Creating Shareholder Resolutions

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

Shareholder resolutions are an essential part of corporate governance - a way for investors to influence decision-making and ensure their rights are taken into consideration. As many companies strive to make sure their business practices meet shareholders’ expectations, it has become increasingly common in recent years for companies to welcome resolutions from investors.

At Genie AI, we believe that shareholder resolutions play an important role in the corporate decision-making process. These resolutions provide a platform for investors to express their concerns and interests and help ensure management remains accountable by allowing them to call on the company to take certain steps or make changes they feel are necessary. This could include changing corporate governance policies, introducing more rigorous environmental standards, or even replacing the CEO if they feel he or she is not acting responsibly.

In addition, shareholder resolutions help promote transparency and accountability by providing shareholders with a voice in upcoming decisions that could affect them directly. Investors also gain protection of their rights as it allows them have a say in any future developments that may impact their investments negatively. Furthermore, as these shareholder actions can lead companies towards compliance with regulatory laws and ethical standards, everyone involved can be confident that the firm is operating responsibly.

Overall, shareholder resolutions offer an invaluable forum for investors to bring about positive change within companies while protecting themselves against potential conflicts of interest or other unethical practices within the organization. Much like voting at the ballot box secures our democracy – investor-led initiatives give shareholders more power when it comes down understanding how decisions get made at their company of choice. To support these efforts further, Genie AI provides access to millions of data points across legal documents through its open source template library – allowing anyone to customize high quality legal documents without paying a lawyer’s fee today! Read on below for our step-by-step guidance and information about how you can access our template library this very moment!

Definitions (feel free to skip)

Legal Framework: The set of laws and regulations that govern a specific action or situation.
Rationale: The reasons or logic behind why a particular decision is made.
Applicable: Relevant or having an effect on a particular situation.
Implications: Potential outcomes or consequences of a particular decision.
Ongoing: Continuing or progressing over time.
Absentee voting: Allowing people to cast a vote without being physically present.

Contents

• Overview of shareholder resolutions
• What they are and why they are important
• Understanding the legal framework
• What laws support and govern shareholder resolutions
• Research applicable laws and regulations
• Note any special considerations for different countries
• Drafting a resolution
• The best practices for creating a resolution that is clear and concise
• Gather all relevant information and documents
• Draft the resolution in a formal legal document
• Double-check that all facts and figures are correct
• Submitting a resolution
• The process for submitting a resolution to the company
• Notify the company of the resolution
• Have the resolution reviewed by a legal representative
• Submit the resolution to the company
• Voting on a resolution
• How shareholders can influence the outcome of the vote
• Notify shareholders of the resolution
• Explain the implications of the resolution
• Allow for absentee voting
• After the vote
• What happens once a resolution passes or fails
• Follow up with shareholders to ensure the resolution is followed through
• Take any necessary steps to implement the resolution
• Conclusion
• A summary of the points to remember when creating and submitting a resolution
• Understand the legal framework
• Draft a clear and concise resolution
• Follow through with the voting process
• Take appropriate action after the vote
• Prepare for potential challenges
• Identify potential issues that might arise
• Monitor progress
• Review the resolution and its implementation regularly
• Share results
• Communicate the resolution and its outcomes to shareholders

Get started

Overview of shareholder resolutions

• Understand the purpose of shareholder resolutions
• Learn what shareholder resolutions are and when they should be used
• Research the different types of shareholder resolutions
• Get familiar with the rules and regulations surrounding shareholder resolutions
• When you have a thorough understanding of shareholder resolutions, you can move on to the next step.

What they are and why they are important

• Understand what a shareholder resolution is and why it is important
• Review the types of shareholder resolutions and the reasons for each
• Analyze the different types of shareholders and how they impact the decision-making process
• Consider any potential implications of the resolution
• Determine if the resolution is feasible and appropriate
• You can check this off your list when you have a clear understanding of the purpose of shareholder resolutions, the types of resolutions, and their implications.

Understanding the legal framework

• Familiarize yourself with the laws governing shareholder resolutions in your jurisdiction
• Read over the relevant statutes and regulations to understand the legal framework
• Consult with a lawyer or legal advisor to ensure you are up-to-date on the latest developments in shareholder resolutions
• Once you have a thorough understanding of the legal framework, you can move on to the next step.

What laws support and govern shareholder resolutions

• Research the applicable state laws
• Check the SEC’s website for additional regulations
• Read up on the state’s corporate law
• Read any relevant court decisions
• Read any other applicable regulations
• Familiarize yourself with the applicable laws

You can check this step off your list when you have a good understanding of the applicable laws and regulations.

