Circular resolution: meaning, format and templates
Rezvan Golestaneh
Updated · Published · 17 min read
A circular resolution lets a company decide without getting everyone into one room. The text goes round to the people entitled to vote, they sign or reply, and the decision is made once enough of them have agreed.
A circular resolution (also resolution by circulation, written resolution or written consent) is a resolution passed in writing instead of at a meeting. The draft is sent to every director or shareholder entitled to vote, and it is passed when the required number agree by the deadline.
- Boards use it for decisions between board meetings: approving a contract, opening a bank account, authorising a signatory.
- Shareholders use it for decisions that would otherwise need a general meeting: approving the accounts, appointing a managing director, distributing profit.
- The rules depend on the country and the articles. Some decisions can never be taken by circulation, for example removing a director in the UK or approving the financial statements of an Indian company.
A circular resolution is as binding as a resolution passed at a meeting, provided the procedure in the law and the articles is followed.
- Circular resolution
- A resolution of a company’s board or shareholders that is adopted without a meeting, by circulating the proposed text to everyone entitled to vote and collecting their written or electronic agreement. In German it is an Umlaufbeschluss, in Indian company law a resolution by circulation, in the UK a written resolution and in the US action by written consent.
What a circular resolution is called, and where the rules are
The idea is the same everywhere. The name, the voting threshold and the list of excluded decisions are not.
| Jurisdiction | Name | Board | Shareholders |
|---|---|---|---|
| UK | Written resolution | Allowed if the articles say so (Model Articles: unanimous decision of the directors in writing) | Private companies only, Companies Act 2006, ss. 288 to 300. Not for removing a director (s. 168) or an auditor (s. 510) |
| US (Delaware) | Action by written consent, often unanimous written consent | Unanimous written consent of all directors, DGCL § 141(f), unless the charter or bylaws restrict it | Written consent of holders with the votes needed at a meeting, DGCL § 228, unless the certificate of incorporation prohibits it |
| India | Resolution by circulation | Companies Act 2013, s. 175: approved by a majority of the directors entitled to vote. Not for the matters in s. 179(3) | Shareholders decide at general meetings or by postal ballot, not by circulation |
| Germany | Umlaufbeschluss | GmbH managing directors: as the articles or rules of procedure allow. Supervisory board: § 108(4) AktG, unless a member objects | GmbH: § 48(2) GmbHG, every shareholder must agree in text form |
| Austria | Umlaufbeschluss | As the articles or rules of procedure allow | GmbH: § 34 GmbHG, every shareholder must agree to the written procedure |
Board resolution vs shareholder resolution by circulation
People often say “board resolution” for any written company decision. Legally, it matters who decides.
| Circular board resolution | Circular shareholder resolution | |
|---|---|---|
| Who votes | The directors (or managing directors) | The shareholders or members |
| Typical decisions | Approving contracts, authorising a signatory, opening bank accounts, appointing an additional director where the law allows | Approving the accounts, using the profit, appointing or removing managing directors, dissolving the company |
| Who signs | Each director | Each shareholder, or their authorised representative |
| Where the rules are | The articles or bylaws and the board provisions of the companies act | The articles and the shareholder provisions of the companies act |
| Fynk templates | Use the shareholder templates below as a starting point and change the voters | All twelve templates below |
The templates on this page are written as shareholder resolutions for a limited company (GmbH, Ltd). For a board decision, keep the structure, replace the shareholders with the directors and check the majority the board needs.
Rules for passing a circular resolution
Whatever the jurisdiction, five questions decide whether a circular resolution is valid.
1. Does the procedure itself need everyone’s consent? In a German GmbH, yes: every shareholder, including those without voting rights, must agree in text form either to the decision or to voting in writing (§ 48(2) GmbHG). Text form means an email is enough. If one shareholder refuses the procedure, the decision has to go to a meeting, even if a majority would vote yes. Austria has the same rule in § 34 GmbHG. In the UK and India the procedure is available without separate consent, and in the US the board needs every director to sign.
2. What majority is needed?
- UK: an ordinary written resolution needs a simple majority of the total voting rights of eligible members, a special written resolution 75% (ss. 282 and 283). Members who do not reply count as votes against.
