Avoid These Common Mistakes in Written Resolutions

When company directors or shareholders need to make a quick decision, a written resolution often seems like the easiest route. It’s faster than calling a meeting and can be done with a few signatures or clicks. Yet, the simplicity of the process can mask its legal complexity. A single missed step, such as failing to circulate the resolution correctly or meeting the required voting threshold, can render a decision invalid. In both the UK and Jersey jurisdictions, written resolutions remain one of the most efficient tools for company governance, but only when every procedural box is ticked.

Used correctly, written resolutions save time, streamline communication, and keep corporate records clear and compliant. Used carelessly, they can create governance gaps or even legal disputes. The key lies in understanding the exact legal process: what must happen, who must be involved, and how approval is formally achieved.

This guide explains what written resolutions are, outlines the key requirements under company law, and highlights the most common mistakes companies make, along with practical steps to avoid them.

What Is a Written Resolution

A written resolution is a legally recognised method of making decisions by directors or shareholders without holding a physical or virtual meeting. Under UK company law, most private limited companies can pass either a board resolution or a shareholder resolution in writing, provided the procedure meets the legal and internal governance requirements.

Written resolutions are commonly used for decisions such as approving accounts, appointing auditors, changing directors, or authorising share allotments. They form part of the broader landscape of corporate governance resolutions, helping organisations operate efficiently while maintaining a clear audit trail.

For public companies, however, written resolutions are generally not permitted, reflecting the stricter transparency requirements for listed entities.

Under UK law, written resolutions are governed by the Companies Act 2006, Part 13, Chapter 2 (sections 288–300). These provisions establish that private companies may pass resolutions without convening a general meeting. Such resolutions can be proposed by either directors or members, and they carry the same legal effect as those passed at meetings. Ordinary resolutions require a simple majority of voting rights, while special resolutions demand at least 75% approval. Some decisions, such as the removal of a director or auditor, cannot be made by written resolution. The law also requires simultaneous circulation to all eligible members, clear authentication of votes (which may be electronic), and ensures once agreement is given, it cannot be revoked. This framework gives private companies flexibility while maintaining proper oversight and accountability.

Jersey company law, governed by the Companies (Jersey) Law 1991, mirrors many of these principles but is adapted to local governance practices. It allows written resolutions to be made outside of meetings provided they comply with the company’s articles and statutory requirements. Recent updates have clarified director and shareholder powers, modernised administrative procedures (including electronic approvals), and reinforced standards for recording decisions on matters like share capital and governance. These changes align Jersey with the UK framework while maintaining jurisdictional flexibility.

Key Requirements of Written Resolutions

To ensure validity, companies must comply with several procedural rules governing the requirements of a written resolution:

• The resolution must be circulated to all eligible shareholders or directors.

• The wording should be clear, specific, and unambiguous.

• Each resolution must identify whether it is ordinary or special, as the approval threshold for resolutions differs.

• The voting process must be recorded accurately, reflecting who approved or rejected the proposal.

• Once passed, the signed document should be retained as part of the company’s official records for inspection and compliance purposes.

Failure to follow these requirements can result in invalid written resolutions, which may expose the company to legal or governance risks.

Directors in both the UK and Jersey are expected to uphold strong governance standards. They must act in the best interests of the company and follow due process when passing resolutions. The law provides flexibility for resolving administrative matters, such as share transfers and register corrections, without court intervention when all affected parties agree, promoting efficiency while maintaining compliance.

When Written Resolutions Cannot Be Used

Not every decision can be passed in writing. Certain resolutions, such as those to remove a director or auditor, must be passed at a general meeting to ensure fairness and transparency.

Other limitations arise from a company’s internal articles of association. These may contain clauses that restrict or modify the written resolution procedure, requiring that specific actions take place only at properly convened meetings.

In Jersey, while written resolutions are widely accepted, they must be passed unanimously in the case of private companies, unless the articles specify otherwise. The jurisdiction also follows the same governance principles as the UK, where director duties and shareholder rights are balanced to ensure accountability.

Common Pitfalls in Written Resolutions

Common pitfalls in written resolutions include lack of specificity, missing signatures or documentation, failure to achieve the required quorum and voting thresholds, and inadequate record-keeping. To avoid these errors, ensure resolutions are clear and precise, confirm all necessary parties have signed and documented their votes, understand and adhere to voting majorities for ordinary and special resolutions, and maintain secure, long-term storage for resolutions and supporting documents.

