The preamble to the resolution typically sets out the details of the proposed investment, including the:
- Documents that would be entered into (e.g. a Share Subscription Agreement if subscribing for shares issued by the company, or a Share Purchase Agreement if buying shares from another party)
- Value of the proposed investment
- Type and number of shares to be acquired
Resolution to Authorise Investment
This resolution grants the company authority to make the investment. It would also typically authorise a director or a senior employee to do all acts necessary to give effect to the investment, such as signing a Share Purchase Agreement.
This resolution would also grant the authority to affix the company’s common seal on any documents that would have to be in writing under seal, such as deeds. That said, with effect from 31 March 2017, there is no longer a need to use the company seal to execute such documents if the procedure in section 41B of the CA is followed.
Under section 41B, a company may execute a deed without a common seal by signature:
- On behalf of the company by a director of the company and a company secretary;
- On behalf of the company by at least 2 directors of the company; or
- On behalf of the company by a director of the company in the presence of a witness who attests the signature.
The resolution should provide for execution of documents using the methods in section 41B as well.
Template for Resolution to Authorise Investment
Need a template for resolutions to authorise investment in the shares of another company? You can get one here.