- US: the board needs unanimity. Stockholders need the votes that would pass the action at a meeting where every share was present.
- India: a majority of the directors entitled to vote. If at least one third of the directors ask for a meeting, the chair has to put the matter to a board meeting instead (s. 175).
- Germany: the same majority as at a meeting, usually a majority of the votes cast (§ 47(1) GmbHG), unless the articles or the law require more.
- Austria: the majority is calculated on the votes of all shareholders, not just those who replied (§ 34(2) GmbHG).
3. Is the decision excluded from written resolutions?
- UK: removing a director under s. 168 and removing an auditor under s. 510 need a meeting.
- India: s. 179(3) matters must be decided at a board meeting, including making calls on shares, buy-backs, issuing securities, borrowing, approving the financial statements and the board’s report, and approving a merger or takeover.
- Germany: decisions that need notarial recording, such as amending the articles of a GmbH (§ 53 GmbHG, three quarters of the votes cast), are in practice passed in front of a notary, not by circulation.
- Everywhere: the articles can exclude more.
4. What is the deadline? In the UK, a written resolution lapses 28 days after circulation unless the articles set another period (s. 297). Elsewhere there is no statutory deadline, so set one in the resolution. A week is common. Without one, an unsigned resolution can hang open indefinitely.
5. How is it recorded? Keep the signed resolution with the minutes. In India, a resolution passed by circulation has to be noted at the next board meeting and recorded in its minutes (s. 175(2)). In the UK, companies must keep copies of written resolutions for at least ten years (s. 355).
Circular resolution format
A circular resolution is usually one or two pages. Use this format for a board or shareholder resolution and adapt the wording to your articles.
| Part | What it contains | Example |
|---|---|---|
| Heading | Company name, registered number and address, who resolves, the words “by circulation” | “Circular resolution of the shareholders of Example GmbH, HRB 12345” |
| Legal basis | The law and the article of the articles that allow the procedure | “Pursuant to Article 9 of the Articles of Association and § 48(2) GmbHG” |
| Consent to the procedure | Where needed: everyone agrees to deciding without a meeting | “All shareholders agree to adopting the following resolution in writing.” |
| Resolution text | One clear decision per item, starting “It is resolved that” | “It is resolved that the purchase of 100 office chairs from Supplier XYZ for EUR 5,000 is approved.” |
| Authorisation | Who carries the decision out and signs | “Jane Doe, managing director, is authorised to sign the purchase agreement.” |
| Voting options | Yes / No / Abstain for each voter | A table with one row per director or shareholder |
| Deadline | The date by which votes must be returned | “Votes must be received by 15 November 2026.” |
| Signatures | Name, capacity, shareholding (for shareholders), signature, date | One block per voter |
Write the resolution so it can be answered with yes or no:
- Good: “It is resolved that the purchase of 100 office chairs from Supplier XYZ for a total of EUR 5,000 is approved. Jane Doe, managing director, is authorised to sign the purchase agreement on behalf of Example GmbH.”
- Bad: “It is resolved that the necessary office purchases are approved and management is authorised to proceed.”
The bad version does not say what is bought, from whom, for how much or who signs. A shareholder cannot vote on it with confidence, and the company cannot prove later what was approved.
You can put several decisions into one circular resolution if they are related (for example approving the accounts and using the profit) and each is a separate, numbered item with its own vote.
How to pass a circular resolution, step by step
- Check the articles. Confirm written resolutions are allowed for this body and this decision, and what majority applies.
- Draft the resolution using the format above or one of the templates below. Attach the documents the voters need, such as the contract or the accounts.
- Set the deadline in the resolution itself.
- Circulate it to everyone entitled to vote, at the same time. Sending it round one person after another is slower and makes it harder to prove who saw which version. In India, the draft must go to all directors at their registered addresses, by hand, post, courier or electronic means.
- Collect votes and signatures. If the text changes after it has gone out, send the new version to everyone again. Earlier signatures do not carry over to a different text.
- Announce the result to all voters and file the signed resolution with the minutes.
