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

Quill Co, a private company, has three shareholders who each hold one third of the voting shares. Wishing to avoid a formal meeting, they propose to pass an ordinary resolution to appoint a new director by written resolution circulated to all members. Which statement is most accurate?

A private company can pass an ordinary resolution by written resolution without a meeting, as long as the required majority of eligible members signify their agreement. A physical meeting is not always required, and the members do not have to be directors.

  1. AA written resolution is invalid because every resolution of a company must be passed at a physical meeting
  2. BA written resolution can be used by a private company to pass an ordinary resolution, provided the required majority of eligible members signify agreement, without holding a meetingCorrect
  3. CA written resolution can only be used if all three shareholders are also directors of the company

Explanation

Private companies can generally pass ordinary or special resolutions by written resolution, without a meeting, once the required majority of eligible members agree. The shareholders need not be directors. The assertion that all resolutions require a meeting is wrong for private companies, though some matters, such as removing an auditor in certain systems, may be restricted.

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