EGMs) in Singapore
- How to Issue Shares in a Singapore Private Company
- How to Reduce the Share Capital of Your Singapore Company
- Legally Conducting Lucky Draws for Singapore Businesses
- Dormant Companies and Their Filing Obligations in Singapore
- How to Hold a Board Meeting in Singapore
- Paid-Up Capital in Singapore: A Complete Guide (Is $1 Enough?)
- Restaurant Inspection and Food Safety Rules in Singapore
- Essential Regulatory Compliance Guide for Singapore Companies
- Finding a Suitable Corporate Secretarial Firm in Singapore
- Oppression of Minority Shareholders
- Process Agents in Singapore
- Shadow Directors: Who are They and What Duties Do They Owe to the Company?
- Guide to Directors' Remuneration in Singapore
- 3 Types of Insurance Every Singapore Business Needs
- How to Change the Name of Your Singapore Company
- How to Remove a Director from a Company in Singapore
- Appointing Company Directors in Singapore: Eligibility, Process etc.
- Company Loans to Directors/Shareholders (& Vice Versa) in Singapore
- Share Transmission: What Happens If a Shareholder Dies in Singapore?
- Business Will: How to Pass on Your Business to Your Successors in Singapore
- Shareholder Rights in Singapore Private Companies
- Removal and Resignation of Company Auditor in Singapore
- Shareholder Roles and Obligations in Singapore Companies
- Creating and Registering Charges in Singapore: Guide for Companies
- How to Commence a Derivative Action on Behalf of a Company in Singapore
- Managing Director vs CEO in Singapore: Roles and Obligations
- Appointing an Authorised Representative for a Singapore Business
- Business Partnership Disputes in Singapore: How to Resolve
- Appointing a Company Secretary: Roles and Responsibilities
- Directors' Duties in Singapore
- Company Constitutions in Singapore and How to Draft One
- Company Memorandum and Articles of Association
- Minutes of Company Meeting in Singapore: How to Record
- Guide to Filing Financial Statements for Singapore Business Owners
- Filing Annual Returns For Your Business
- Memorandum of Understanding (MOU): Does Your Business Need One?
- Company Resolutions: What are They?
- Board Resolutions in Singapore
- How to Set Up a Register of Controllers
- How to Set Up a Register of Nominee Directors
- Your Guide to Resolutions Passed at a First Directors’ Meeting
- Your Guide to Resolutions to Appoint a Company Secretary
- Your Guide to Resolutions for Authority to Act on a Share Purchase and Subscription Agreement
- Your Guide to Shareholders’ Resolutions for Share Allotments
- Your Guide to Resolution for Authorisation of Investment in the Shares of Another Company
- Your Guide to Share Certificates in Singapore: Usage and How to Prepare
- Your Guide to Resolution for Transfer of Shares
- Your Guide to Resolution for Change of Registered Address
- Your Guide to Board Resolution for Approval/Allotment of Shares
- Your Guide to Resolutions to Increase a Company's Share Capital
- What is Withholding Tax and When to Pay It in Singapore
- Singapore Influencers: Here's How to Calculate Your Income Tax
- Corporate Tax in Singapore: How to Pay, Tax Rate, Exemptions
- When to Register for GST, How and Responsibilities after Registration
- Start-Up Tax Exemption Guide for New Singapore Companies
- Tax Investigation of Tax-Evading Business Owners in Singapore
- Small Business Accounting Services in Singapore
- Essential PDPA Compliance Guide for Singapore Businesses
- Cloud Storage of Personal Data: Your Business’ Data Protection Obligations
- How Can Companies Dispose of Documents Containing Personal Data?
- Here's a 7-Step Plan for Companies to Prevent Unauthorised Disclosure When Processing and Sending Personal Data
- Appointing a Data Protection Officer For Your Business: All You Need to Know
- Summary: Your Organisation's 9 Main PDPA Obligations
- Check the Do-Not-Call Registry Before Marketing to Singapore Phone Numbers
- GDPR Compliance in Singapore: Is it Required and How to Comply
- Is It Legal for Businesses to Ask for Your NRIC in Singapore?
- PDPA Consent Requirements: How Can Your Business Comply?
- Legal Options If Employees Breach Confidentiality in Singapore
- Insolvency: Claw-back of Assets from Unfair Preference and Undervalue Transactions
- Striking Off a Company
- What Should a Creditor Do When a Company Becomes Insolvent?
- Dissolution of partnerships in Singapore
- Validation of Payments Made by Companies Being Wound Up
- Can a Company that Struck Itself Off the Register Later Apply to Restore Itself?
- Closing Your Singapore Business: What You Need to Settle
- How to File a Proof of Debt against a Company in Liquidation
- Winding Up a Company