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Free circular resolution templates
Each template is a shareholder resolution with voting options, a deadline and signature blocks. All of them can be adapted for a board decision.
| Template | Use it to |
|---|---|
| Annual financial statements | Approve the year’s accounts and decide on the use of the result in one resolution |
| Use of annual surplus | Decide how much profit is distributed and how much is retained |
| Appointment or dismissal of managing directors | Appoint or remove a managing director of a GmbH or Ltd |
| Appointment or dismissal of board members | Appoint or remove a board member, where the shareholders hold that power |
| Conclusion of a contract | Approve a contract that needs shareholder consent, with value, term and partner |
| Loan agreement | Approve the company taking out a loan |
| Acquisition of assets | Approve buying significant assets |
| Disposal of assets | Approve selling significant assets |
| Dissolution of a Ltd | Resolve to dissolve and wind up the company |
| Appointment of liquidators | Appoint the people who run the liquidation |
| Denial of information or inspection rights | Refuse a shareholder’s request for information when it would harm the company |
| Remedy of deficiencies in the company purpose | Fix a defective statement of the company’s purpose (unanimous in a German GmbH, § 76 GmbHG) |
Approval of the annual financial statements
Use of the annual surplus
Appointment or dismissal of managing directors
Appointment or dismissal of board members
Conclusion of a contract
Borrowing funds (loan agreement)
Acquisition of assets
Disposal of assets
Dissolution of a Ltd
Appointment of liquidators
Denial of information or inspection rights
Remedy of deficiencies in the company purpose
Circular resolutions with electronic signatures
Most laws accept electronic agreement to a circular resolution. In Germany and Austria the consent to the procedure only needs text form, so an email or an electronic signature is enough. A UK written resolution can be agreed by sending an authenticated document in electronic form (s. 296). In India the draft can be circulated electronically. Check whether the articles ask for more, and use a qualified electronic signature where a decision must be in written form.
Collecting replies by email works for two shareholders. With more, it gets hard to tell who has voted on which version. In fynk, shareholder resolution voting puts the vote and the signature in the same document: each shareholder votes and signs online, you see who is still missing, reminders go out before the deadline, and the signed resolution is stored with its audit trail. Start from the templates above or your own.
FAQ
A circular resolution is a decision of a company's board or shareholders that is taken in writing instead of at a meeting. The text is circulated to everyone entitled to vote and is passed when the required number agree by the deadline. It is also called a resolution by circulation, a written resolution or action by written consent.
Yes. A circular resolution has the same effect as a resolution passed at a meeting, as long as the law and the company's articles allow the procedure for that decision and the required majority agrees within the deadline.
A board resolution is any decision of the board of directors, whether taken at a meeting or in writing. A circular resolution describes how a decision is taken: in writing, without a meeting. A board resolution passed in writing is a circular board resolution. Shareholders can pass circular resolutions too.
It depends on the jurisdiction. In the UK and Austria the majority is counted against all eligible votes, so a missing reply works like a no. In a German GmbH, a shareholder who does not agree to the written procedure blocks it, and the decision must go to a meeting. US boards need every director's signature.
In the UK, removing a director or an auditor needs a meeting. In India, the matters listed in section 179(3) of the Companies Act 2013, such as approving the financial statements, borrowing and issuing securities, must be decided at a board meeting. In Germany, decisions that need notarial recording, such as changing the articles, are passed in front of a notary. The articles can exclude further decisions.
Not by editing the signed copies. If the text changes, circulate the new version to everyone entitled to vote and collect all votes again. Signatures on the old text do not count for the new one.
In the UK, a written resolution that has not been passed within 28 days of circulation lapses, unless the articles set a different period. Elsewhere, the deadline stated in the resolution applies. If it passes without the required majority, the resolution fails and has to be proposed again.
Yes, in most cases. German and Austrian law only require text form for agreeing to the written procedure, UK law accepts authenticated electronic documents, and Indian law allows electronic circulation. Use a qualified electronic signature where the articles or the law require written form.
Please keep in mind that none of the content on our blog should be considered legal advice. We understand the complexities and nuances of legal matters, and as much as we strive to ensure our information is accurate and useful, it cannot replace the personalized advice of a qualified legal professional.
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