resolution to approve agreement

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Unless the transaction is a major transaction under the Companies Act 1993 or there are restrictions relating to the approval of contracts in the company’s shareholders’ agreement (if any), directors can approve the company entering into contracts without the need for shareholder approval.

If the transaction qualifies as a major transaction, the shareholders will need to approve by special resolution the entry into the Agreement before the Company signs the Agreement. In general terms, major transactions involve assets or obligations which are greater in value than half of the Company’s existing assets. See the Simmonds Stewart template resolutions to approve a major transaction for the relevant resolutions if necessary.

This directors’ resolution assumes that the directors will sign a written resolution, rather than approve the agreement during a meeting. A written resolution must be signed by all directors of the company.

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