This article contains a worked example of a set of shareholders’ resolutions approving the allotment of new shares by a generic company; neither the template resolutions nor the accompanying guidance should be considered a complete or definitive statement of the law, nor legal, tax or financial advice. You should make your own judgement on the suitability of these templates and guidance to your circumstances, and obtain your own qualified legal advice as you see fit.
In nearly all cases, SeedLegals will provide you with the appropriate Written Resolutions (also referred to as Shareholders’ Resolutions) when using our products.
However, there can be certain circumstances, for example where you make contractual promises of company shares to employees, advisors or consultants (e.g. in employment contracts, consultancy or advisor agreements), where you may need to create your own Shareholders’ Resolutions to make sure that your company has its shareholders’ permission to issue the shares required to satisfy these promises.
In such cases you may wish to use the following example, which is a set of shareholders’ resolutions approving the issue of new shares by a generic company (aka ‘TestCo Limited’ or the ‘Company’), as a guide.
Note: In the example, TestCo Limited’s shareholders are asked to give the Company permission to allot new shares up to a particular maximum nominal amount. We arrive at this maximum nominal amount figure by multiplying (i) the number of shares the Company would need to issue to satisfy the entirety of the equity promise it has made via contracts with the team member; and (ii) the nominal value of the share of the class that has been promised.
Please note that this example assumes the Company has only one share class - i.e. ordinary shares, and is based on the following set of facts:
- Shareholders before the new shares are allotted - John Smith, Jane Smith and Bob Smith
- Total number of new shares to be allocated to co-founders = 666
- Total number of shares in the Company before allocation = 1,000
- Total number of shares in the Company after the allocation to the co-founders = 1,666
- Nominal value of the Company’s ordinary shares = £0.001 per share
- Additional maximum nominal amount = £0.666 (i.e. 666 new shares x £0.001 nominal value per share)
- The allotment authority granted is in addition to any outstanding allotment permissions the Company’s shareholders have authorised in the past.
We have used the above information to populate the below set of draft written resolutions. If you decide to use this example as a guide, please be aware that the areas underlined and in bold should be amended to reflect your Company’s share capital information and the equity promises it is seeking allotment permission for.
----------------------------------------------------------------------------------------------------------------
Written Resolutions
of
TestCo Limited
Company Number 00000000
(the “Company”)
Pursuant to Part 13, Chapter 2 of the Companies Act 2006, the undersigned being the eligible members (as defined in section 289 of the Companies Act 2006) hereby approve the following written resolutions as Ordinary and Special Resolutions of the Company and agree that these resolutions will for all purposes be valid and effective as if they had been passed at a general meeting of the Company duly convened and held.
ORDINARY RESOLUTION
Authority to Allot
THAT in accordance with section 551 of the Companies Act 2006, the directors of the Company be generally and unconditionally authorised to allot new shares up to the maximum nominal amount of £0.666.
This authority will, unless renewed, varied or revoked by the Company, expire five years from the passing of this resolution, save that the Company may, before such expiry, make an offer or agreement which would or might require shares to be allotted and the Directors may allot shares in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired.
For the avoidance of doubt, this authority is supplemental to any subsisting section 551 authority.
SPECIAL RESOLUTION
Dis-application of Preemption Rights
THAT, subject to the passing of the Authority to Allot resolution above, and in accordance with section 570 of the Companies Act 2006, the directors of the Company be generally empowered to allot equity securities (as defined in section 560 of the Companies Act 2006) pursuant to the authority conferred by the Authority to Allot above and as if the preemption rights in the Company's articles of association or, if applicable, section 561(1) of the Companies Act 2006 did not apply to any such allotment.
AGREEMENT
Please read the notes at the end of this document before signifying your agreement to the resolutions.
The undersigned, a person entitled to vote on the above resolutions, hereby irrevocably agrees to the above resolutions.
The circulation date of these resolutions is 16 September 2023.
[signature] [signature] [signature]
—————————— ———————————— ————————————
John Smith Jane Smith Bob Smith
16 Sept 2023 16 Sept 2023 17 Sept 2023
NOTES
- You can choose to agree to all of the resolutions or none of them but you cannot agree to only some of the resolutions.
- If you agree to all of the resolutions, please indicate your agreement by signing and dating this document where indicated above and returning it to the Company using one of the following delivery methods:
- Email: by attaching a scanned copy of the signed document to an email and sending it to the CEO at ceo@testco.co.uk. Please write "Signed written resolutions" as the email subject.
- Post or by hand: returning the signed copy to CEO, TestCo Limited, 1 Main Street, London, United Kingdom, A1 123.
- If you do not agree to all of the resolutions, you do not need to do anything. You will not be deemed to agree if you fail to reply.
- Once you have indicated your agreement to the resolutions, you may not revoke your agreement.
- These resolutions will lapse unless sufficient agreement is received for them to pass within 28 days beginning with the circulation date above. If you agree to the resolutions, please ensure that your agreement reaches us before the expiry of this period.
- In the case of joint holders of shares, only the vote of the senior holder who votes will be counted by the Company. Seniority is determined by the order in which the names of the joint holders appear in the register of members.
- If you are signing this document on behalf of a person under a power of attorney or other authority please send a copy of the relevant power of attorney or authority when returning this document.