Research applicable laws and regulations

• Read up on the relevant laws and regulations set by the Securities and Exchange Commission (SEC)
• Consult with a legal expert, such as a corporate lawyer, to understand the laws more thoroughly, if needed
• Make a list of laws and regulations that apply to the shareholder resolution you’re creating
• Understand any additional state, local, or international laws that may apply
• Keep track of changes and updates to the laws and regulations that may affect the resolution

Once you have a comprehensive understanding of all applicable laws and regulations, you can check this step off your list and move on to the next step.

Note any special considerations for different countries

• Check the laws and regulations of the country where the shareholders are located
• Make sure the resolution complies with local laws and regulations
• Look for any specific regulations related to the resolution and its purpose
• Be sure to include any applicable regulations in the resolution
• When you are satisfied that the resolution is compliant with all applicable laws and regulations, you can move on to drafting the resolution.

Drafting a resolution

• Determine the purpose of the resolution and the desired outcome
• List the actions or objectives that need to be taken
• Outline the specific details of the resolution
• Describe the timeline for implementation
• Include any relevant legal or compliance considerations
• Check the resolution for any errors or inconsistencies
• Ensure the resolution is clear and meets all applicable regulations

Once the resolution is drafted, you can move on to the next step of the guide.

The best practices for creating a resolution that is clear and concise

• Use simple, clear language
• Avoid legal jargon
• Define any terms that may be unfamiliar
• Include all the necessary details
• Be as specific as possible
• Keep the resolution brief and to the point
• Make the resolution easy to understand
• Check for any typos or grammatical errors
• When you are satisfied with the resolution, check it off your list and move on to the next step.

Gather all relevant information and documents

• Determine the specific action your resolution is asking the shareholders to vote on
• Collect any relevant legislation, regulations, or court decisions that may be applicable
• Gather any supporting documents that may help illustrate the purpose of the resolution
• Research any similar resolutions that have been passed by other companies
• When you have collected all the necessary information, documents and research, you are ready to move on to the next step: Draft the resolution in a formal legal document.

Draft the resolution in a formal legal document

• Gather all the information you need to include in the resolution and organize into a clear structure
• Draft the resolution using formal legal language, including the date, type of resolution, and all relevant information
• Add formatting to make the document visually appealing and easy to read
• Double-check the document for accuracy and completeness
• When you are satisfied with the resolution, you can check it off your list and move on to the next step.

Double-check that all facts and figures are correct

• Carefully review the resolution document to ensure all facts and figures are accurate and up to date.
• Check the resolution against the current corporate records to ensure all information is up-to-date and accurate.
• Ask a lawyer to review the resolution and point out any potential legal issues that may arise.
• When all facts and figures have been double-checked and verified, you can move onto the next step of submitting the resolution.

Submitting a resolution

• Contact the company to find out the process and timeline for submitting a resolution
• Make sure the resolution follows the company’s guidelines and regulations
• Follow the instructions the company has given for submitting the resolution
• Submit the resolution to the company
• Get confirmation from the company that the resolution has been received
• Once you’ve received confirmation of receipt, you can move on to the next step.

The process for submitting a resolution to the company

• Contact the company’s Corporate Secretary or Board of Directors to obtain the required forms for submitting a resolution
• Complete the forms with the resolution information, including the wording of the resolution, the number of shares represented by the resolution, and the name of the shareholder submitting the resolution
• Submit the forms to the company’s Corporate Secretary or Board of Directors for consideration
• Receive confirmation from the company that the resolution has been received
• Monitor the company’s response to the resolution, which may include a vote or discussion among the shareholders and board members

Notify the company of the resolution

• Prepare a written notification to the company of the resolution and submit it to the corporate secretary or other authorized individual
• Include a copy of the resolution and a short explanation of the purpose behind it
• Notify the company at least 90 days before the shareholders’ meeting in which the resolution will be voted on
• Wait for a response from the company regarding their acceptance or rejection of the resolution
• You will know when you can check this off your list when you receive a response from the company regarding their acceptance or rejection of the resolution.

Have the resolution reviewed by a legal representative

• Contact a legal representative and provide them with a copy of the resolution.
• Ask the legal representative to review the resolution and advise on any changes that need to be made.
• Incorporate the changes to the resolution as suggested by the legal representative.
• When you have finalized the resolution and the legal representative has provided their approval, you can check this step off your list and move on to submitting the resolution to the company.

