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company resolution for a loanCompany Resolution for a Loan

resolution is a formal way in which a company can note decisions that are made at a meeting of company members. There are two types of resolutions: ordinary and special. Under the Corporations Act 2001, most of the decisions that affect a company need to be made by a resolution.

 

Company Resolution for a loan when a Company accepts loan agreement.

 

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Resolution for a Loan

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Passing a company resolution

A resolution is a formal way in which a company can note decisions that are made at a meeting of company members. There are two types of resolutions: ordinary and special.

Under the Corporations Act 2001, most of the decisions that affect a company need to be made by a resolution. Additionally, a company’s constitution may have its own rules about what decisions need to be made by resolution.

How to pass a resolution

For a resolution to pass, it must meet the following criteria:

  • the resolution is passed at a meeting which is properly convened and satisfied any quorum (minimum number of members are present) requirements
  • the resolution is put into the company’s records within one month of the meeting being held, and
  • the minutes of the meeting where the resolution was passed must be signed by the chair of the meeting, or the chair of the following meeting.

If these criteria aren’t met, the resolution could be considered as invalid. You also need to determine if you are required to pass an ordinary resolution or a special resolution.

If you are passing a special resolution, there may be other requirements you need to fulfil. See ‘Special resolutions’ below for more information.

Voting on resolutions

Where a company has share capital, a member has one vote for each share they hold. These votes are subject to any rights or restrictions attached to their specific class of shares.

If the company doesn’t have share capital, each member is entitled to one vote. The chair has a casting vote. If the chair is also a member, they have a member’s vote as well.

Notice of a meeting of members for a company or scheme

Before a meeting of members takes place, the company must give its members at least 21 days notice. A listed company must give at least 28 days notice.

Shorter notice can be given if the members that hold at least 95% of the company’s votes agree. This does not apply for a resolution to appoint/remove a director or remove an auditor.

Registered schemes must give at least 21 days notice. This cannot be shortened.

The notice must include:

  • the date and time of the meeting
  • the location
  • an electronic address (i.e. email)
  • planned business for the meeting
  • information about any proposed special resolutions, and
  • information about proxy votes.

Once a special resolution has been passed, what forms need to be lodged?

Below is a list of some scenarios where you may need to pass a special resolution and any documents you may need to lodge with us.

The forms you need to lodge will depend on what the special resolution relates to. For example, to change a company name, you need to pass a special resolution and lodge a Form 205 Notification of resolution.

You may also need to include a copy of the special resolution that was passed and any supporting documentation (e.g. minutes of the meeting where the resolution was passed)

Changing the company’s name

Lodge a Form 205 Notification of resolution online

Changes to the company’s constitution or removing the company’s constitution

Lodge a Form 205 (public companies only)

Please visit ASIC.GOV for more information

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