A shareholder resolution is a non-binding recommendation to the board of directors of a public corporation regulated by the U.S. Securities and Exchange Commission. Proposed by shareholders, resolutions are presented and voted upon at the corporation’s annual meeting and through the annual proxy vote.
To pass company resolutions, which may be ‘ordinary’ or ‘special’, shareholders must cast their votes for or against a proposed course of action. This can be done at a general meeting or by written resolution. Ordinary resolutions require a simple majority vote (above 50%) to be passed.
If the written resolution put to the shareholders is an ordinary resolution (see 8), the percentage vote required is a simple majority of the total voting rights of the shareholders. For a special resolution it is not less than 75% of the total voting rights of the shareholders.
Shareholders cast votes at a company’s annual meeting. If they cannot attend, they may utilize a proxy vote to convey their wishes. Typically common shares carry one vote per share, while preferred shares have no voting rights.
However, the courts define a shareholder resolution as a ‘decision’ of the company. Therefore, such resolutions are considered to be a binding decision of the company.
163 (2) A resolution under subsection (1) is valid only until the next succeeding annual meeting of shareholders. (3) A resolution under subsection (1) is not valid unless it is consented to by all the shareholders, including shareholders not otherwise entitled to vote.
How long is a company resolution valid for?
Every company must maintain the minutes of all meetings and resolutions of directors for a period of 7 years after the date of each meeting or the date on which the resolution was adopted.
Shareholders can make decisions about the company by passing a resolution, usually at a meeting. A “special resolution” usually involves more important questions affecting the company as a whole or the rights of some or all of its shareholders. by having all of the shareholders record and sign their decision.
Some decisions which require ordinary resolutions are:
- appointment or removal of company directors and secretaries.
- authorising director’s loans.
- amending the powers of directors of changing their employment contracts.
What are the three types of resolutions?
The three types of resolutions are joint resolutions, simple resolutions and concurrent resolutions.
A shareholder proposal is your recommendation or requirement that the company and/or its board of directors take action, which you intend to present at a meeting of the company’s shareholders. Your proposal should state as clearly as possible the course of action that you believe the company should follow.
What is SEC Rule 14a 8?
Rule 14a-8 requires companies that are subject to the federal proxy rules to include shareholder proposals in their proxy statements, subject to certain procedural and substantive requirements.
as may be stated in the articles of incorporation: Provided, That no share may be deprived of voting rights except those classified and issued as “preferred” or “redeemable” shares, unless otherwise provided in this Code: Provided, further, That there shall always be a class or series of shares which have complete …
Can a single director pass a resolution?
Yes, it is possible after following the provisions of Section 162 of Companies Act, 2013. … Section 162 of Companies Act, 2013 states about provisions relating to appointment of more than one director through single resolution. We will discuss it in detail.
Passing member resolutions
The members of a private limited company may pass a resolution as a written resolution (unless it is an ordinary resolution requiring special notice) or at a general meeting (including an AGM) of the members of the company.
Can a resolution be amended?
Even with the best of planning, resolutions presented at general meetings can sometimes require amendments to be made to them; either due to an error, oversight or the wishes of those present at the meeting.