Company Law Reform Bill [HL]

House of Commons

Session 2005 - 06
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Other Bills before Parliament

Company Law Reform Bill [HL]

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 2 — Written resolutions
125

(b)
by the members of a private company (see sections 275 to 278).
(4)
References in enactments passed or made before this Chapter comes into force
to—
(a)
a resolution of a company in general meeting, or
(b)
a resolution of a meeting of a class of members of the company,
5

have effect as if they included references to a written resolution of the
members, or of a class of members, of a private company (as appropriate).
(5)
A written resolution of a private company has effect as if passed (as the case
may be)—
(a)
by the company in general meeting, or
10
(b)
by a meeting of a class of members of the company,

and references in enactments passed or made before this section comes into
force to a meeting at which a resolution is passed or to members voting in
favour of a resolution shall be construed accordingly.
272
Eligible members
15
(1)
In relation to a resolution proposed as a written resolution of a private
company, the eligible members are the members who would have been
entitled to vote on the resolution on the circulation date of the resolution (see
section 273).
(2)
If the persons entitled to vote on a written resolution change during the course
20
of the day that is the circulation date of the resolution, the eligible members are
the persons entitled to vote on the resolution at the time that the first copy of
the resolution is sent or submitted to a member for his agreement.
Circulation of written resolutions
273
Circulation date
25
References in this Part to the circulation date of a written resolution are to the
date on which copies of it are sent or submitted to members in accordance with
this Chapter (or if copies are sent or submitted to members on different days,
to the first of those days).
274
Circulation of written resolutions proposed by directors
30
(1)
This section applies to a resolution proposed as a written resolution by the
directors of the company.
(2)
The company must send or submit a copy of the resolution to every eligible
member.
(3)
The company must do so—
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(a)
by sending copies at the same time (so far as reasonably practicable) to
all eligible members in hard copy form, in electronic form or by means
of a website, or
(b)
if it is possible to do so without undue delay, by submitting the same
copy to each eligible member in turn (or different copies to each of a
40
number of eligible members in turn),

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 2 — Written resolutions
126


or by sending copies to some members in accordance with paragraph (a) and
submitting a copy or copies to other members in accordance with paragraph
(b).
(4)
The copy of the resolution must be accompanied by a statement informing the
member—
5
(a)
how to signify agreement to the resolution (see section 279), and
(b)
as to the date by which the resolution must be passed if it is not to lapse
(see section 280).
(5)
In the event of default in complying with this section, an offence is committed
by every officer of the company who is in default.
10
(6)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to a fine;
(b)
on summary conviction, to a fine not exceeding the statutory
maximum.
(7)
The validity of the resolution, if passed, is not affected by a failure to comply
15
with this section.
275
Members’ power to require circulation of written resolution
(1)
The members of a private company may require the company to circulate a
resolution that may properly be moved and is proposed to be moved as a
written resolution.
20
(2)
Any resolution may properly be moved as a written resolution unless—
(a)
it would, if passed, be ineffective (whether by reason of inconsistency
with any enactment or the company’s constitution or otherwise),
(b)
it is defamatory of any person, or
(c)
it is frivolous or vexatious.
25
(3)
Where the members require a company to circulate a resolution they may
require the company to circulate with it a statement of not more than 1,000
words on the subject matter of the resolution.
(4)
A company is required to circulate the resolution and any accompanying
statement once it has received requests that it do so from members
30
representing not less than the requisite percentage of the total voting rights of
all members entitled to vote on the resolution.
(5)
The “requisite percentage” is 5% or such lower percentage as is specified for
this purpose in the company’s articles.
(6)
A request—
35
(a)
may be in hard copy form or in electronic form,
(b)
must identify the resolution and any accompanying statement, and
(c)
must be authenticated by the person or persons making it.
276
Circulation of written resolution proposed by members
(1)
A company that is required under section 275 to circulate a resolution must
40
send or submit to every eligible member—
(a)
a copy of the resolution, and
(b)
a copy of any accompanying statement.

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 2 — Written resolutions
127


This is subject to section 277(2) (deposit or tender of sum in respect of expenses
of circulation) and section 278 (application not to circulate members’
statement).
(2)
The company must do so—
(a)
by sending copies at the same time (so far as reasonably practicable) to
5
all eligible members in hard copy form, in electronic form or by means
of a website, or
(b)
if it is possible to do so without undue delay, by submitting the same
copy to each eligible member in turn (or different copies to each of a
number of eligible members in turn),
10

or by sending copies to some members in accordance with paragraph (a) and
submitting a copy or copies to other members in accordance with paragraph
(b).
(3)
The company must send or submit the copies (or, if copies are sent or
submitted to members on different days, the first of those copies) not more
15
than 21 days after it becomes subject to the requirement under section 275 to
circulate the resolution.
(4)
The copy of the resolution must be accompanied by guidance as to—
(a)
how to signify agreement to the resolution (see section 279), and
(b)
the date by which the resolution must be passed if it is not to lapse (see
20
section 280).
(5)
In the event of default in complying with this section, an offence is committed
by every officer of the company who is in default.
(6)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to a fine;
25
(b)
on summary conviction, to a fine not exceeding the statutory
maximum.
(7)
The validity of the resolution, if passed, is not affected by a failure to comply
with this section.
277
Expenses of circulation
30
(1)
The expenses of the company in complying with section 276 must be paid by
the members who requested the circulation of the resolution unless the
company resolves otherwise.
(2)
Unless the company has previously so resolved, it is not bound to comply with
that section unless there is deposited with or tendered to it a sum reasonably
35
sufficient to meet its expenses in doing so.
278
Application not to circulate members’ statement
(1)
A company is not required to circulate a members’ statement under section 276
if, on an application by the company or another person who claims to be
aggrieved, the court is satisfied that the rights conferred by section 275 and that
40
section are being abused.
(2)
The court may order the members who requested the circulation of the
statement to pay the whole or part of the company’s costs (in Scotland,
expenses) on such an application, even if they are not parties to the application.

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 2 — Written resolutions
128

Agreeing to written resolutions
279
Procedure for signifying agreement to written resolution
(1)
A member signifies his agreement to a proposed written resolution when the
company receives from him (or from someone acting on his behalf) an
authenticated document—
5
(a)
identifying the resolution to which it relates, and
(b)
indicating his agreement to the resolution.
(2)
The document must be sent to the company in hard copy form or in electronic
form.
(3)
A member’s agreement to a written resolution, once signified, may not be
10
revoked.
(4)
A written resolution is passed when the required majority of eligible members
have signified their agreement to it.
280
Period for agreeing to written resolution
(1)
A proposed written resolution lapses if it is not passed before the end of—
15
(a)
the period specified for this purpose in the company’s articles, or
(b)
if none is specified, the period of 28 days beginning with the circulation
date.
(2)
The agreement of a member to a written resolution is ineffective if signified
after the expiry of that period.
20
Supplementary
281
Sending documents relating to written resolutions by electronic means
(1)
Where a company has given an electronic address in any document containing
or accompanying a proposed written resolution, it is deemed to have agreed
that any document or information relating to that resolution may be sent by
25
electronic means to that address (subject to any conditions or limitations
specified in the document).
(2)
In this section “electronic address” means any address or number used for the
purposes of sending or receiving documents or information by electronic
means.
30
282
Publication of written resolution on website
(1)
This section applies where a company sends—
(a)
a written resolution, or
(b)
a statement relating to a written resolution,

to a person by means of a website.
35
(2)
The resolution or statement is not validly sent for the purposes of this Chapter
unless the resolution is available on the website throughout the period
beginning with the circulation date and ending on the date on which the
resolution lapses under section 280.