There are two ways companies can use a Directors’ Resolution: to record a decision made at a directors meeting or pass a resolution without a meeting. Let’s break it down.
1. During a physical or remote meeting
Typically, a company’s board of directors holds meetings to govern the company. Any regulations around directors’ meetings will usually be outlined in the company’s Articles of Association.
If your board is holding a physical meeting, LawDepot’s template allows you to enter all relevant meeting details, including where and when the meeting will be held, who will run it (i.e., the chairperson of the board), and who will serve as the meeting’s secretary.
Once the meeting has been completed and all necessary decisions have been approved, the resolution will be signed by the company’s directors, chairperson, or secretary, which makes the decisions official.
Alternatively, during meetings, directors can record decisions (i.e., resolutions) directly in the Meeting Minutes. In this case, a director puts forward a “motion” that is put to a vote. If a sufficient number of directors vote in favour of the motion, then it passes as a resolution and is recorded in the minutes rather than a separate Directors’ Resolution document.
2. In lieu of a meeting
Sometimes, holding meetings can be difficult, especially if several directors live in different cities or have busy schedules.
According to the Companies Act 2006, you can use a written Directors’ Resolution to document decisions in lieu of a physical meeting. Simply generate the resolution using our template and send it to each of the company’s directors. Once the document has been signed by all parties, the decision is officially made.
Using a Director’s Resolution can also be beneficial for smaller companies with only one director. A singular director doesn’t hold meetings by themselves to pass resolutions. However, they still need to record their decisions to practice good corporate governance. Therefore, a Directors’ Resolution can be helpful.