Submit the resolution to the company

• Prepare a final version of the resolution with any necessary changes recommended by the legal representative.
• Obtain the signatures of all shareholders supporting the resolution, as required by company regulations.
• Submit the resolution to the company by delivering it to the company’s registered office or by mailing it to the company’s registered agent.
• Contact the company to verify that the resolution has been received.
• You will know when you have submitted the resolution to the company when you have received confirmation from the company that the resolution has been received.

Voting on a resolution

• Contact the company to determine the voting process and the deadline for votes to be received
• Determine the minimum percentage of votes required for the resolution to pass
• Ensure the resolution has been correctly drafted and that all information is accurate
• Contact shareholders to inform them of the resolution and encourage them to vote in favor of it
• Monitor and track the progress of the voting
• Count the votes after the deadline to determine whether the resolution has passed or failed
• When the votes have all been counted and the resolution has either passed or failed, the shareholder resolution has been completed and you can move on to the next step.

How shareholders can influence the outcome of the vote

• Reach out to other shareholders and explain why you are in favor of your resolution.
• Offer evidence of why the resolution is beneficial, and explain the potential consequences of not approving it.
• Try to build a coalition of shareholders who will also vote in favor of your resolution.
• Publish commentary and opinion pieces in newspapers and other outlets to sway public opinion.
• When you feel you have reached a good number of shareholders who will support your resolution, you can move on to the next step.

Notify shareholders of the resolution

• Prepare and distribute a notification to all shareholders that outlines the resolution being proposed and the implications.
• Make sure to include a deadline by which shareholders must respond with their vote.
• Ensure that shareholders are given a clear explanation of how they can vote and what their vote will mean.
• When all shareholders have been notified of the resolution and have had the opportunity to submit their vote, you can check this off your list and move on to the next step.

Explain the implications of the resolution

• Prepare a written explanation of the resolution, including its implications for the shareholders.
• Make sure that the explanation is easy to understand and clear.
• Distribute the explanation to all shareholders in the form of a letter, email or other document.
• Once the explanation has been distributed, you can check off this step and move on to the next step.

Allow for absentee voting

1. Create an absentee ballot form that includes the resolution being voted on.
2. Make sure the form includes instructions for submitting the ballot.
3. Make sure absentee ballots are accepted up to a certain date prior to the vote.
4. Ensure enough time is given for the absentee ballots to be returned.

Once you have created an absentee ballot form, have it approved by the shareholders, and have set a date for absentee ballots to be accepted and returned, you can check this off your list and move on to the next step.

After the vote

• Count the votes, both present and absentee, to determine if the resolution has passed or failed.
• For any abstentions, tally those as a part of the total number of votes.
• Calculate the percentage of votes in favor of the resolution.
• If the resolution passes, inform shareholders of the results.
• If the resolution fails, inform shareholders of the results and provide an explanation of why it failed.
• After all of these steps are completed, you can move on to the next step of the guide.

What happens once a resolution passes or fails

• If the resolution passes, notify the shareholders of the result and ensure the resolution is enacted
• If the resolution fails, inform the shareholders of the result and consider the feedback for future resolutions
• Document the outcome of the resolution for record keeping
• How you’ll know when you can check this off your list and move on to the next step: when the resolution is enacted, or all shareholders are informed of the result and feedback is gathered from the shareholders on the failed resolution.

Follow up with shareholders to ensure the resolution is followed through

• Make sure to provide regular updates to shareholders on the progress of the resolution
• Send a letter to each shareholder to confirm that the resolution was passed or failed
• Follow up with shareholders on the implementation of the resolution and answer any questions they may have
• Monitor to ensure that the resolution is carried out in a timely manner
• When the resolution is fully implemented, you can check this step off your list and move on to the next one.

Take any necessary steps to implement the resolution

• Create a plan of action outlining how the resolution will be implemented
• Contact the relevant stakeholders to ensure that the resolution is being followed through
• Monitor progress and review the resolution to ensure that it is being followed correctly
• Make adjustments to the plan of action as needed
• Keep track of any changes in the resolution and document them
• When all necessary steps have been taken to implement the resolution, it can be considered complete.

