Skip to content

ACCA Applied Skills · Corporate and Business Law (Global) · Company meetings and resolutions

Orchid Co's members unanimously and informally agree to approve a matter that the law says requires a special resolution, but they never hold a meeting or sign a written resolution. Under the general rule, what is the position?

Informal agreement does not automatically amount to a valid special resolution. Resolutions are normally passed at a properly convened meeting or by a written procedure. Unanimous informal assent is only a limited exception, and directors cannot substitute their own approval for members' approval.

  1. AThe matter is validly approved, because every member agreed
  2. BThe matter is not validly approved unless the company follows a recognised procedure, although the unanimous assent principle may apply in limited casesCorrect
  3. CThe matter is valid only if the directors later ratify the members' agreement by a board resolution

Explanation

Resolutions must generally be passed through a meeting or written procedure. The Duomatic-style unanimous assent principle is a narrow exception, so informal agreement is not automatically a valid special resolution. Director ratification cannot replace member approval.

Did you get it right without looking?

One question tells you little. A timed set on Company meetings and resolutions shows your real accuracy, how long you take and where you lose marks.

Practise Company meetings and resolutionsFree diagnostic mock

More Company meetings and resolutions questions