Director and Shareholder Resolutions

Resolutions for Ontario Companies – Directors Resolutions | Shareholders Resolutions



What is a Resolution

A resolution is a form of approval.  It can be to approve any matter that the corporation wishes. Some examples are approval of the change of registered office address of a company, approval to amend the articles of a company, approval to enact by-laws of a company, etc.


Resolutions are Approved by Directors or Shareholders

In some cases, certain matters must be approved by the directors and in other cases it may be that shareholder approval is required.  For instance if the company wishes to change its name from one alpha name to another alpha name the shareholders must approve this change before it can be implemented.  If a company wishes to enter into an agreement, the directors would approve the matter.  In some cases, both directors and shareholders may need to approve a resolution.


How Are Directors Resolutions and Shareholders Resolutions Approved

Resolutions can be approved at meetings of the directors or shareholders, pursuant to which every director/shareholder has been given notice of the meeting, and for which at least a quorum of those directors/shareholders showed up for the meeting. (i.e. the minimum number of directors/shareholders that can form a quorum is outlined in the company’s by-law and frequently is a majority).

Resolutions can also be approved without holding a meeting as long as all of the directors or shareholders, as the case may be, sign and approve a written resolution.


What Types of Resolutions are There

There are three types of resolutions:

Directors Resolution – This is a resolution that is either (a) passed by a quorum of directors at a meeting held to approve it, or (b) a resolution in writing signed by all of the directors.

Shareholders Resolution – This is a resolution that is either (a) passed by a quorum of shareholders at a meeting held to approve it, or (b) a resolution in writing signed by all of the shareholders entitled to vote.

Special Resolution – A special resolution means a resolution that is (a) submitted to a special meeting of the shareholders of a company duly called for the purpose of considering the resolution and passed by at least 2/3rds of the votes cast at the meeting, or (b) consented to in writing by each shareholder of the company entitled to vote.

What Does a Resolution Look Like

We have included an example of a resolution on this page.  There is always a heading on the resolution and a footer which shows the signatures.

The Heading should say either (a) Resolution of the Directors, or (b) Resolution of the Shareholders, or (c) Special Resolution as the case may be.

The footer should reference that all of the directors or shareholders are signing and the name of the statute that they are relying upon.


How do You Know Whether the Directors or Shareholders Must Approve a Particular Matter

The Ontario Business Corporations Act is online and can be searched to find out what type of approval you need for a matter.  For instance, let us say that you are changing the directors of a company by increasing the number.  If you search “number of directors” you will find section 125(3) which indicates that the number of directors is determined by special resolution.

director resolution