Conclusion

• Review the resolution and any supporting documentation to ensure accuracy
• File the resolution with the appropriate governing body
• Obtain any necessary confirmation of filing
• Maintain records of the resolution and filing

A summary of the points to remember when creating and submitting a resolution

• Gather the necessary information and documents
• Draft the resolution in accordance with applicable laws
• Ensure proper authorization of the resolution from the board of directors
• Review the resolution with all relevant parties
• Submit the resolution in accordance with the company’s bylaws
• Follow up on the resolution, including approval or denial by the shareholders
• When all steps are complete, the resolution is legally binding

Understand the legal framework

• Familiarize yourself with the laws and regulations that govern the formation of shareholder resolutions
• Understand the laws and regulations regarding the filing of resolutions and the type of resolutions that can be filed
• Review the corporate charter and articles of incorporation to ensure that the proposed resolution is in compliance
• Check the state statutes to ensure that the proposed resolution adheres to state laws
• Once you have a thorough understanding of the legal framework, you can confidently move on to the next step.

Draft a clear and concise resolution

• Outline the purpose of the resolution
• Identify the shareholders to whom the resolution will be addressed
• Describe the issue and the expected outcome in detail
• Review the resolution for accuracy and clarity
• Make sure the resolution is compliant with legal requirements
• Check that the resolution is written in formal language

Once the resolution is drafted, you can move on to the next step: Follow through with the voting process.

Follow through with the voting process

• Prepare for the vote by providing shareholders with the resolution on paper or electronically
• Ensure all shareholders are notified of the resolution before the vote
• Conduct a fair and impartial vote with all shareholders present or represented
• Count the votes and record the results
• Document the vote and the results in a written resolution
• You will know that you have completed this step when all votes are cast and the results are documented in a written resolution.

Take appropriate action after the vote

• Check the voting results to identify the resolution that passed.
• Ensure that all shareholders are aware of the resolution that was passed.
• Document the results and send a copy to the Corporate Secretary for record keeping.
• Contact the company’s lawyer and/or accountant to ensure that the resolution is enacted as soon as possible.
• Follow up with the company’s legal team to make sure that the resolution is successfully implemented and confirmed.

Once you have done all the above steps, you can check this off your list and move onto the next step: Prepare for potential challenges.

Prepare for potential challenges

• Review the laws in your state or jurisdiction related to shareholder resolutions
• Read up on case law related to shareholder resolutions
• Consult with an attorney familiar with shareholder resolution issues
• Determine if you need to take any action to protect the resolution from being overturned
• Consider if you need to update any internal processes related to shareholder resolutions
• Make sure you understand the potential risks to the resolution
• Make sure you have a plan in place to address any challenges that may arise

Once you have completed all of the above, you can consider this step complete and move on to the next step.

Identify potential issues that might arise

• Research the company’s current operations and management structure to identify any potential issues that could arise
• Ask questions and seek advice from trusted advisors to uncover any potential risks associated with the proposed resolutions
• Consult with the company’s legal team to ensure the resolutions are in compliance with all applicable laws and regulations
• Evaluate the impact of the proposed resolutions on the company’s mission, values, and objectives
• Analyze the potential implications for shareholders and other stakeholders
• Once you have identified and analyzed the potential issues, you can move on to the next step: monitoring progress.

Monitor progress

• Set up a tracking system for the resolution’s progress
• Monitor the resolution’s implementation on a regular basis
• Identify any changes that need to be made to the resolution
• Take note of any potential issues that may arise from the implementation of the resolution
• Make any necessary changes to the resolution to address any issues that arise
• When the resolution has been successfully implemented, mark this step as complete and move on to the next step

Review the resolution and its implementation regularly

• Establish a timeline for reviewing the resolution and its implementation
• Schedule regular meetings to review progress and make any necessary changes or adjustments
• Ensure the resolution and its implementation are compliant with all relevant laws, regulations, and standards
• Make changes or adjustments to the resolution or its implementation as needed
• Keep records of all changes and adjustments made
• When satisfied that the resolution and its implementation are satisfactory, move on to the next step.

Share results

• Send a report of the resolution’s outcomes to all shareholders
• Make sure to include a detailed explanation of the resolution and its implementation
• Distribute the report to all shareholders via email, mail, or other means
• Make sure to answer any questions or provide additional information to shareholders upon request
• Once all shareholders have been notified, you can check this step off your list and move on to the next step.

Communicate the resolution and its outcomes to shareholders

• Draft a letter to send to shareholders to explain the resolution and its outcomes
• Include a summary of what the resolution entails, such as the purpose of the resolution and any tangible benefits for shareholders
• Draft a press release or other communication materials to publicize the resolution
• Distribute the letter and other materials to shareholders, either by email or post
• Monitor the response from shareholders and answer any questions that arise
• Once the majority of shareholders have received the information and responded, you can complete this step and move on to the next step.

