Define: Resolutions

What Resolutions Means in a Contract

Resolutions, in the context of a commercial agreement, are the formally adopted decisions of a company's governing bodies, typically its board of directors or its shareholders, that authorize or approve a particular course of action. When a contract refers to resolutions, it usually means that certain corporate approvals must be obtained, in a specific pre-agreed form, before the transaction or an obligation under the agreement can proceed. This is common in share purchase agreements, investment documents, and reorganization arrangements, where the counterparties want certainty that internal corporate governance requirements have been satisfied.

The phrase resolutions in agreed form signals that the exact text of the resolution has already been negotiated and attached, often as a schedule or annex, so there is no ambiguity about what the company's board or members are being asked to approve. This removes the risk that a resolution passed on completion day differs materially from what the parties actually bargained for.

Contracts frequently distinguish between resolutions passed at a general meeting, which involve a physical or virtual gathering of members, and written resolutions, which allow decisions to be made without convening a meeting, subject to the law governing the contract and the company's constitutional documents.

How Resolutions Is Defined or Measured

A resolution's validity is generally measured by reference to the voting threshold it requires. Ordinary resolutions typically need a simple majority, while special resolutions, often used for more significant constitutional or structural changes, usually require a higher majority, such as seventy-five percent of those voting. The contract or its schedules will normally specify which type of resolution is required for each corporate action referenced.

Measurement also depends on procedural compliance, including proper notice periods, quorum requirements, and the correct recording of votes or written consents. A resolution that is substantively correct but procedurally defective may be challenged or deemed invalid, which is why many agreements require evidence, such as certified copies of minutes or signed written resolutions, to be delivered as conditions precedent or completion deliverables.

• Ordinary resolutions, generally passed by simple majority
• Special resolutions, generally requiring a higher majority threshold
• Written resolutions, executed without a formal meeting
• Resolutions in agreed form, with wording fixed in advance and attached to the contract

Where Resolutions Appears in Agreements

References to resolutions commonly appear in schedules to share purchase agreements, subscription agreements, and shareholder agreements, where the parties list the corporate approvals a target company must obtain before or at completion. They also feature in loan and financing documents, including instruments like a