Beyond these general issues, several specific problems can easily invalidate resolutions or delay their effect:

1. Non-response counting as a vote “against”

Many assume silence equates to consent. Under company law written resolutions, a shareholder or director who does not respond is treated as having not voted, not as having voted “against.” This distinction is crucial for calculating the correct approval majority.

Practical tip: Always communicate clearly that non-response does not count as consent, and track responses until the necessary voting threshold is reached.

2. Incomplete circulation of written resolutions

Failing to ensure proper circulation of written resolutions to all eligible voters is a common cause of invalidity. This includes omitting shareholders who hold minority interests or failing to update the register of members before circulation.

Practical tip: Keep a verified contact list and confirm distribution to all eligible participants before the voting period begins.

3. Missing explanatory statements or deadlines

Shareholders must be provided with sufficient context to make an informed decision. Without an explanatory statement outlining the purpose and effect of the resolution, it may be open to challenge.

Practical tip: Attach a concise explanatory note and clearly state the closing date for voting to comply with resolution compliance requirements.

4. Conflicts within the articles of association

Even well-drafted resolutions can be undermined by contradictions in the company’s internal governance documents. If a clause in the articles of association conflicts with statutory procedure, confusion and delay can follow.

Practical tip: Review the articles before drafting shareholder resolutions to ensure alignment with company law written resolutions and corporate governance resolutions best practices.

5. Poor record-keeping and documentation

Failing to maintain accurate and long-term storage of resolutions is a frequent oversight. Missing documentation can create compliance risks during audits or due diligence reviews.

Practical tip: Use a secure digital system such as Expero Virtual Data Room or another compliant platform for filing, tracking, and retrieving resolutions easily.

How to Avoid Resolution Mistakes

Effective governance depends on clarity, accuracy, and communication. To avoid common mistakes in written resolutions, companies should:

• Use verified resolution templates for companies that meet statutory standards.

• Check that all shareholders or directors are eligible and informed before circulation.

• Specify whether the resolution is ordinary or special, with clear written resolution voting requirements.

• Record the shareholder approval process transparently, capturing all votes received.

• Validate that the approval threshold for resolutions has been properly met before execution.

• Keep signed copies as part of the company’s permanent governance file.

These measures form part of company secretarial best practice, ensuring written resolutions stand up to legal and regulatory scrutiny.

How to Write an Effective Resolution

A well-crafted resolution balances legal precision with practical clarity. Here are key tips for drafting shareholder resolutions and board resolutions that meet both compliance and operational needs:

• Begin with a clear title identifying the decision being made.

• Reference the relevant section of the Companies Act 2006 or Companies (Jersey) Law 1991, depending on jurisdiction.

• Include background information to explain the rationale behind the decision.

• Use consistent formatting to make approvals easy to identify.

• Clearly specify the date the resolution takes effect and any follow-up actions required.

Companies may also benefit from adopting a corporate decision-making best practice checklist or internal approval tracker to streamline the process.

Final Thoughts

Getting written resolutions right goes beyond process to protect the integrity of your company’s decision-making. When handled with care, they demonstrate good governance and strengthen the relationship between directors and shareholders. As Jerri-Lea Brown, Founder of Sage Governance, puts it: “Strong governance is built on clarity and accountability. A well-drafted resolution doesn’t just record a decision, it reflects the trust and transparency that underpin a responsible board.”

For organisations operating across the UK and Jersey, understanding both jurisdictions’ requirements ensures that every approval stands up to scrutiny. Whether you’re drafting your first resolution or refining your company’s procedures, Sage Governance can help you navigate the nuances of compliance with confidence and precision.

FAQs

Can written resolutions replace general meetings entirely?

Not always. While written resolutions offer flexibility for most private companies, certain decisions, such as removing directors or auditors, must be decided at a general meeting.

What happens if a written resolution misses the approval deadline?

It becomes invalid. Companies must specify and adhere to clear time limits when circulating written resolutions, ensuring votes are received before expiry.

What makes a written resolution legally binding?

A resolution becomes binding once the required majority has been reached and all procedural steps have been met, including circulation to eligible shareholders and proper documentation.