FAQ:

Q: What is a shareholder resolution?

Asked by Joe on October 24th, 2022.
A: A shareholder resolution is a formal document used to express the opinion of shareholders in a company. It is usually used to make major decisions or changes within the company and must be voted on by the shareholders. A shareholder resolution must be proposed and then voted on before it is officially adopted by the company.

Q: Who can create a shareholder resolution?

Asked by Samantha on December 11th, 2022.
A: Shareholder resolutions can be proposed by any shareholder in the company, although they must be approved by a majority vote of the shareholders. In some cases, directors of the company may also propose resolutions for consideration by the shareholders.

Q: What types of decisions can be made through a shareholder resolution?

Asked by Jake on August 16th, 2022.
A: Shareholder resolutions can cover a wide range of decisions, from changing the company’s name or issuing new shares, to setting new salary levels for executives or hiring new directors. In many cases, resolutions are used to make important strategic decisions about how the company will operate in the future.

Q: How does one go about creating a shareholder resolution?

Asked by Emma on July 14th, 2022.
A: Creating a shareholder resolution involves drafting a document outlining the proposed changes and presenting it to shareholders for consideration and voting. Generally, resolutions should include information such as the purpose of the resolution, details of any proposed changes, and a timeline for implementation. It is also important to ensure that all stakeholders have access to information about the proposed resolution and that all necessary legal requirements are met before it is voted on.

Q: Are there any specific rules that need to be followed when creating a shareholder resolution?

Asked by Ben on February 7th, 2022.
A: Many jurisdictions have specific laws which govern how shareholder resolutions are created and voted upon, so it is important to check local laws and regulations before drafting a resolution. Additionally, companies may have their own internal rules for creating resolutions which must also be adhered to when drafting one.

Q: Are there any differences between UK, US and EU laws regarding shareholder resolutions?

Asked by Elizabeth on April 4th, 2022.
A: Yes, there are some differences between UK, US and EU laws regarding shareholder resolutions which should be taken into account when creating one. For example, in some jurisdictions it is necessary to give shareholders advance notice of proposed resolutions while in others this is not required; certain types of decisions may require special majorities in some jurisdictions while not in others; and different jurisdictions have different rules regarding what constitutes sufficient information for shareholders to make an informed decision when voting on a resolution.

Q: What if I need help creating my shareholder resolution?

Asked by Logan on June 9th, 2022.
A: If you need help creating your shareholder resolution then you may want to consider consulting with an experienced legal advisor who can provide advice on how best to draft your document and ensure that all necessary legal requirements are met. Alternatively, there are online resources available which provide step-by-step guidance on how to create a shareholder resolution and other related documents such as proxy statements and articles of association.

Q: Is there any way I can streamline the process of creating my shareholder resolution?

Asked by Noah on January 25th, 2022.
A: Yes! There are several tools available which can help streamline the process of creating your shareholder resolution and other related documents such as online templates which can be used as starting points for drafting your document or software programs which automate certain aspects of the process such as calculating voting thresholds or tracking responses from stakeholders. Additionally, many businesses now offer services which provide end-to-end support for creating and managing your documents from start to finish.

Q: Do I need to create a separate shareholder resolution for each decision I want to make?

Asked by Ava on May 22nd, 2022.
A: Not necessarily - depending on what decisions you wish to make and whether they are related or not you may only need one shareholder resolution that covers multiple decisions at once or multiple distinct resolutions for separate topics. Generally speaking however it is best practice to create separate resolutions for each matter so that each vote taken is clear and unambiguous with regards to its outcome. Additionally it makes tracking progress much easier if different topics are grouped together in their own documents.

Example dispute

Lawsuits Referencing Shareholder Resolutions

• A plaintiff may raise a lawsuit referencing a shareholder resolution if the resolution was not implemented properly, or if it was breached or disregarded.
• For example, a shareholder resolution may stipulate that a company must use its profits to invest in research and development, but if the company does not follow through, a plaintiff may sue for damages.
• Plaintiffs may also sue for damages if the resolution was breached by company officers or directors, or if the company failed to disclose material information to the shareholders.
• The plaintiff must prove that the breach of the resolution caused harm and resulted in damages that can be measured.
• The court may award damages to the plaintiff in the form of compensatory damages, punitive damages, or an injunction.
• The court may also order the company to implement the shareholder resolution and take corrective action.

Templates available (free to use)

Secondary Offer Shareholder Resolutions Under Section 551
Shareholder Resolution Approve An Employee Share Scheme
Uncommercial Shareholder Resolution

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