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Use this resolution if the transaction the company wishes to enter into is a major transaction for the purposes of section 129 of the Companies Act 1993. In general terms, major transactions involve assets or obligations which are greater in value than half of the Company’s existing assets. If you are not sure if a transaction constitutes a major transaction, please talk to your lawyer or accountant.
This resolution assumes that shareholders will sign a written resolution, rather than approve the transaction at a shareholders’ meeting. It assumes all shareholders will sign the resolution. A company may approve a major transaction by special resolution of shareholders (i.e. a 75% majority) but that can raise shareholder minority protection issues, including minority buy-out rights. If 100% shareholder approval cannot be achieved, the written resolution must be signed by at least 75% of the shareholders who together hold not less than 75% of the voting rights and every shareholder not signing the written resolution must be sent a copy of the resolution and a statement setting out any minority buy-out rights within 5 business days of the resolution being passed.
As a matter of good practice, the directors should also approve the execution of any agreements relating to a major transaction. Please see the Simmonds Stewart directors’ resolution to approve agreement template.