Company Resolutions in Singapore: Types & How to Pass One?

Board Resolution
A board resolution is a type of formal document that identifies the various roles of the company’s offices. According to Section 157A of the Companies Act, the directors of the company make every decision related to the business of the company except for the ones in which the participation of the shareholders is also required.

Board resolutions are made in the following cases:

• When the company must vote for the new member on the board
• If the company wants to expand, hire new employees, or let go of many working employees
• For purchase of intellectual property rights
• During share sales
• During the passing of resolutions that will affect the business or members in some critical way

Aside from the above, a board resolution may be required to open a company’s bank account or to form an audit committee. Should a Singapore-based company plan to open a corporate bank account, a board resolution is required.

Ordinary Resolutions
Shareholders of the company pass ordinary resolutions. To conduct this meeting, 14 days’ prior notice must be given to all the members, and the resolutions are passed when 50% of the shareholder’s majority agrees to the formal decision. The meeting can also be held if the members of the limited companies who possess 95% of the voting rights agree to it.

An ordinary resolution is passed by way of a simple poll or raising of hands. In this vote, the majority includes the number of members voting, not the proxies or the members who abstain from voting.

Here are a few examples of when ordinary resolutions are important:

• To remove the director from office before the expiry of the director’s period of office
• To decide if a general meeting held is the Annual General Meeting (AGM)
• To appoint or re-appoint a director who is above the age of 70 years
• To declare dividends
• To employ and declare the remuneration of the auditors
• To elect new directors to replace retiring directors

Special Resolutions

Special resolutions are passed when there is a 75% majority in the votes cast in the meeting. Public companies need to provide written notice of 21 days (about 3 weeks) to their members regarding special resolutions and for private companies, written notice of 14 days (about 2 weeks) is required. The shareholders of the company pass special resolutions.

A special resolution safeguards the rights of minority shareholders against any critical decisions made without appropriate consideration. For the passing of a special resolution, a business can use a show of hands, a poll, or a written resolution. Although a 75% majority is required to decide, a higher proportion will be required for more important decisions.

Physical meetings: Businesses can pass a board resolution at a board meeting and a shareholders’ resolution at a shareholders’

In Writing: If a company is not able to hold a physical meeting, it may instead pass a written resolution. Section 184D of the Companies Act states that 5% of those who hold voting rights can demand a physical meeting.